06 July 2000 - Congratulations. Your company now has e-mail and a Web site, and maybe has even made some sales on the Web. But this doesn't necessarily mean that you're running an e-business.
Becoming an e-business means rethinking your organization -- large or small -- to see where technology makes a difference. An e-business must have the willingness and desire to let technology improve every aspect of its business processes. This continual improvement and ability to adapt is part of what makes e-business so powerful and yet so daunting.
E-business is not an end in itself but an evolving process to enable better business processes. The companies that are transforming the way business is done know this, which is why they are continually reexamining their strategies, techniques, and tools in the light of new technology.
Because businesses are all different shapes and sizes, there is no single set of e-business technologies that is right for everyone. But in the end, almost all businesses come down to relationships. And that's what e-business is really about: It uses technology to build better relationships with customers, suppliers, and employees.
Maintaining better relationships with customers is the most obvious advantage of implementing Internet technologies. After all, without customers, your business would be doomed. Yet in many respects, dealing with customers is the most complicated e-business issue that your business may face.
At first it seems like a straightforward proposition: Put up a Web-based storefront and sell products. But even that apparently simple solution can be quite complicated. And remember that while Web-based storefronts are important for many retail businesses, retail operations account for only 18 percent of U.S. businesses, according to recent census data. Alternatively, B2B businesses sell components or sell through other businesses. For these businesses, marketplaces and vertical portals offer more efficient ways of selling products.
Many businesses sell services or a combination of products and services. And increasingly, customers want complete solutions. For example, when businesses buy PCs nowadays, they aren't concerned only about the hardware. Purchasing PCs also involves the software and services that come along with it.
The best e-business sites make personalization an integral part of the buying experience. By remembering who you are and presenting a custom view of the storefront, a site can provide a better experience for repeat visitors. Depending on your business, the appropriate technologies may range from simply tracking past accounts to setting up corporate buying pages to making recommendations based on past purchases.
Managing the entire customer experience is often the province of customer relationship management, or CRM, software. CRM software keeps track of all aspects of your customers, including your interactions with them, what products they have bought, and any problems they reported. At one time, this level of technology was limited to large companies with complex customer needs. The Internet, however, makes it easier for even the smallest companies to track all customer interactions.
An element of CRM, sales force automation tools track your customers or potential customers and alert your sales staff when to contact them again. Also as a part of CRM, some solutions collect data specifically for customer issues. It was once common for sites to bury support, fearing that the costs would completely eat away any profits. But sites are now realizing that good support will improve customer satisfaction and loyalty and ultimately increase the bottom line.
The ideal CRM solution combines sales force automation, customer support, Web-based storefronts, and integration with your internal systems. Unfortunately, the time and resources it may take to implement such a complex system may undervalue the benefits. Many businesses are finding it necessary to progress one step at a time, identifying the items that give their customers the most benefits and then moving forward. Even small steps can provide benefits quickly. As with most aspects of e-business, the technologies will change. But the sooner you get started, the more easily you can adapt to the changes.
Fixing the Supply Chain
Communicating with customers can help you sell more, but it's equally important to use technology to improve the way your business buys materials. Improving supply-chain management can cut the prices you pay for components and supplies, making the buying process more efficient.
Of course, how you deal with suppliers will depend on your kind of business and the type of products you are buying. Most businesses need general products (such as office supplies) and products tailored to their specific markets. For general products, companies can look to electronic marketplaces that automate product ordering, delivery, and tracking.
Vertical portals or vertical B2B electronic marketplaces, on the other hand, are tailored to specific industries. For instance, there are now marketplaces designed for everything from chemical supplies to apparel.
Whether to join or create a B2B exchange or marketplace is an important decision. For buying standard office supplies, it may be an obvious choice. But when it comes to buying components for specialized products, you must balance the efficiencies of having your own private system against joining an industry-wide consortium. The former protects your interests, is likely to integrate better with your other systems, and gives you more privacy and security. The latter, however, may be less expensive, easier to implement quickly, and more efficient.
The Challenge Inside
Improving the technology and information your employees have may sound like a luxury. But it's not. In fact, helping your employees understand the business better can lead to better decision making. In turn, you can significantly improve the way you deal with customers and suppliers -- not to mention improving the bottom line.
All sorts of internal systems lend themselves to being adapted to Internet technologies. These include traditional systems, such as accounting, personnel systems, and more complex enterprise resource planning (ERP) systems that keep track of all the elements of your business.
Internet-based technologies are also having a tremendous impact on how employees communicate. Employees are traveling more and working from remote offices, yet they still act as productive parts of the business via systems such as virtual private networks. And new collaboration tools are making it easier for people -- both those inside your organization and colleagues from the outside -- to work together.
Perhaps the biggest change is giving employees more access to information within the company. Every business has employees with specialized knowledge that could be useful to other workers. Knowledge management systems attempt to collect information and make it easier for employees to track down the material they need.
Individually, any of these solutions can help make your business more efficient. But keeping track of the types of information and services that a business needs can be a challenge for your employees. Many companies are trying to tie it all together in a corporate portal. Corporate portals are the equivalent of My Yahoo! but designed specifically for your business. The ideal system aggregates key data, resources, and applications (such as your e-mail and calendar info), links into your knowledge management systems and collaboration products, and provides alerts from CRM programs. Almost no business can pull all of this together at once, but the first steps can be the most important.
To be a great e-business, you must choose the right technologies and solutions. This includes picking the right PCs, servers, peripherals, and components. And as application service providers (ASPs) become more prevalent, it also means picking the right partners. Most important, it involves integrating all of these products, services, and technologies in a way that allows your business to attain its goals.
Implement these technologies well and e-business can make a profound difference for your customers, suppliers, and employees. Ultimately, this will improve your entire business.
The contributors: Michael J. Miller is the editor-in-chief of PC Magazine. Frank J. Derfler, Jr., is senior networking editor, and Cade Metz is a senior writer at PC Magazine. Sarah L. Roberts-Witt and Heath H. Herel are freelance writers. Larry J. Seltzer is a frequent contributor to the magazine. Executive editor Ben Z. Gottesman and associate editors Sean Carroll, Matthew P. Graven, and Davis D. Janowski were in charge of this story.