1. Introduction

The Internet and the World Wide Web have changed our lives in many ways, making it possible to carry out a virtually unlimited number of activities from our home or office. For example, we can find information on camera features and prices before we actually buy a camera. We can communicate with our friends, relatives or other colleagues via e-mail on a virtually instantaneous basis, join a chat group discussing a current social issue such as horrible terrorists’ attacks on America and America’s possible response to the attacks. We can listen to remote radio or television stations live, meet colleagues with teleconferencing systems equipment, and buy some products and have them delivered directly home without going to the mall. Surely, we can think of many more ways to use the Internet and the World Wide Web.

It was estimated that 144 million people were using the Internet around the world by the end of 1998. The number has been growing very fast and is expected to increase to approximately 502 million by the end of 2003 and 1 billion worldwide by the end of 2005. Business has been concurrently changing as more and more people go on-line to purchase goods and services available on the Internet. Statistical research shows that the number of Web sites has been growing at a rapid rate with over 23.78 million by the end of 2000, up from only 4.06 million by the end of 1999 [17]. Electronic commerce has also been growing at a rapid rate in both B2B and B2C.

Citizens themselves, based on the lessons they have learned and the skills they have developed through interactions with services offered in other regular business areas, such as on-line financial services and information search services are driving governments to increase focus on customer service. These experiences are accelerating the demands and expectations that citizens place on public sector agencies. As customers, they are receiving one-stop shopping and service-in-an-instant; as taxpayers, they are demanding similar access and speed of service from their government. Clearly, the demand is there—citizens not only want information, they want higher-quality service, convenience, customization, and empowerment [2]. According to a recent survey, citizens wanted to renew driver’s licenses (47 percent), file state taxes (34 percent), obtain park information (31 percent), review accident reports (29 percent), pay parking tickets (28 percent) and review real estate records (28 percent). Businesses wanted to be able to search federal or municipal court records (47 percent), obtain or renew a professional license (43 percent), access one-stop shopping for opening a new business (39 percent), access criminal background record checks (34 percent), and apply for a business permit (36 percent) [3].

While observing the effectiveness and efficiency the Internet made possible, governments have also been trying to incorporate information technologies into the way they do business [24]. As stated above, the World Wide Web has become an increasingly important way for citizens and businesses to communicate. It is being used to disseminate information and services and to transact business. It promises to provide “24 hours a day, 7 days a week” access to government information and services. As a universal interface to information and services, the Internet offers many potential benefits to both users and providers of information services. It presents a unified and user-friendly gateway to a myriad of resources. It can reduce the learning curve and training costs, help government reach an expanded audience, give citizens anytime, anywhere convenient access to government information and services increasing citizens’ satisfaction and building up confidence between governments and citizens, and allow government to integrate information and services that originate at different agencies and on different platforms. However, while regular businesses have made great strides in going on-line, governments have been less progressive even though activities have been significant in exploring the potentials [12].

The objective of this paper is to compare process, components, functions, and practices of e-commerce with those of e-government and then to find some implications and recommendations for improved government services and businesses. An important assumption is that most e-commerce practices and functions can be effectively applied to the area of government services and businesses. Therefore, the research questions to be answered in this paper are the followings: What kinds of regular businesses and services are currently on the Internet? What kinds of government businesses and services are currently on the Internet? What are similarities and differences between regular on-line businesses and services and government businesses and services? How can government on-line businesses and services be improved from the perspective of citizens? What are driving forces, barriers and future implications of electronic government?

The first thing to be done is to identify and demonstrate regular Internet businesses and services and government Internet businesses and services currently on the Web. Then, similarities and differences between the two will be explored. Some implications and recommendations will be suggested based on the comparison of the two, on-line regular business services and on-line government business services. Finally driving forces, barriers and future implications or paths of electronic government will be stated.

Primary works with this paper will be research on the existing articles and documents related with e-commerce, existing government services. The government level covered in the paper would be primarily state and local government agencies because they are nearest to citizens and businesses and because they must directly or indirectly contact citizens and businesses to do their business. However, the government level is not strictly applied through the sections where deal with some general concepts and practices. In addition, geographical area is not restricted to the United States through the sections even though e-government services cited here are based primarily on current practices of the United States’ state and local governments.

2. Electronic Commerce: An Overview

Even though e-commerce has existed for over thirty years, it has just recently sustained significant growth. In the past 5 years, the Internet has transformed from an auxiliary communication medium for academics and large organizations into an entrenched communication medium that spans across nearly all parts of mainstream society. E-commerce growth is tied directly to these socio-technological changes. The more entrenched the medium become, the more users are drawn to it. An increase in users increases markets. As markets expand, more businesses are attracted, which in turn drives the development of better, more stable and secure technology to facilitate e-commerce. A stable, secure environment for exchanging mission-critical and monetary information only draws more businesses and consumers to the Internet and ensures the growth pattern continues. All these related factors contribute to a burgeoning e-commerce marketplace that should continue to grow well into the new millennium.

2.1. Definition

There does not exist a simple definition of e-commerce that adequately describes the coverage of their operations, functions and underlying technologies. One common view is that e-commerce is on-line shopping via the Internet. Although this is correct, on-line shopping is only one of many types of e-commerce activities. In broader terms, e-commerce is any commercial activity conducted electronically, particularly via private or open networks, such as the Internet. The key point of this definition is that e-commerce is a confluence of business operations with electronic and network technologies. Telephony and non-networked technologies such as CD-ROM media may integrate into operations, but the core of e-commerce is network technologies and especially open networks such as the Internet.

2.2. Process

The e-commerce process can be described as one of the components of e-commerce and it includes marketing, sales, payments, fulfillments, and support in the most simplified approach. However, other elements could be added to complement the process of e-commerce. They are creation of the on-line content and host of the content on the Internet. Therefore, an entire process can be understood as shown in the figure 1. In most e-commerce web sites, those processes are usually described in a way customers or general users can easily understand. This user-friendly description makes users feel comfortable when they do transactions in those e-commerce web sites. They notify the transaction information on a real time basis to their customers and try to get feedback from them to make their features more clear.

2.3. Components

Description of components of e-commerce depends on various viewpoints and scope. For example, in a technical term, e-commerce components can be understood to include portals, web browsers, plug-ins, HTML, JavaScript, XML, search engines. In a broader meaning, however, e-commerce can be said to have three major components: Institution that is external or surrounding elements, Networks that cover physical line and technological elements as well, and process that is internal handling of business. Each component is composed of various sub-components and those sub-components again include many elements, technological or non-technological. A simplified description of e-commerce components can be drawn as shown in the figure 2.

2.5. Functions

In short, e-commerce offers a more efficient and effective way their customers reach their services. E-commerce helps expand markets beyond geographical, national boundaries, expand reach to new clients, realize economies of scale by increasing sales volume to new markets, and streamline communication to suppliers and clients resulting in improved services to existing and new customers. It is making it possible to reduce paperwork and time spent on correspondence, track customer satisfaction, expedite billing, improve collaboration on work projects. Also, it would improve inventory control and order processing, lower costs of overhead, and make it easier to monitor competition and industry trends.

In the short-term, entry into e-commerce may offer a competitive advantage over slower to act competitors. The market for e-commerce is growing, as more consumers and businesses gain Internet access and transaction processing technologies improve security. The functions of e-commerce to regular businesses may include capabilities to:

- Expand markets beyond geographical, national boundaries & expand reach to new clients - Realize economies of scale by increasing sales volume to new markets - Streamline communication to suppliers and clients

- Improve service to existing clients
- Reduce paperwork and time spent on correspondence
- Track customer satisfaction
- Expedite billing
- Improve collaboration on work projects
- Leverage legacy data
- Improve inventory control and order processing & lower costs of overhead - Monitor competition and industry trends
- Improve or expand product lines - locate new suppliers, products that could be included in catalogue.

E-commerce conducted over the Internet differs from typical commercial activity in that it is influenced by the unique characteristics of the medium itself. In contrast to print media, e-commerce is dynamic, allowing users to interact with the commercial site, send comments, and even define the scope of a document. Unlike person-to-person commerce, e-commerce allows for a controlled interaction between vendor and potential purchaser, where the vendor may strategically direct the customer through a series of options and processes. E-commerce also differs from traditional commerce by its boundless relation to time and space. Interaction is not restricted to normal working hours or geopolitical borders. There is potential to conduct business with other merchants and consumers around the world in different time zones, 7 days a week, 24 hours a day.

3.3. Practices

By virtue of its similarities, the scope of operations for e-commerce is nearly as broad as traditional commerce. E-commerce includes both traditional activities (e.g. providing product information) and new activities (e.g. conducting on-line retail in virtual malls, publishing digital information). Some of the common operations that define e-comm...

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