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The Journey of 'e'
Everyone's talking about eBusiness these days and how it's changing the world. And it's true - eBusiness has enabled organizations to be borderless by seamlessly sharing information among suppliers, partners, and intermediaries. But behind all the hype, eBusiness is really a transitory business method driving the evolution of our information age economy into what will be known as the frictionless networked economy.
eBusiness is a blend of new and old business principles, technologies, and models and it too has a lifecycle of its own. The journey of 'e'. What started as Electronic Commerce, has evolved into a high growth collaborative channel for products and services with lots of opportunity and plenty of peril. Right now, eBusiness is in the middle of its expected lifecycle with business models, processes, and technologies still being formed and refined. Back in the 1990s, when the web emerged as a viable market channel to new markets and customers, it became known as the fourth distribution channel. In the late 1990s and into 2000, the focus of eBusiness shifted to electronically connecting supply chains and vendors with their trading partners.
Today, the adoption of eBusiness is considered an essential competitive strategy for taking advantage of new business opportunities and defending current positions. While an emphasis remains on cost reduction and improving efficiencies, a primary impact of eBusiness' evolution is that it is driving a continuous re-evaluation of industry structures. These re-evaluations and the resulting redefinition of processes, business structures, and value creators are causing even traditional industries to converge into new forms, integrating horizontally or vertically, or with other industries. Going forward, industry convergence is expected to build to an inflection point, ushering in the arrival of the frictionless networked economy.
What does this mean to your company? The most important thing you need to know about eBusiness, as a business method, is it is fundamentally about organizations changing and becoming better at catering to the unique needs of their customers as a basis for maintaining relationships. With eBusiness dramatically altering industries as companies leverage new technologies and processes to electronically connect value chains, everyone is faced with the 'rules of the game' changing. The continued adoption of extended enterprises is forcing companies to change how they run their businesses and manage information. Increasingly, the focus is on improving decision-making and risk reduction in an era of continuous business cycle compression. At the same time, business constituents are increasingly interdependent, which has in turn, fueled the rapid evolution of technology and business models we're seeing.
Looking ahead, as industries refine their business models and converge, integration of eBusiness technologies with legacy and business partners' IT systems will become paramount hurdles to overcome. This is because there is a growing realization that many of the competitive advantages sought from adopting eBusiness are stymied due to inadequate infrastructure. In response, companies are significantly investing in infrastructure - application servers, dynamic integration technology, and web services. All the while, these technologies are continuing to evolve toward distributed infrastructures, sense and respond application ecosystems, intelligent analytics and optimized applications for network centric computing. Indeed, requirements like real time processing of data across value chains in response to emerging customer opportunities will demand that companies continue to adopt new technologies and processes.
As eBusiness matures and methods are refined, the business community will come to grips with the fact that the 'e' shakeout we're seeing is a natural step in the transition to a frictionless networked economy. The challenge facing thousands of businesses is how to ride the future waves of eBusiness and pick the waves that are right for them - lest they grab a monster wave and get swept against the rocks of transition.
The first requirement in successfully navigating the journey of 'e' is understanding - that eBusiness is a transitory business method - with new principles under which businesses need to operate. The second is an action- driven roadmap - except that the time horizon is short and compressed. With that understanding and a focused action plan, coupled with clear insights into eBusiness' future industry trends and the company's capabilities to leverage emerging opportunities - success can be had. Lest we forget, agility, along with flexibility are required on this journey of 'e' - not just to survive the natural consolidation of maturing business models and technologies - but also to be positioned properly for the next era in the transition to the frictionless networked economy.
Christine Crandell is president and co-founder of NBS/New Business Strategies, a market strategy firm.
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