E-business, not e-commerce - Internet/Web/Online Service Information

Communications News, Feb, 2001 by Ken Anderberg

When you are a high-flying media darling and your wings get clipped, the media attention is likely to be just as intense as when you were soaring. That would seem the best way to explain the Chicken Little media coverage of the "Fall of the Dot-coms" in 2000. After all, the business world is not coming to an end simply because a hundred or so dot-coms bit the dust last year, especially when you consider there are nearly 5,000 venture capital-backed Internet startups in the U.S.

The story much of the media missed last year and is just now beginning to grasp is the potential the Internet offers the nation's seven million brick-and-mortar companies. The growth in this enterprise market will be the IT story of 2001 and for a few years forward--and middle market companies will provide the major market push. The pendulum will swing this year from e-commerce to e-business, where back-end business processes take up front-end residence on the Internet.

Large companies implementing Internet technologies already are realizing improvements of 13% to 21% in financial performance measures, according to a study by the Center for Research in Electronic Commerce. Small companies, says the center, can achieve even greater benefits, reaching new markets more effectively, increasing market share and improving visibility. Small businesses with less than $10 million in annual revenues, the study claims, can improve financial performance by as much as 50%.

While e-business applications include e-commerce functions, they go far beyond selling on the Web. For example:

* American Airlines spends less than 10 cents to create an e-ticket, vs. $12 for a paper one.

* Bechtel saves about 40% on Web procurement of supplies, and expects to move 75% of its purchasing online.

* IBM has reduced the time necessary for ordering supplies from 65 days to 23 days. It also has put all its human resources forms online. Big Blue has saved $7 billion through Internet efficiencies since the mid-1990s.

* More than 80% of Cisco Systems sales are conducted online.

* Charles Schwab has more than 40% of its $981 billion in customer assets in online accounts.

The uses of the Internet for bricks-and-mortar companies are growing well beyond the Web storefront, encompassing a wide array of services that help these companies prosper. One of those applications is the use of Web portals, discussed this month in our Internet/IP Technologies section.

During this year's ComNet conference in Washington, Jan. 30-Feb. 2, Communications News will meet with a number of e-business experts--in a roundtable discussion of the e-business trend and its implication on the enterprise marketplace. Among the participants are Gartner analyst Robert Egan; Katherine Hammer, CEO of Evolutionary Technologies (December 2000 cover story); and representatives from CacheFlow, Delano, Netifice Communications and NetWizards.

This potentially lively discussion on how e-business applications will impact enterprises will appear in the March issue. So, check out the Web portals coverage in this issue and stay tuned for even more insight next month, when we present "E-business for Enterprises." Finally, let me know how your organization is using the Internet to improve business processes and the bottom line.

kena@comnews.com