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Even big companies should maintain entrepreneurial flair


Johannesburg, 23 Jul 2004

These days companies have to continually adapt their business models - sometimes a few times a year - because of the changing dynamics of the modern Internet-based business world. Those companies unable to do so, or which are unable to react to the fast-changing market forces, could well be consigned to the dumping grounds of the business world, said Douglas Reed, managing director of DataPro, the premier Internet service provider (ISP).

Reed said that while revenue generation is naturally at the core of any company`s business objectives, revenue generation requires a number of elements, including natural resources, labour and capital.

"The ability to recognise market needs and then combine these elements to generate profits, is the key success factor. This," said Reed, "is called entrepreneurship and, without entrepreneurs it has been said that even the most endowed economy would not deliver desired results. Entrepreneurship is all about profit generation."

The entrepreneur label is traditionally ascribed to individuals who start or drive businesses, large or small, that are, or seem to be, sustainable. According to Reed, technologists have traditionally not fitted this mould. However, in recent years many technology-driven businesses have emerged as substantial competitors globally.

A fitting example is Dell Computers. "This is arguably one of the best examples of changing a business model that operated on the traditional distribution model. Dell`s ability to change its distribution channels through effectively harnessing e-business enabled a reduction in the myriad of distribution channels and subsequently a reduction in costs and an improvement in profits. Today Dell is one of the most successful companies in the world."

The crux here is that Dell did not change its business, it simply changed its channel that delivered the business. It is this ability to change business processes - and to recognise the need for change - that would distinguish the winners from the losers in the modern economy, reckons Reed.

"Technology - especially e-business - is driving more and more business decisions. Many of these decisions require innovation and courage."

It is not unusual to find more SMMEs (small, medium and micro enterprises) making better use of e-business strategies than established corporates - many of which are simply using the Web as a new marketing tool. Many design a Web site which does nothing more than operate as an `electronic` brochure.

"E-business strategy, one of DataPro`s key focuses, has given new meaning to the board room where a spirit of innovation and creativity is required. Traditionally corporate executives shy away from anything that is not branded `best-of-breed` or `tried-and-tested,` and tension can run high where opportunities to extend markets via the Web are shot down because of a cautious, wait-and-see approach.

"It is not only the ability to pinpoint the business trends on time that will be of cardinal importance, but the actual ability of companies, large and small, to re-engineer their business processes, that will carve a dividing line between losers, mediocrity and winners," he said.

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Simone Hawkins
BE Agency
(012) 346 3005