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Electronic Transactions    

Electronic transactions can be subdivided into several steps (each of which initiates a process). There are pre-sale (or -purchase) phases, sale and after sale phases (see Verhoest/Leyten/Whalley 1999). Typically a transaction starts with information gathering, price and quality comparisons as well as pre-sale negotiations. During the sale phase contracting and delivery are the core processes, payment is the final stage of this phase. After-purchase transaction stages comprise customer service (e.g., online help desks for technical advice and user instructions), the administration of credit payments and the handling of returns as well as marketing activities preparing the next purchase (see table).

Table: Components of electronic transactions

pre-purchase phase purchase phase after-purchase phase
  • information gathering
  • comparisons
  • negotiation
  • ordering
  • contracting
  • delivery
  • payment
  • customer service
  • guarantee management
  • credit administration
  • returns
  • marketing activities

This list of transaction components is already quite aggregated. More steps could be distinguished (see also Mesenbourg 2001). For example, the ordering procedure could be divided in 'request', 'check of availability', 'order placement'. Or delivery can be split into procuring, packing, and sending. However, any further detail in the analysis of electronic transactions will require industry-specific categorisations. For example, delivery in service industries differs from that in manufacturing: returns do not play a significant role in certain service industries, but the specification of the service delivered might require a further differentiation of the 'negotiation' steps. Therefore, a more general categorisation should be adopted to define and characterise the phenomenon for the project as a whole.

Each step in a transaction can either be pursued electronically (online) or non-electronically (offline), and all combinations of electronic and non-electronic realisation are possible. It is therefore difficult to decide which components actually have to be conducted online in order to call a transaction 'electronic'. Is it enough, if the customer browses the internet to get price information and then goes to his local supplier to buy a good or service, to call this an electronic transaction? Is electronic ordering a necessary prerequisite or does telephone ordering do? If it were required that all steps listed in the table above were conducted electronically, a very small volume of e-business transactions would result. Therefore a meaningful compromise has to be found. The impact of e-business on companies, markets and the economy varies substantially with the share of online activity in transactions.

As a pragmatic solution we might, for the purposes of this project, assume that transactions are called 'electronic', and thus fall into the categories e-business or e-commerce, if at least one step in each phase is pursued electronically. This means, for example, that the often occurring practice of ordering online and collecting the purchased items in a local store, will only be considered an electronic transaction, if the customer is registered in an electronic data base and contacted later to induce further sales. As an alternative that would allow to include a wider range of activities, one might extend electronic transactions to cases, in which at least one of the steps in the pre-purchase and the purchase phases are pursued electronically. One might also select 'important' steps in each phase as a prerequisite for the nomination as 'electronic', for example 'ordering', 'contracting' and 'payment'. Further discussion might be needed regarding this point.

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