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Caution: This was
written during the dot-com era.
The Information Age is maturing, the
Knowledge Age is upon us, and e-Business is supplanting e-Commerce.
"The Internet is not only creating a new industry in itself but
changing the competitive landscape of every industry in the world,"
says Ben Rosen.
| e-commerce = |
Harnessing the power of the Internet
to streamline a traditional business, e.g. Amazon as e-commerce
bookshop, Beyond.com as e-commerce software store. "paving the cowpaths."
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| e-business = |
Initiating a fundamentally a new business
which would have been impossible without the power of the Internet,
e.g. eBay. "inventing new business models."
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"The challenge for the Net is
to create new models for the new world, as opposed to porting over old
models. We take things from the physical world and put them on the Internet
and then wonder why there's no profit in it; of course, theyre's no
profit in it! Shame on you!" -- Jay Walker, Founder, Priceline.com
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Business
Innovation
Ernst & Young Center for Business Innovation
Starting the Conversation
by Christopher Meyer
E-business
[The web generation takes for] granted that global ubiquity is
free, that customers will tell them what's on their mind, that
the attention of people can be packaged and sold, that diverse
information can be linked together, that a capability can be embedded
in software and acquired by someone with whom there can be a valuable
exchange, that the speed of learning what's happening in the market
is more important than keeping competitors from learning the same
thing simultaneously. . .
. . .no one can afford to wait. The new models will be discovered
by those who are working at the frontier to understand what each
incremental step makes possible. Established businesses already
labor under the burden of a set of assumptions that no longer
hold; they must begin experimenting lest someone free of this
burden gets there first.
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Speed is the defining metric of e-business.
Your people must operate at Internet Time or you are cooked.
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"Upstarts with a T1 line and buckets of cash are humbling
companies that once seemed impregnable."
Busienss Week, The Internet Age, October
4, 1999
"[Compared to the evolutionary explosion of
new organisms 550 million years ago...] That burst of new life
both wondrous and dangerous is precisely what's happening in business
today. Out of this primordial technological swamp called the Internet
are emrging new companies, business models, corporate strcutures
-- even new industries. It's a time of such tumult and confusion
that no one can agree on what's happening now, much less on what's
coming next. In the five years since the World Wide Web made the
Internet unsable by mere mortals, everything we thought we knew
about business seems questionable."
Business Week, A New Era of Bright Hope and
Terrible Fears, October 4, 1999
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e-Business: Ready or not?
As we (IBM) have worked with customers
to develop and deploy their e-busienss solutions, we've learned a number
of valuable lessons. You can draw from what we've learned to help your
customers capitalize on e-business:
1) e-business solutions are created
by connecting and integrating business processes, information
and people. e-business solutions reflect the style of the Internet and
the World Wide Web.
- They are built from existing assets
- New function can be added quickly--as
long as it's base on standards
2) e-business soluitons continue to
evolve over time.
- New devices can be supported--on
a pllug-a-play basis.
- Information can be leveraged to
continuously improve the user experience.
3) e-business solutions must grow
quickly in multiple dimensions..
- They must support many new users,
even if they appear overnight.
- They must handle frequent changes
and additions to content and creative design.
4) Finally, e-business solutions must
work. They must offer:
- Reliability that builds trust.
- Security that builds confidence.
- Manageability that ensures performance.
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Business
Innovation
Ernst & Young Center for Business Innovation
Electronic
Commerce: The Next Generation
Alan Cohen John M. Jordan
. . .success underscores the need for relentless innovation;
e-commerce leadership is not possible without constant infusions
of new ideas. Indeed, the entire concept of "unique sustainable
competitive advantage" may be outmoded in an environment where
technological barriers to entry are low (compared to airlines
or manufacturing, for example) and where pausing for self-congratulation
provides a window of opportunity for a competitor.
Business will be increasingly forced to move in real-time.
As business-to-business interaction becomes more automated ("I'll
have my database talk to your database"), the slowdowns incurred
by the movement of paper will diminish. As "information float"
is reduced, response times will need to drop.
. . .responding with ad hoc efforts to global market signals
will be less tenable: "I'll get back to you" is already unacceptable
to many customers.
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| The Internet puts the customer in charge. It's
easy for customers to find today's best bargains, information once
jealously guarded up and down the supply chain. "For many companies,
customer ignorance was a profit center," says Gary Hamel. |
Pioneering companies are finding that
the biggest drag forging ahead with e-business progress is staffing.
Technical talent and the ability to innovate are in short supply.
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"For comapnies on the cusp of the Internet Age, the resource
in shortest supply is neither raw material nor capital, neither
powerful technology nor new markets. What keeps managers up nights
at these companies is the scarcity of brainpower, the talent to
give wings to visions of a future that becomes the present at
the speed of light. 'Capital is accessible, and smart strategies
can simply be copied,' says Ed Michaels, a McKinsey & Co.
director. 'The half-life of technology is growing shorter all
the time. For many companies today, talented people are the prime
source of competitive advantage.'"
Business Week, The Search for the Young and
Gifted, Octoer 4, 1999
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"People bring imagination and life to a transforming technology.
They bring success and profit to simple and complex ideas. Or,
as Dell Computer Corp. Vice-President Tehresa Garza puts it, they
bring 'hum.' Not the whirling white noise emanating from your
computer, but the very tangible sense of fully engaged people,
channeling unbounded energy into their work. 'You know it as soon
as you enter a building,' says Garza, general manager of Delll's
large corporate-accounts group. 'You can tell when a company feels
dead just by walking through its halls. We try to create the hum.
It's people who have momentum, who are working hard, and who are
excited to be here.'"
Ibid
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:"Internet Age companies rely on the initiative and smarts
of individual employees to foster decisions that are closer to
the customer and therefore more responsive to the market. The
ultimate goal, says CEO Jorma Ollila of Finland's telecom giant
Nokia, is 'flexiblity, an open mind, and transparency of organization.'"
Ibid
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"The thing that has constrained us for the last four years
has always been people bandwidth," says Amazon CEO Jeffrey
P. Bezos. "Just having enough smart, hard-working, talented,
passionate people to execute against our vision."
Ibid
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e-RM is Coming
from the Iconocast 10/7/99
___________________M a c r o v i e w
Digging for Gold **************** By David Batstone
Earlier this year, I traveled to Boston and checked into the Westin
hotel. After the clerk accessed my file online, he told me extra chocolates
would be waiting on my pillow just as I had requested at the Phoenix
Westin the previous month.
I think I'll go back to the Westin, just as I'll stay with any service
supplier that takes care of my personal needs. That's the value of good
data mining.
The goal of one-to-one marketing is to grow customers by delivering
tailored products and services that will create unbreakable, lifetime
relationships. Yet while a single view of each customer is regarded
as a critical business need today, only 2% of firms have that capability
today, according to a June 1999 Forrester Research report. A new breed
of applications, dubbed eRM, or "eRelationship management," are coming
to market to help companies better do this.
Forrester predicts that eRM apps will obsolete customer relationship
management (CRM) apps by 2002. Want to know how well your company is
using its existing database? Go through the following check list:
o Does your company know the current and future profitability of every
unique customer? Good eRM apps can segment customers by profitability
level and provide differentiated product services.
o Does your company know enough about its customers from past campaigns
so that it is contacting them how they want to be contacted, when they
want to be contacted, and with the right value proposition?
o Does your company increase customer profitability by allocating
rewards for its best customers?
o Does your company count unique visitors, segment customers based
on their online behavior, understand how online behavior drives sales
and identify opportunities to grow online sales?
o Does your company combine the transaction data from financial and
sales systems to quickly analyze and report an accurate, up-to-date
view of a company's sales status?
o Does your company report regularly on sales commitments and opportunities
in the pipeline? An accurate report on pre-sales data helps the sales
team identify where their biggest opportunities lie, and forecast if
they are going to make the quarter.
o Does your company capture and analyze high levels of details on
campaigns, measured against control and test groups, automatically calculate
ROI objectives, and seamlessly recalibrate campaigns based on the predictive
indicators that led to the highest yielding results?
o Does your company analyze log files from the site and/or call centers
to find out how customers tailor their array of products, in order to
determine what new product features, options and combinations to build
in the future?
How did you do? If you had to answer "No" to more than a few of these
questions then your company is probably squandering opportunities for
greater profitability. Customer care is only as good as a company's
ability to capture, store, integrate and disseminate data.
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If you don't see
e-business coming at you, perhaps you are suffering from corporate
dyslexia: The inability to see the handwriting on the wall.
"However much hype you 've heard about the web -- the
best thing since sliced bread or the printing press or sex or fire
-- whatever you've heard is simply not enough to describe what's going
on."
--Bob Metcalfe, inventor of Ethernet
Assess whether you're an e-business player:
Blur
Audit
How your relationship with customers will change:
Cluetrain Mainfesto
A Guide
to Succeeding in the Internet Economy, a
very thorough prescription from Patricia Seybold Group
"An organization's ability to learn and translate that
learning into action is the ultimate competitive advantage."
--Jack Welch, GE
The Great Training Robbery
Many managers have just about had it with what they
think of as the training scam. They re tired of having their people
taken away from their jobs to attend 'training,' only to have them
return without any more useful skills than when they left.
--Robert Mager
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Internet
Time Group