Look anywhere today and the impact of the Internet on our lives is evident, but none more so than in business. The excitement and hype surrounding Internet based technologies and opportunities fill the business magazines and talk shows of the day - it's a gold rush with prospectors and start ups appearing over night. Accepted, tried and tested business models are being turned inside out while business leaders wrestle with the challenges and changes that face them.
And if you thought this was exciting and fast then hold on because the Internet in business is just an infant. The hype, excitement and increased rate of change are certain to continue for the next few years and fortunes will be won and lost as the quickest companies advance over the slow.
Today the Internet abounds with sites that focus on business-to-consumer interactions. The success stories of Michael Dell (Dell Computers) and Jeff Bezos (Amazon.com) and their revolutionary online business models now required reading at business schools around the world. Business-to-consumer markets represent but a fraction of the total estimated business value, the bulk of the volume is represented by transactions effected between businesses. But in South Africa and for that matter across the world there are only a few examples of true business-to-business environments.
The reasons, which are varied, include managements misunderstanding and trepidation, poor and disparate back office systems, technology focused approaches driven by Information Technology departments without CEO and executive sponsorship.
The results are niche product solutions of business-to-business commerce sites fraught with problems resulting in customer and employee dissatisfaction and increased total cost of ownership (TCO). The reasons for these failures are the number of disparate systems in use at companies. The Internet site simply represents another island of information that has to be recaptured into finance and logistics or planning systems. Each step representing another point of failure while the overall effort to the company and the TCO is substantially increased.
Enterprise Application providers like Baan have been quick to see this emerging requirement. Companies who have already seen the benefits of enterprise resource planning (ERP) applications, which focus on business process optimisation within the business are more ready to move into the external phases of business optimisation which include e-business and customer relationship management (CRM). The integrated nature of these applications ensure that companies are able to fulfil the promises made to customers in the front office while managing the processes and finances in the back office. Since the integration between systems are taken care of the TCO and effort required for deployment and ROI realisation are quicker.
Whilst the shake out between application providers takes place a similar thing is sure to follow as business on the Internet begins to mature. The online world will begin to reflect the establishments of the physical world we know so well. While start ups will have their success, and companies undergo rapid and large-scale transformations, established bricks and mortar companies ahead with computerisation programmes will fast begin to dominate the online world too.
Behind the hype e-business is fundamentally about businesses being able to transaction with their customers, partners and suppliers electronically. None are more prepared for this than companies that have had large-scale deployments of Enterprise Resource Planning and Customer Relationship Management systems.
When it's all said and done, it's a sobering thought to think that Sears Roebuck introduced electronic commerce in 1906 with the Sears catalogue making goods available to an entirely new audience through the telegraph and electronic ordering.
Hmm how things do change...
Share
Editorial contacts