Creating an e-business strategy is not easy, but when it is done right, it becomes a powerful tool that can create wealth. Many South African companies recognise the need for a clear e-business strategy that incorporates the many time and money saving opportunities offered by the Internet, but struggle with the process of developing one.
One of the main reasons why e-business strategies have failed in the past, is that they require a fundamental mind-shift in the way an organisation conducts business. E-business is not a `plug-and-play` option. It will renovate all existing processes, affecting everything from how employees communicate with each other to how the supply chain is managed. The Internet asks companies to completely rethink their current strategies; this requires senior management.
Before a new strategy can be created or integrated into an existing corporate direction, there needs to be sufficient buy-in from top level management. This is where the first challenge lies and it is this obstacle that organisations need to actively address. Research conducted last year by KPMG Consulting cites inadequate senior management involvement as a main inhibitor of the success of e-business. The questions are: why does e-business need management involvement and why is this not happening?
There are many reasons for senior management`s lack of involvement but the most compelling explanation is fear. Change is scary and if we consider the current rate of change in the Internet economy, it is understandable that many people are uncomfortable with participating in it. Old economy companies slip into a state of inertia and stop questioning traditional methods and assumptions. This is dangerous, because for companies to enjoy the benefits of e-business, they will need to break away from old ways of doing things. The Internet forces organisations to think about how to approach fundamental business models in new ways. Unless senior management is ready to make the mental shift necessary to properly conceptualise the impact e-business will have on a company, the strategy will fail.
In addition to prior commitment from senior management an e-business strategy needs to be integrated with all internal processes in order for the cost saving benefits to be experienced. There are many local companies who firmly believe that they have effectively implemented an e-business strategy when the opposite is true. For example, organisations may be able to accept orders over the Internet, but the rest of the process is not e-enabled - the order is printed out and put through the existing paper-based system. Instead of revolutionising their ordering system, the Internet is used in such a way that the existing process is not improved. Therefore, `e-business` has no effect on the organisation`s bottom line. Companies like this will unknowingly sabotage their progress by not fully understanding how e-business can work inside the organisation.
An old Chinese proverb says that the problem is never to get new, innovative thoughts in your mind, but to get the old ones out. As we enter new territories, organisations need to realise that the primary challenge in the Internet Economy is to learn to allow our businesses, and ourselves, to change.
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