Hype, Reality, and Vision - e-business - Internet/Web/Online Service Information

There's still time to develop a proactive e-business strategy

If we judge the growth of e-business from what we read or view in the media, or from what we see in the stock market, it appears that every company is restructuring itself to become a "dot-com" or a "click-and-mortar." These companies are releasing spectacularly innovative and successful Web applications on a daily basis and, unless your company gets going this instant, all the good ideas will be gone and you will be relegated to the dustbin of history.

It's easy to get caught up in this hype, especially since it is partially true. However, the reality is a little different.

Let's begin with the truths. There are companies and industry categories that have thoroughly embraced and/or have been totally reshaped by e-business, with varying degrees of success. The bulk of the market, however, is still in the early stages of e-business adoption.

A recent survey conducted by the Cutter Consortium, entitled E-Business: Trends, Strategies, and Technologies, found that while 87% of the respondents had investigated e-business, only 42% were actually conducting e-business. For non-U.S. companies, the number conducting e-business drops to 29%.

Analyzing the types of e-business applications deployed by the respondents is even more instructive. By far, the most common uses for e-business arc the least sophisticated. For example, among customer-facing applications, brochureware (online product information) was almost twice as prevalent as self-service sales (81% and 43%, respectively, of the companies that have customer-facing applications). Deployment of more advanced functions, such as e-billing, e-payment, and self-service order tracking, drops to 22%, 21%, and 19%, respectively, of customer-facing applications. These figures show that, despite the hype, most current e-business efforts remain incremental. Even the companies actively conducting e-business are still concentrating on the most obvious and straightforward applications.

Thrive or Survive?

This level of e-business activity is not surprising, given the evolving state of technology and recent Y2K distractions. E-business is just emerging from the first stage of what promises to be a very long, but quickly paced, evolution. Over time, the number of companies conducting e-business and the sophistication of their applications will grow rapidly, In all likelihood, performance will eventually meet or surpass the current hype, and there will be plenty of opportunities for good ideas. The more interesting question is whether companies will pursue e-business to thrive or survive. As of now, the latter philosophy seems to be winning.

Incredibly, only 29% of respondents in the Cutter survey consider e-business to be a major strategic weapon. Of the remaining respondents, 41% essentially admit that outsiders drive their e-business strategies. Their strategy is completely reactive, viewing e-business as a response to competition (37%) or demands by partners (4%). The final 30% of respondents have yet to accept the value of e-business, primarily considering it experimental or peripheral.

These numbers have far-reaching implications. As early e-business experience has shown, there is tremendous value to being first to market. Just ask Amazon.com. This impact is not limited to the consumer market. In business-to-business (B2B) markets, the first players are also setting the standards by which the followers must operate. These standards become formidable barriers to future competitors. Viewed in this light, it is hard to understand why the majority of surveyed companies are willing to have their e-business strategy imposed upon them by others. Or is it?

Vision and Hard Work

For established companies, e-business is a new and very different challenge. It cuts to the core of their operations and threatens to disrupt their currently successful and carefully crafted business models. Putting up a Web site is simple, but shifting to selling products through B2B trading communities has enormous implications for sales, pricing, marketing, and even product design. Given these ramifications, it is not surprising that inertia and human resistance to change will prevail until a company is forced to react to competition. It is this inertia that creates the current market opportunity for dot-com companies and forward-thinking traditional companies. The dot-coms have the advantage of not being constrained by an existing organization, while the forward-thinking companies have the advantage of experience and infrastructure.

These companies view e-business as an opportunity rather than a threat to the existing order, Ironically, companies following a reactive strategy are likely to suffer painful disruptions to their current methods of doing business from changes made quickly and under duress.

Fortunately, there is still time to move from a reactive or incremental strategy to a proactive strategy. All it takes is vision, the right attitude, and hard work. View e-business for what it really is--the greatest opportunity of our careers. It provides the means to enhance operations, improve service, expand sales, reach new markets, and offer products and services never possible before. Identifying a high-potential idea in any of these categories can generate significant enthusiasm and excitement among company executives and shift the company's perspective on e-business.

Thinking big in e-business requires questioning constraints and moving beyond internal and external organizational boundaries. It requires a range of business, technical, and creative expertise. One method of generating a set of high-powered ideas is through the use of visioning sessions. These sessions gather a team of individuals from a variety of company disciplines such as IT, sales, marketing, manufacturing, etc. They may even include external participants such as customers, suppliers, solution partners, or ad agency personnel. The charter of each session is to brainstorm using the team's collective expertise and explore opportunities to apply e-business in new and creative ways.

Potential session topics include taking a broad view of processes that cross organization boundaries, analyzing customer desires and different means of supporting those desires, revisiting supply and demand chains, and considering the implications and opportunities created by competitors' actions.

Some tips for visioning are:

* Create the right teams. There is a fine balance between having a team with a wide range of expertise and creating a group that is too large to be effective. Include individuals based on their ability to contribute in a team environment.

* Conduct multiple sessions with different teams if needed. Start with a small, focused internal group to develop some basic ideas. These ideas become "straw men" for subsequent sessions with participants from other areas or from outside of the company. This practice allows a wider variety of individuals to participate in a focused manner while keeping team sizes manageable.

* Check egos at the door. The changes that may result from an e-business initiative can be threatening to some. Since these sessions are about swapping ideas, not making policy, it is important that everyone keeps an open mind while holding egos and political aspirations at bay. Similarly, the facilitator must ensure that no one overly dominates the session.

* Stay focused. Without controls, it is easy for a visioning session to move off-track. While these sessions shouldn't be overly rigid, they should be "time boxed" and facilitated to ensure that they produce meaningful results.

* Consider outside assistance. It is often helpful to have objective, outside support. A trained consultant can facilitate the session, contribute best practice ideas, and help in the compilation and interpretation of the results. Be sure to select a facilitator without a vested interest in the outcome.

E-business is too important and its stakes are too high to proceed incrementally or to let others dictate your company's strategy. Although e-business reality lags several steps behind the hype, the pace of progress will grow exponentially over the coming months. The benefits of pursuing an aggressive e-business strategy will quickly outweigh the disadvantages. Ultimately, do you really have a choice?

Ian Hayes is founder and president of Clarity Consulting Inc., Hamilton, Mass. He specializes in strategic consulting on IT issues such as e-business, insourcing, outsourcing, and process improvement. E-mail him at clarity@clarity-consulting.com.

                 ROLE OF E-BUSINESS IN CORPORATE STRATEGY
Experimental            13%
Peripheral              13%
Response to Partners     4%
Response to Competition  4%
Major Weapon            29%
Other                    4%
Source: Cutter Information Corp.

COPYRIGHT 2000 Wiesner Publications, Inc.
COPYRIGHT 2000 Gale Group