e-Commerce - the 6 fundamental business changes

Irving Borwick, international change management associate of , a leading enterprise solutions provider, presented his paper "Why think e-Commerce?" at their recent national executive briefing.

With so many articles on e-Commerce, the businessman is flooded with views, opinions and advice. Granted that we now realise the importance and urgency of e-Commerce, however, some are still looking for the basics in order to understand "why" e-Commerce. The immediate, and obvious answer is the marketplace is moving so rapidly that you will be left behind, miss out the potential staggering revenues or prospects and participation in digital communities.

Let`s take a moment to reflect on a "before e-Commerce" and "after e-Commerce" scenario, as e-Commerce has brought 6 fundamental changes to the way we do business today :

Scale vs flexibility

Flexibility reduces productivity - as Ford famously said, you can have any colour you want as long as its black. In the computerised electronic era, you can mass produce customised products - Dell, Levis and Amazon are commonly quotes examples.

Choice vs inventory

Large inventory used to mean increased choice and costs, with a lower inventory offering increased turnover and profitability for companies. However, information now replaces inventory and logistics replaces warehouses. The DHL, Fiat and Auto Parts international relationship gives a working example of how this concept works for all.

Customisation vs price

A standard product was always cheaper than a customised one. CAD and the Internet has changed this view, offering mass production possibilities - allowing you to specify your jeans, shoes and shirts for almost the same price.

Vertical vs customer

Car dealers, clothing manufacturers etc worked in a vertical distribution that rarely saw them connecting with the consumer. Companies now know their individual customer - their needs, likes and tastes. They have made the consumer a member of the organisation through simple techniques such as asking your e-Mail address before you commence any transaction with them.

Bundled vs focussed

How do you make a product that will satisfy everyone? That was the challenge of mass marketing. The traditional challenge was to bundle together the attributes that will satisfy the most people. The electronic era allows you to customise for each customer through information management.

Service vs price

The greater the service offered, the higher the cost to the company. Now, by reducing the time required to service the customer and reducing the service provided, the lower the cost to the company. Previously achieved through ATM`s, e-Commerce now makes the consumer both a customer and an order entry clerk when he keys in his product requirements.

Relationships are a key point when considering "why e-Commerce". Traditionally, one had a transactional relationship with clients - e-Commerce is now moving the customer to become enmeshed with the company, making them an integrated part of the whole picture.

It promises to be a challenging few months ahead whilst determining which e-Commerce strategy is best for your company, along with the technological requirements that are necessary to make it happen. But one fact that cannot be ignored is that e-Commerce will be a very big part of our lives - be it business or personal - we are looking forward to the journey ahead!