Why are E-business and outsourcing referred to as the emerging modes of business?

E-business and outsourcing are referred to as emerging modes of business. Prefix ‘emerging’ puts emphasis on the fact that these businesses are in the process of development. These changes are happening here and now, and, that these changes are likely to continue. In fact, three changes are taking place most strongly: 

• Digitizaton: The conversion of text, sound, images, video and other content into a series of ones and zeroes that can be transmitted electronically. 
• Outsourcing: Contracting out non core activities to outside firms.
• Internationalisation and globalisation: More and more foreign companies are entering into India and sending Ashia and Indian companies becoming MNCs. Therefore, Ebusiness and outsourcing referred to as the emerging modes of business.

Following factors are responsible for the growing importance of these trends:

• Improvement in Information Technology: With the improvement in information technology and emergence of internet the process of outsourcing and e-business is on an expansionary path. 
• More and More Interactive Websites: Websites are becoming more and more interactive. It is removing the problem of ‘low touch’. 
• Improvement in Communication Technology: Communication technology is continually evolving and increasing the speed and quality of communication through internet. 
• Diffusion of E-Commerce in all nooks and corners of the country: In order to diffuse ecommerce in all nooks and corners, India has undertaken about 150 such projects. It is also growing importance of these trends. 
• Global Competitive Pressures for higher quality products: Due to adoption of new economic policy of 1991 in India, there has been an increase in competitive pressure from giant sized MNCs and global enterprises. 
• Ever Demanding Consumers: There is increasing demands from consumers for high quality products at minimum cost. Therefore, e-business and outsourcing are being chosen as newer options. But e-business and outsourcing are not emerging out of compulsion but also out of choice because of its benefits to consumers as well as producers.

During the last decade or so the way of doing business has undergone fundamental changes. The manner of conducting business is referred to as the ‘mode of business’, e-business and outsourcing are referred to as ‘emerging modes of business’ as these have brought about new changes in the way or manner in which business is conducted and it is believed that these trends are likely to continue, e-business may be defined as the conduct of industry, trade and commerce using the computer networks, e-business covers a firm’s interactions with its customers and suppliers over the internet and also other electronically conducted business functions such as production, inventory management, product development, accounting and finance and human resource management.

Outsourcing represents a new mode of business as it is a departure from the traditional thinking of self-sufficiency in business. It refers to a long-term contracting out of business activities to captive or third party specialists with a view to benefitting from their experience, expertise, efficiency and, even investment. Generally the non-core business activities are outsourced but of late even some of the core activities are being outsourced. Outsourcing comprises four key segments: contract manufacturing, contract research, contract sales and informatics.

The various factors responsible for the growing importance of these trends are:

1. Business managers and thinkers keep evolving newer and better ways of doing things in an effort to improve the business processes. 

2. Business firms have to strengthen their capabilities of creating utilities and delivering value successfully to meet the competitive pressures. 

3. Consumers have become far more demanding than ever in terms of higher quality, lower prices, speedier deliveries and better customer care. 

4. Business as an activity has to keep evolving by adopting new trends in order to ‘ benefit from emerging technologies.