In the future, there will be no businesses, there will only be e-businesses. The risks of changing your business paradigm to e-business is mild in comparison with the guarantee that you will go out of business if you do not change.
These are the prophetic words of Dale Kutnick, president, CEO and research director of the research house META Group. "The risk in e-business is just screwing it up," says Kutnick. "There is no company in the future which is not an e-business."
At the METAmorphosis 2000 conference held recently in Pretoria, Kutnick laid the framework for business to go "e". The pundit of the electronic business model warned of pitfalls, and advised on what companies had to change to be prepared for the new environment that, he feels, will be the pervasive economic driver in the future.
"How do we remove the risk for our customers? How do we mitigate uncertainty for them? E-business is a strange new beast, and we need to tell them how best to play within its environment," Kutnick comments.
E-business is a strange new beast.
Dale Kutnick, CEO of the META Group
However, research undertaken by his company does point to errant e-business models being practiced by corporates and a further worrisome trend of corporates lagging behind the middle-tier players in e-business. One common incorrect practice is the focus of attention on traditionally important customer-facing areas of business, while operations and back-office integration lags behind.
"Four years ago marketing was all-important, but now companies should be raising operational excellence."
This shift in focus is underlined by the fall from grace of US Internet stocks after the Christmas period, when lack of fulfilment due to bad delivery infrastructure shook the foundations of customer trust in online purchasing, according to Kutnick.
"Relationship with your partners is very important," he notes. He sees the future as multiple small- and medium-tier companies that all fill niche needs, and rely on one another to fulfil the business chain. "On Wall Street, the hot companies are B2B, and every company has to get this relationship right before they can fulfil the B2C requirement. There is a niche for traditional brick-and-mortar companies slow to move into B2C to fill the gaps in the B2B chain."
Another problem facing companies - even established online businesses - is integration between front-office and back-office, delivering finally on the e-commerce promise. "A lot of companies still rely on sneaker-net," Kutnick reveals.
One of the outcomes of the new paradigm, he believes, is a golden age for small business. "Venture capitalists are falling over themselves to invest in the US," he says, and believes that the trend could spread here. "The highly inflated tech stocks allows the purchase of real assets," he says, citing the AOL/Time Warner deal as an example. "We are going to see a lot more of those," he predicts.
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