Many companies have attempted a relatively straightforward approach to getting into e-commerce. They have grafted Web sites onto their time-tested ways of doing business. Predictably, the results have been disappointing.
Now, e-commerce is evolving into "e-business," and e-business is transforming both the marketplace and the companies that provide its products.
Firms that still follow old-fashioned organizational models are discovering that to stay competitive, they must adopt new internal organizations "built on an interconnected Web of enterprise applications," according to Dr. Ravi Kalakota and Marcia Robinson in their book "e-Business: Roadmap for Success" (Addison-Wesley, $39.95, paperback).
Making the transition is not easy, they add. "e-Business is the complex fusion of business processes, enterprise organizations, and organizational structure necessary to create a high-performance business model." The authors offer their well-written book as a "master blueprint" for transforming a traditional firm into "a new agile e-corporation."
They identify and explain three steps for e-business design:self-diagnosis;reversing the value chain; andchoosing a narrow focus.
First, you must determine how customer, business, and technology trends are affecting your company. Is your firm a market leader, an "early adopter/visionary," or, as most are, part of the "silent majority" that still resists change?
Second, you must face what the writers term "the greatest challenge in e-business--linking emerging technology to new business designs." Doing this requires turning your thinking inside out. No longer can your business define itself by the products it produces. Now you must produce what customers want, when they want it. And you must stay alert to rapid changes in the marketplace.
Third, find out what your customers most care about, and narrow your focus on those items. It may be hassle-free service, low-cost products, or excellence in innovation.
"Learn to outsource," the authors add. "You cannot be good at everything." Indeed, they note, many companies are turning to business process outsourcing (BPO) to save money or hit new markets faster with less up-front risk. BPO lets you focus on your core competencies--what your business does or sells. Meanwhile, you outsource some of your cost centers, such as human resources and purchasing, to companies that specialize in those areas.
The facts and examples in this book are aimed mainly at managers and executives of big companies. However, lone-wolf entrepreneurs and managers of small firms also can benefit. Roughly half of the chapters are devoted to exploring the various e-business design elements in the new e-corporation. One very useful feature of this work is its "Memo to the CEO" at the end of each chapter. These memos quickly summarize key challenges. They also pose and offer answers to a number of questions that management must consider.
"As the digital age progresses," Kalakota and Robinson point out, "companies must react more quickly to customer needs, bring products to market with greater speed, and respond more completely to changing business conditions." Nimble structures and efficient management of information will be the major keys to success--and survival--in e-business.
