Q.Why are e-business and outsourcing referred to as the emerging modes of business? Discuss the factors responsible for the growing importance of these trends.

• Why 'emerging modes': e-business and outsourcing are not a new kind of business but new ways of doing business. 'Emerging' signals that these changes are happening now and are likely to continue.
• Factors — internal: the firm's own quest to improve business processes (purchase, production, marketing, finance, HR) and create utilities/value more efficiently.
• Factors — external: rising competitive pressure and increasingly demanding customers who want better quality, lower prices, faster delivery and better care; and the desire to gain from emerging technologies (digitisation, computer networks, the internet).

Why they are called 'emerging modes of business':

• The manner in which business is conducted is called the mode of business, and the word 'emerging' signals that these changes are happening right now and are likely to continue.
• Importantly, these newer modes are not a new kind of business — they are new ways of doing business. The underlying aim is the same as always: creating utilities or value in the form of goods and services. What has changed is how that value is created and delivered.
• Of the strongest trends reshaping business, two stand out and are the focus here: the digitisation of business (e-business) — conducting industry, trade and commerce over computer networks — and outsourcing, getting work done through outside agencies rather than doing everything in-house. Because both of these are recent and continue to evolve, they are aptly termed the emerging modes of business.

Factors responsible for their growing importance:

The trigger comes from both internal and external forces.

• Internal forces — the quest for improvement and efficiency: Business aims at creating utilities or value that households and industrial buyers purchase to meet their needs and wants. In their effort to improve business processes — purchase and production, marketing, finance, human resources — managers and business thinkers keep evolving newer and better ways of working. Firms must continually strengthen their ability to create utilities and deliver value, and e-business and outsourcing let them do this more efficiently and at lower cost.
• External forces — competition and demanding customers: Firms must survive competitive pressure and satisfy consumers who increasingly demand better quality, lower prices, speedier deliveries and better customer care. e-Business (serving customers anything, anywhere, anytime) and outsourcing (contracting out work to those who can do it better or cheaper) directly answer these demands.
• The pull of new technology: The desire to gain from emerging technologies — digitisation, computer networks and the internet — means that business keeps evolving. The internet dismantles the constraints of time and space, while outsourcing lets a firm focus on its core strengths and hand the rest to specialists.
• India's advantage in outsourcing: India in particular has ridden high on the global outsourcing wave, gaining in employment generation, capability building, exports and GDP, which has reinforced the importance of this mode.