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E-Business and its Impact on Human Capital

The advances in the Internet technology and its penetration into millions of house holds across the world have created an opportunity to transact business over the web. Not only can the consumer log on to a dealer/seller website and buy a product online (B2C), businesses amongst themselves can also communicate over the web (B2B). A typical example of B2C would be a consumer buying books off, while an example for B2B would be an airline company linking its ticket payment module to the bank’s website – the two businesses airline and banks are connected via the web. Such is the web technology as we see today, the potential of which is difficult to imagine at this point in time. This technology called e-business creates a new playing field – where the investment to start one is not capital intensive. eBay is an example of a company that started as a low key business but now has revenues exceeding $5.9B. Unquestionably, this brings about new challenges in the skill and human capital required. This article investigates this specific aspect of e-Business.

Lesser need for a face-to-face selling

e-Business introduces a reduced need for a face-to-face selling of certain commodities. For instance, to buy printing stationery, the consumer need not leave his home; he can simply do that over the internet. Without any human interaction, he gets the stationery delivered to his home. Similarly, the concept of a travelling salesman selling items door-to-door is significantly reduced. Thanks to e-Business, marketers can analyze the market and target the specific segment of customers that would be interested in their product or service. This reduces enormous amount of wasted time in travelling and of course, expenses. While some skills might become redundant, e-business does not result in reducing the number of jobs. Au contraire, it creates more jobs. However, the salesman in the printing stationery shop or the travelling salesman would need to metamorphose into a telemarketer, in addition to creating more jobs in logistics management, and order processing.

Impact on Human Capital

The impact of e-business on human capital can be summarized as on the following fronts:
a) Redundancy of certain skills, requiring retraining
b) New skills
c) Better data organization and management skills
d) Flawless operational abilities
e) Peripheral jobs created around the e-business system

Redundancies in skills create a necessity for retraining the employees. The mechanization in engineering introduced a need for computer education for its shop floor employees. Similar to this example, the human capital hitherto employed require retraining. In addition the companies would need to acquire human capital with specific skills (e.g. software integration, maintenance skills)

e-Business often takes the business physically away from the customer. This requires the business entity to gather consumer intelligence and newer and more efficient ways of data organization and management skills. In the recent past, many companies such as Google and Akamai have started providing consumer analytics services. Companies need to have people on board who understand the data organization and management possible with modern technologies, thus, demanding an augmentation of existing human capital.

So that the consumer experience is more enriching, it is extremely important to have flawless operational ability. Amazon takes pride in achieving flawless back-end operations, thus achieving consumer delight and repeat business. To enable such flawless operations, it is essential to have the right human capital.

Additional to all of the above, various peripheral jobs get created around e-business companies. For instance, the boom of call-center companies in Bangalore triggered a huge demand for cab drivers. These drivers were often required to speak two languages in addition to their mother tongue, and be literate in using mobile phones.

e-Business has a telling impact on human capital of an organization. Some would need retraining, some acquisition of new skills. The more companies are aware and able to adapt, the easier it would be for them to be successful.

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