Seen steps to E-business Success

Software Magazine, Feb, 2000 by Ian S. Hayes

Companies have to reinvent themselves to survine, and the need for Interdisciplinary thinking has never been greater

The e-business revolution is impossible to ignore. It is transforming businesses in virtually every industry and reshaping the global, economy. Organizational structures and operational practices that have served business well since the Industrial Revolution are suddenly obsolete. The entrenched distribution networks that once served as formidable barriers to competition may

suddenly become liabilities, unable to respond to the new demands of the marketplace. Who can blame a corporate executive for being bewildered when a newly public dot.com achieves a market capitalization exceeding many well-established Fortune 500 companies?

The heart of e-business is interconnectivity and interaction. The ability to reach more people while sharing information of increasing richness creates new opportunities for value creation in areas such as marketing, customer service, and operations. However, equal access to information eliminates long-held advantages in business relationships and drives pricing to commodity levels.

In this new world, status quo is not an option. Companies have to reinvent themselves to survive. Given the fast pace of e-business change, actions that once took years to accomplish must now be done in months or weeks. There isn't enough time to pursue business transformation in the classic sequential approach. Unfortunately, the desire for speed causes companies to skip essential planning activities in their drive to implementation. As always, however, planning is everything. New products and services cannot be created without a strategy. Strategy must be guided by vision. Vision cannot be developed without truly understanding customers, the market, and the competition. The effort saved from skipping these steps is lost many times over in missed opportunities and time recovering from mistakes.

The following seven-step process can help guide a company through its e-business transformation. These steps -- Start High, Think Fresh, Know Your Market, Set Vision, Define Strategy, Create, Refresh Regularly -- cover the gamut of e-business activities, from conception to operation.

1. START HIGH

E-business means more than developing a fancy Web site. Fully embracing e-business means radically changing your business. While the seeds of radical change may germinate in the lower echelons, bringing them to fruition throughout a company requires high-level executive involvement and commitment. Without this level of buy-in and sponsorship, an executive always has the power to quash an idea that he or she doesn't believe in, and subordinates may feel free to buck the e-business initiative. Involving the CEO and his or her direct reports is the only way to get an c-business concept off the ground.

To pursue e-business, a company must accept that it is a business rather than a technical endeavor. While technology is important to support the e-business initiative and to deliver results, it is a small component in the grand scheme of e-business issues and opportunities. In a 1999 Cutter Consortium survey of 134 companies, 49% of those doing e-business report that the business side owns the initiative, 32% share ownership between business and IT, and 19% vest ownership exclusively in IT. Clearly, technology is not the driving force behind most e-business endeavors.

If a company is serious about e-business, it must welcome the radical change that will ensue. Executives may have to jettison traditional, profitable business models, and recreate or even cannibalize their companies to tap their e-business potential. Witness the spinoffs of barnesandnoble.com arid toyrus.com from their parent companies.

E-business initiatives may also cut across corporate boundaries, shifting organizational structures, redefining job descriptions, and upsetting established processes. External parties, from shareholders to suppliers to business partners, will be affected by these profound changes. Only corporate executives can marshal the forces and commitment to launch an e-business program and to respond to the concerns of internal and external stakeholders.

2. THINK FRESH

The Internet revolution is radically changing the business game. Long-held rules and assumptions are disappearing, eliminating competitive protections and creating opportunities for the forward thinking. Rather than bemoan the loss of the past, use the e-business revolution as an opportunity to reevaluate your, and your company's, own assumptions about your markets and competencies. Start with a fresh viewpoint and assume that everything is open to question and change. Question what your customers are really buying from you. Is how you deliver your product more important than the product itself? This knowledge may lead to new ways of pricing your products and services. As businesses deconstruct and reform, which parts of your business are commodities and which ones differentiate you from your competition? E-business is not just about customers. Brainstorm about radically new ways to reach and serve customers, stakeholders, and business partners.