Will traditional brick-and-mortar companies win dot-com race? While the dot-com crash happened four years ago, many companies and individuals are still sceptical about pure cyber-trading companies, a fairly resolute sign that the traditional brick-and-mortar companies with a good branding and existing, tried-and-tested business processes already in place, are likely to take the lead in the new digital economy, even when it comes to online trade.
This is according to Gary Sweidan, Director at premier Internet service provider (ISP), DataPro.
"One of the exceptions might well be Amazon.com which, after years of haemorrhaging red ink, recently started to turn a profit. But despite this success story, it is far more likely that traditional brick-and-mortar companies with a strong existing branding will outshine dot-com start-ups that come to the market without any heritage - even though people are slowly starting to forget the dot-com crash.
"Although there is still a lot of glamour attached to dot-com companies - and this has resurfaced with the planned IPO of dot-com darling, Google, companies that want to embrace e-business, including the prospect of trading online, need to realise that a clear business blueprint is required before they willy-nilly embark on becoming e-business enabled.
"One of the biggest problems is that while companies have recognised the importance of embracing and harnessing e-business, they tend to acquire the technology first, believing these technological tools will turn them into serious e-business players."
Sweidan said technology should be looked at in conjunction with intellectual tools - and intellectual capital - when devising an e-business plan. "Companies first need to have a very close and honest look at their business fundamentals, such as what the ultimate goal of the company is, what are its current and future business objectives, what kind of people skills does it currently have, and what kind of customer does it sell to. When you have a clear, objective and uncluttered understanding of all the elements within the company, including a good indication of how your staff will adapt to new technology - and how you will help them in this regard - then, and only then, is it time to start selecting the tools that may be required.
"A company will also have realise that some of its current staff members might not be able to make the transition. New staff with the right profile and skills might need to be employed. This cost must be factored in - as well as the possible cost of retrenchments. It is also of fundamental importance that management ensures that the company has a buy-in from its partners and customers."
He said it could be disastrous if a company rushes the transformation to an e-business enabled company. To become truly e-business enabled requires a methodical, step-by-step approach.
"What is an absolutely critical consideration for those companies that are reliant - or that expect to become reliant - upon an Internet-based model to make money, is the need to ensure that their customers actually want to shop online. If not, they first need to change their customers` mindsets - or fundamentally change their business model. In addition, if you create expectations and lure your customers to transact online - and there is partial or no fulfilment, a company could falter extremely fast, and may even face bankruptcy. Online customers," warned Sweidan, "traditionally want immediate gratification.
"Research has shown that if they order something they expect it to be delivered on time, in good order - and they also expect it to be the correct item. Some companies are falling short when it comes to fulfilment and they are destroying their chances of succeeding as e-business enabled companies."
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