By Bill Stewart
E-business expert predicts that those who fail to establish a Web presence will be left behind
Staff Reporter
Vancouver Business Journal
Don't be fooled into thinking the dot.com massacre during the last 12 months was the beginning of the end for e-business. Maybe all of those half-baked ideas that lost millions of dollars just served to illustrate that we are only scratching the surface of what can be accomplished through the Internet.
Yet, the Internet has already become such an integral part of our economy that the companies that fail to establish an e-business presence within the next few years could be left behind. At least that is the opinion of Jack Shaw, an e-business expert who conducts nationwide seminars on the subject.
Shaw is not suggesting that every company will have to sell its products on the Web. For some companies, the Web may be best utilized for processing orders with suppliers and other trading partners. For others, the Internet may be the best way to provide customer service.
For those who choose to ignore Shaw's advice and fail to get on board, the consequences could be dire. “They will either go out of business or be acquired by those who already have an e-business presence,” Shaw predicted. “You're not going to be able to stand in place and tread water. If you make a halfway effort, then you'll slowly lose ground… and in five to 10 years, you could be out of business.”
Most large- and medium-sized businesses already have a Web site, but that's not always enough. In order to be a true e-business, Shaw said a company must convert its key business processes into a digital format, which can be accessed through the Internet.
The goal is to turn time-consuming tasks into projects that require little or no human intervention. “We don't want to waste the valuable time of our people taking orders,” Shaw said. “We would rather free up that time for people to strengthen their relationships with customers and to solve problems.”
That's one of the end results of a well-run e-business. To get to that point, each company needs an e-business strategy, Shaw said. The most important processes should be at the top of the list, with everything else done later in stages.
That's one of the messages Shaw conveys at each of his seminars, including one held recently by Vancouver's Executive Forum, which bear the same name as his latest book, “Surviving the Digital Jungle.” While he lauds the importance of e-commerce, and shows examples of ways by which businesses can redesign their processes, he leaves many of the details to individual companies.
“You'd be amazed, when I do my seminars, some people think I'm going to tell them what software to buy.” Shaw said. Instead, Shaw talks about the importance of developing an e-business strategy, then carrying through with those plans and making adjustments when needed.
“You don't have to start doing it all right now. What you have to do now is start developing a well-thought-out plan,” he said. “Then you have to figure out which processes need to be transferred to digital right away… and decide what training you have to put in place (to facilitate the change). “Then you have to come back in a year and review the strategy… You're never done.”
It's such an intensive endeavor that a full-time “change manager” will be required to oversee a company's e-business project. “If you're going to be successful with it, you need to have dedicated management in place to make that change happen.”
The general rule of thumb, according to Shaw, is to have 10 percent of a company's workforce handling the change management. In some cases, that may require re-defining the role of a company's information technology department, or going outside the firm to hire someone who specializes in the field.
It's easy to see how large companies should heed Shaw's advice, but it could be a difficult job convincing some small- and medium-sized companies of the necessity.
Rex Eads, founder and owner of Cascade Software Consulting in Vancouver, has encountered several smaller businesses that could benefit from an e-business presence but don't have the required budget. As an alternative, a small but growing number of Web sites offer abbreviated home pages that can be accessed from a central site. While the number of sales and marketing options may be limited, the cost is reasonable.
Even if cost was a minor consideration, Eads questions whether every business requires a Web presence. “A restaurant isn't necessarily going to be left behind without a Web site,” he said. “I think there will always be room for companies that don't have a Web presence. But they may have to do other things to make up for that.”
Eads does agree that some companies and industries have no option but to get on board, even if it means only creating an e-business site for vendors and trading partners.
Cascade Software, which supplies temporary manpower to help companies implement software and Internet strategies, is a good example of a company that would gain little benefit from an e-commerce site. However, Cascade's Web site does give the company an important presence. In particular, it saves the company time and money that would be spent on scanning resumes of prospective employees.
Eads also questions the wisdom of having only a Web presence. Some of those sites failed miserably, and Egghead.com is struggling to survive after deciding to close all its retail outlets.
For some products, Eads said it will be difficult to train or condition consumers to buy through the Internet. That's true of the automobile market, where consumers prefer to kick the tires and take test drives before they buy. Yet, Eads said, auto dealers could cut as much as 25 percent of their inventory if they could figure out a way to use the Web to facilitate the buying process.
Cascade's president also has encountered companies that have an e-business presence but haven't bothered to integrate it with the rest of their marketing efforts, so the Web site is largely ignored. In some cases, sales people intentionally avoid telling their customers about the site because they don't receive commissions when sales a routed through the Web.
“Companies are most happy when they have a fully integrated marketing plan that includes the Web,” Eads said.
Chris Crowley, who last year founded HardRoad.com, a site that gives exposure to upstart bands, is sold on the importance of the Internet.
“I certainly think that e-commerce is here to stay and the Web is here to stay,” Crowley said. “If your business can be on the Web, then you have to be on the Web.”
“It's the next generation… Kids today don't know what a record player is, but they sure know what the Internet is.”