Information Services And Electronic Commerce - Industry Overview

Business America, Jan, 1998 by Jennifer Tallarico

Information services consist of data processing and network services, professional computer services, and electronic information services companies. Many information service companies are the providers of electronic commerce applications and services. Electronic commerce services are used by virtually every sector of the economy -- manufacturing, transportation, finance, retail and wholesale trade, government, other service sectors, and by the individual consumer or user.

Businesses, governments, and residential homes are increasingly wired, networked, and have access to the Internet. They are creating new efficiencies through their increased access to global information, the speed with which data and information can be transmitted, and their enhanced capacity for collaborative work efforts. Further, businesses are not only becoming networked internally, they are networking and providing access to their suppliers, vendors, and consumers both directly and indirectly.

Many industry observers see electronic commerce as one of the most important techniques and operational models affecting future business practices. Yet there is no consensus on exactly what electronic commerce comprises. A variety of electronic commerce applications, services, and development tools have existed for many years, albeit in closed, well defined networks. For many years, various types of electronic services have been provided to businesses and governments, although in relatively closed networks by information service companies. With the growth of the Internet, information service companies, along with the businesses providing the telecommunications and technology infrastructure, are well-positioned to advance the expansion of electronic commerce nationally and internationally.

Network service companies provide a broad range of value-added network services, including electronic data interchange (EDI) services, electronic mail delivery, file transfer, and electronic funds transfer. EDI has traditionally been a cornerstone of electronic commerce among businesses and governments for many years. Network services firms also provide access to databases and electronic bulletin boards. In the past many of these services and applications have taken place over private networks which make use of private and leased public telecommunications lines designed to be secure. Network service firms are increasingly looking to the Internet for new business opportunities and are providing more sophisticated forms of electronic commerce, including services which facilitate sales and customized research over the Internet.

The growth of the Internet as a means of electronic communication in residential markets will have a positive benefit for certain network service companies which provide certain forms of electronic commerce services. Growth of traditional network services will continue to increase as a result of new applications and tools designed for the Internet and intranets. The Internet is also likely to spur the development of new forms of network services.

Data processing companies provide services such as data entry, transaction processing, credit card authorization and billing, invoicing and payroll processing, and other business functions. In many ways, businesses which provide the aforementioned data processing services are providing key forms of business-to-business electronic commerce. While companies offering data processing services generally operate over closed networks, they are concerned with and have had to grapple with many of the same issues affecting electronic commerce over the Internet.

Electronic information services include companies that provide proprietary data bases and information online, via CD-ROM, or through other multimedia. Examples of the information they provide include financial and economic information for business users, marketing information on specific industries and products, information specific to geographic area, news and media information, and other business information. Many traditional electronic information services provide information and data electronically, but also offer the subscriber the capability to purchase additional information or data electronically over their networks.

An increasingly important component of electronic information services are consumer online services. These services give their subscribers access to a wide array of information, data, entertainment, and more which is packaged for ease of use. A key electronic commerce service offered by consumer online service providers is the ability to shop on the Internet. Further, advertisements and home shopping capabilities of different products and services are provided by consumer online service companies. The information topics they offer may include entertainment, education, personal finance, as well as electronic versions of magazines and newspapers, and information on local events. Consumer online services now offer access to the Internet, the World Wide Web, and global e-mail. There are a number of issues of concern to consumer online service providers, namely privacy, liability, content restrictions, security, intellectual property protection, consumer protection, electronic authentication, and electronic payment mechanisms. Other issues also affect the consumer online service providers, including access to global telecommunications networks and the myriad of issues affecting access.