|ECMgt.com: Volume 1, Issue 07 - More top-level
executives will focus on and be responsible for e-commerce|
ECnow.com 1999 trend #04: More top-level executives will focus on and be responsible for EC
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July 31, 1999 *2,000 subscribers* Volume 1, No. 07
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Theme: Executives focus and responsibility for e-commerce http://ecnow.com/top10trends1999.htm
ECnow.com trend #04: More top-level executives will focus on and be responsible for e-commerce.
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Subject: ECMgt.com 1.07: Top-level Executive Focus and Responsibility is Needed for E-Commerce Success
At just past mid-year, my #4 trend prediction for 1999 is not on target, namely that "More top-level executives will focus on and be responsible for e-commerce." Although executives pay a lot of lip service to the importance of e-commerce in an organizations business strategy, most corporations have not taken steps that demonstrate an executive level commitment. It is key for the executive(s) to communicate their understanding of how the Internet will change the way they conduct business and incent employees to break out of their current mode of conducting business and find better ways of streamlining operations and/or satisfying customers.
Established companies who cling to the status quo will put their organization in ultimate peril. The Internet is not just a passing fad, as Bill Gates once stated and later changed his tune, but rather a means by which organizations can (and should) reexamine every facet of how they conduct business -- from their business models to their business processes. Using Internet technology can allow completely new or incredibly streamlined processes to be implemented.
E-Commerce (I use the words e-commerce and e-business interchangeably) encompasses " big picture" use of Internet technology to help an organization do a better job satisfying their mission statement. From the executive viewpoint, applying e-commerce to an organization means figuring out how to best empower the organization to make this happen.
What should come first, the Internet or the business? Unlike the age-old question of the chicken and the egg, in this case it's easy; it's the business. The Internet is just a technology that can be used to rapidly shepherd in new business processes, keep pace with changes being wrought in the economy, and enabling the company to experiment with new processes and business models that it may incorporate into its strategy.
The business strategy should assume the Internet, and allow for experimentation of the technology to drive new business models and processes. Executives need to create a vision for the organization that embeds the Internet into how they conduct business. That vision needs to be backed by high-level goals that are reflected in the incentive programs of every employee in the organization. Examples in the press of CEOs that empowered their organizations to take charge and backed that charge with appropriate compensation programs are Bill Gates of Microsoft, Michael Dell of Dell Computer, John Chambers of Cisco, and Rob Rodin, CEO of Marshall Industries.
From reading the press reports and talking to clients, students and ECMgt.com readers (as seen in the comments from the readers below), empowering the organization with the right tools to effectively take advantage of this new paradigm is absolutely needed. But it is not yet happening universally. Two examples from the media that demonstrate this trend were reported in TechWeb in April '99 and in CNN in May '99. The first reflected that execs can't define what e-commerce is and the second described the situation of executives around the world who are just now getting online to discover and learn about the Internet.
CEOs Don't Know What E-Commerce Is
"NEW YORK -- Defining e-commerce or e-business just isn't possible. This was the conclusion of panelists at the Internet & Electronic Commerce Conference and Trade Show here in New York Tuesday. "I don't have a clue; it doesn't mean anything," said Gary Eichorn, president and CEO of Open Market, a Burlington, Mass.-based software company, during the panel "The Future of E-Business." "To me, it's e-gads. We refer to it as Internet commerce, meaning using the Internet to do business.""
Executive Web use may spur e-commerce (IDG via CNN)
"Senior-level management support for e-commerce may get a boost as top corporate executives around the world log on to the Internet more frequently, according to an Andersen Consulting survey.
Andersen surveyed more than 1,700 executives at Fortune 1000 companies (or their equivalents) as well as leading government entities in 24 countries. What Andersen found is that senior executives in the world's major markets are going online more often and are becoming more comfortable using the Internet. For example, more senior executives in Australia, Spain and the United Kingdom logged on to the Internet in 1998 than in 1997, and they did so more frequently, Andersen said."
This is a call to all executives. If you're not afraid of what the application of the Internet will do to your industry and your organization, you should be. Please learn all you can from both traditional and Internet-based companies. Think about the possibilities. Decide on an action plan. Then empower your organizations to make it happen.
me leave you with two of my favorite quotes from our readers:
I hope you enjoy this newsletter.
See you in cyberspace,
President, ECnow.com <http://ecnow.com>
Publisher, ECMgt.com <http://ECMgt.com>
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PLEASE NOTE: Our bulletin board (http://ecmgt.com/bulletinboard.htm) allows you to comment on trends, and other issues, throughout the month. Please stop by and add your comments.
QUESTION: 'What do you expect to happen with top-level executive ownership and focus on Electronic Commerce'. Do you see executives taking a more active role ensuring the use of e-commerce (e-business) within their companies? Do you feel that the top-level staff at medium to large sized companies need to be involved to ensure that the benefits of a full-blown fully optimized set of e-commerce systems & processes be successfully deployed?
ANSWER: Yes and Yes
My feeling is that ONLY if top-level management are completely active & involved will their venture prove successful. Top-level people are assumed to be those who have totally holistic awareness of their company, its capabilities & its goals. Harvard Business School once made a statement that read "Everything that is manifested in an operation is a reflection of the person at the very top, and that includes Merchandise, Store interior, Staff behavior, Deliveries, everything including the bag the Consumer carries out of the store." E-Commerce will have a strong dependency on technological know-how, and expertise. However since the function of business is to make a profit, it is the business & marketing expertise that will define the participants' success. (R.P. - Toronto, Ontario, CANADA)
I think that Jack Welch's recent gathering of his troops to make it clear to them that he was not happy with GE's e-commerce initiatives so far may be a pivotal event in terms of top management commitment to and involvement in e-commerce . GE execs will now have progress on e-commerce as part of their performance metric and this will undoubtedly bring results. In the GE culture, they will perform or else...
Although the situation in other companies, large or small, obviously will vary greatly I think most senior execs now realize that they must get directly involved. What this means in terms of actions they will take immediately, or how long before they do act decisively, is unclear. But from what we are seeing from our own clients I sense that senior management now understands that e-commerce is here to stay and they have better get with it or suffer the consequences. (E.T. Menlo Park, California, USA )
I would have to answer that I see executives taking a more active role in ensuring the use of e-commerce (e-business) within their companies. It is the type of involvement and the kinds of executives that I see changing. Top-level staff involvement will be needed - as with any business model - to coordinate efforts, lead employees, and set direction for the organization. To do this effectively, a company needs to involve not just the IT division, but also those of traditional business models - Sales, Marketing, Finance, etc. Only through such an approach can any organization expect to have a full-blown, fully optimized set of e-commerce systems & processes.
My observance of companies that have successfully embraced the new EC business models revolves around two major factors. First there is a top level involvement - an internal "evangelist" promoting and teaching the new concepts to internal and external groups. Second, there is present a "flexibility" in the mind set of the organization as a whole - a willingness to see that what brought an organization to the current level of success may not be what will take them to the next - and most importantly the willingness to take action.
Any time an organization is making a major shift in how it will do business, it is usually not the technology that is lacking - but rather the people and process issues that must be changed. Change is difficult and inevitable - all organizations experience it - and their ability to adapt quickly and effectively often indicates a great deal about the management's (at all levels) involvement and commitment to new, innovative ideas. (D.S. ASIA PACIFIC)
Yes and no. I think the recognition of need is there, but the mood of the general consumer combined with the level of technology in South Africa prohibits / discourages implementing these kind of measures at this stage. While e-commerce is slowly creeping into websites, this is a slow process. Most executives are not digitally minded, relying on more analog commerce processes, so the decision tree starts (and usually ends) with the IT departments. The issue of distrust over giving out credit card information is still rife, which points to the fact that these kind of systems are still in their evolutionary stages - and haven't been used enough to be trusted.
At the executive staff level, their thinking hasn't reached notions of using e-commerce. In larger corporations, where IT managers have more ground and more voice, these kind of systems are being thought of, but not as of yet truly implemented. (G.C. - Cape Town, SOUTH AFRICA)
Time and time again I see failures in e-commerce and information systems implemented by organizations resulting from lack of top or executive management input. The mistake of first, not identifying specifically an organizations goals and objectives that are to be met through e-commerce systems and tools rest, eventually, at executive levels of management. Hands-on management -- ya can't beat it. (F.S. - Scranton, Pennsylvania, USA)
Yes I feel Execs are taking a more active role, but not enough of one, fast enough. Yes, top level staff need to be involved to broaden the perspective, and they need to educate themselves on the benefits and need to have such a strategy. (J.B. - Vancouver British Columbia, CANADA)
A few years ago it was a black box in IT. Now, it has become a fad for them based on the popular press. Over the next few years I think it will become more ingrained in the strategic vision of the organization, and thus more pervasive, rather than an exercise for the IT folks.
E-Commerce has become too much of a fad - senior executives want on the bandwagon, but they still don't get the strategic importance of e-commerce, nor do they help provide the vision needed to get the entire organization behind the efforts.
In order for an e-commerce system to be effective, they must be part of the strategic plans for each organizational unit - marketing, sales, operations, and IT. Since e-commerce cuts across all parts of the organization, senior management must be involved to set the vision. Is this happening today? In the more progressive companies directly involved with e-commerce (one example - catalogers). In general, it seems that e-commerce is championed by the IT staff, rather than the senior business leaders in marketing, sales, and operations. However, the tide is turning. (M.P. - Scottsdale, Arizona, USA)
In Silicon Valley, there is a greater awareness on the part of executive management as to the dynamics of change related to the Internet and emerging on-line business models. Outside of the Valley, VP level executives are much less Internet aware, less motivated to embrace basic business model changes, and much less technically literate. E-Commerce involves a major technical, and even liguistic, challenge to many executives in terms of basic understandings of current e-commerce and Internet technology. Therefore, it is rare to find a company outside of the Valley (or the Internet industry itself) that has a well conceived strategic plan aimed at the achievement of realistic goals and objectives. Even if there are departments (i.e. IT) where some knowledge is existent, there never seems to be a consensus among executives as to long term company objectives and strategic plans. (R.L. Sacramento, California, USA)
Most executives will continue to pay lip service to e-commerce but will allow some activity to go on with limited budget. However, when these limited activities continue to attract sizable revenue, they will start to pay attention, and want to do more. When a significant portion of their revenue is generated by e-commerce, they will declare victory, and foresight.
E-Commerce will revolutionize most processes in a company and will turn organizations upside down. Without the involvement of top-level executives, this process will be much more painful, slow, costly, and disruptive. However, top-level staff involvement is not expected in medium to large companies. Therefore, most companies will face a painful, slow, disruptive and costly change over. Many won't make it. Many will be replaced or displaced. (K.F. - Calgary, Alberta, CANADA)
In most companies, implementing e-commerce necessitates a paradigm shift in how they do business. Without senior management support, successful implementation is unlikely. E-Commerce impacts a number of departments (Marketing, Sales, Finance, Manufacturing, Shipping, etc.) throughout the company, who often have disparate agendas. Senior management must set a clear objective for the e-commerce implementation and communicate it organization-wide. They must also serve as a touchpoint for resolving the inter-departmental squabbles that happen along the way. (P.N. - Milpitas, California, USA)
Yes. The opportunities are simply mind boggling not to do so. Business transaction levels should increase. Currently, the levels are not good enough to sustain profitability and considerable gaining of critical mass is needed. It is like the Internet was 10 years back you know some professor at some university is using it but you really do not know how it will help you in your work/leisure
Companies need to link up supply chains, suppliers, customers, even consumers (e.g. in market research) and filter info from this vast array of data to really get a handle on the e-commerce benefits and opportunities. The biggest impact will be in distribution companies as everywhere credit cards are not widely used, to ship data and accept payment. A large base of users still pay cash for simple items - take India which has 100,000 credit card merchants in the country that is equivalent to the number of merchants in Jakarta alone. Obviously, in order to leverage the market, companies would have to have systems to ship products and get payments. This could be done by tying with local shops and shopping districts and finance companies, etc. The same goes for ancillary services like data, order, transaction processing. I guess the coming databases in companies will have to be measured in terrabytes of data if not higher. (A.B. - Calcutta, INDIA)
Electronic commerce fundamentally changes how a company operates. The information that needs to be known about the company, the internal and external access, the skill bases and the economics all shift significantly. Any executive that does not take ownership, influence and get involved or see to it that their company fully deploys e-commerce systems and processes has completely missed the new ship. Regardless of this thing called e-commerce, the deployment of systems and processes that provide instant access to information is a competitive imperative anyway and simply makes the business run more efficient and more effective. (J.A.M.)
I believe that top executives should be more involved in e-commerce policy and implementation strategy, tactics, and actions. Unfortunately at larger companies, especially those which are either in mature industries or have older CEOs, I would expect many of them to be uncomfortable in that role. This is because they view IT as a "cost" and not a benefit. They view IT as a delegatable role which is a necessary evil. They also do not wish to get involved in the detail process work necessary to make e-commerce work well. (T.P. - Los Altos, California, USA)
Yes, it has become most imperative that the top-level executives take part in the e-commerce initiatives of the company. E-Commerce is not only the responsibility of the IS department - it brings about a different focus within the firms in the ways of operating their businesses. It involves people, process, systems, products etc. E-Commerce initiatives need to be considered as part of the personal objectives for all concerned specifically top management because they are the people who lead the directional change within an organization. (V.S. - Irvine, Orange County, California, USA)
I believe that top-level executives and management of every international company (and many national companies) must take the lead to ensure the successful deployment of e-commerce activities in their organizations. They must create the vision and become the driving force for
change. They must understand the issues involved, the benefits to gain, and the consequences of inaction. Then they must make all other employees see these things and understand the company vision. Employees tend to be slow to embrace change. The leadership must be there to facilitate.
The world of business is changing rapidly, and it is now becoming a strategic imperative to enable e-commerce solutions. The growth of the internet and related technology is now making many new ways of conducting business possible. We all hear much news and noise about the very large e-commerce retail services like EBay, eBid, Amazon, etc. But the majority of e-commerce going on is less sensational bread-and-butter transactions like electronic customs documentation, EDI, EDI-to-Internet, on-line catalogues, electronic funds transfers, electronic forms, online freight tracking and ordering systems, customer feedback and supply chain management.
A company implementing these kinds of solutions provide better products and services for their customers, with faster delivery times and lower costs. They also reduce redundancy and errors in information delivery. Companies enabling e-commerce solutions are more profitable companies. If that is not enough incentive, your competitors in almost every industry sector are getting connected, and they will leave you behind. This is something every executive can understand. (R.W. - Edmonton, Alberta, CANADA)
Yes, I do believe top level executives will take a more active role in e-commerce for their companies. New top level execs are doing just that to put a "new stake in the ground." Current top level execs in companies must appoint or hire a very high level exec - possibly second only to #1 to successfully address EC. It is a brave new world with very different rules, and demands a radical approach from the traditional business. (S.G. - Austin, Texas, USA)
Some executives -- the more forward-looking ones -- will take ownership and jump in with real commitment; others will take a wait-and-see attitude, or task it off to subordinates without providing adequate resource commitments. Like company culture, leadership emanates from the CEO. If the CEO doesn't put it near the top of his/her personal priority list, it's far less likely to be at the top of anyone else's, and it will get starved for resources. Just as with e-mail and other new enabling technologies, the executives who get on board early and make a real, sustained commitment are the ones most likely to put distance between them and their competitors.
Scott McNealy once remarked that a good way to pick winning companies would be to give the CEOs typing tests, because that would quickly identify the ones that use e-mail constantly and are thus plugged into what's going on. Perhaps the next test should be to see how well they can navigate Amazon.com, or even their own web site! (J.S. - Sunnyvale, California, USA)
The executive level not actively engaged in electronic mediums are responding to e-commerce with knee jerk reactions in efforts to address the line items (e-commerce initiatives) requested by a board of directors. They react with simple moderate strategies that do not threaten any of their
existing strategies such as web pages and brochureware. Most respond with answers like "the Internet and e-commerce is for goods that can be packaged in a box and sent via UPS and you can use a credit card to pay for it" -- Fortune 500 Textile Company. When questioned about how to get steel in a box and ship it like e-Steel and MetalSite is doing, diversion is usually the tactic...but good questions and interest ensue. I find that most executives who respond with canned e-commerce answers are the ones who either don't have or use email. Email is a powerful testimony to executives who don't understand the benefits of e-commerce.
On the other hand, executives who do understand e-commerce can immediately relate to reduced transaction cost and where in their organizations e-commerce can be beneficial... I've found that with executives who understand e-commerce a presentation for solutions and strategies should take 5 minutes...if the benefit is not clear in that amount of time, my strategy and solution is insufficient. (D.W. - Alpharetta, Georgia, USA)
Yes, I think you'll see a continued emphasis on e-commerce at the senior management level to the extent that key executives will be given the responsibility to develop an e-commerce component for most businesses or to determine why it isn't practical. I agree that top level staff has to be involved and has to set ambitious goals for an e-commerce component. Otherwise the idea will wither since it will represent additional work to many as well as a new way of doing things--both will meet resistance without a strong commitment of top level management for implementation. (T.H. - Tampa, Florida, USA)
The quick response is that yes I see the Senior executive and owners, who are responsible for staying abreast of trends and market developments, driving the organizations they own/work into a much more proactive e-commerce deployment. (J.F. - Boulder, Colorado, USA)
Yes, I believe that top level executives will have to take a more active role since they will be the principals involved in "Setting the pace" of E-Commerce initiatives. If the decision to commit is not made high enough up the food chain, (which presupposes involvement) there will not be enough energy to see the initiatives through to the success that the entire entity requires. The only other "successful" alternative to the high level executive involvement would be to spin off the entire e-commerce operation similar to what has happened with some of the online banking operations. (L.C. - Pennsauken, New Jersey, USA)
Executives do not have a choice about owning e-commerce since it is fundamentally changing the way we do business. Switching costs are reduced and more information regarding products and services is more readily available. This gives more power to the customer and is going to make customer satisfaction one of the most important elements of eBusiness.
The only way to guarantee one-face-to-the-customer is to ensure that entire organizations buy into the implementation of eBusiness systems. This buy-in has to start at the top. (K.K. - Mountain View, California, USA)
Depends on how good and motivated at mid to low level positions - if they can do it well then top level staff only needs to give the order. (B.H. - Redwood City, California, USA)
Everybody needs to be, if not day-to-day involved, then aware of the possibilities of e-commerce and willing to alter their business practices to ensure maximum potential is achieved... This is a channel with potential that none of us can grasp, and future possibilities that none can guess and few can predict accurately [EDITORS NOTE: There are some of us that feel they can imagine and can predict]. This leap will be far more reaching than the theoretical example above. It certainly has the potential to affect business at all levels, it seems obvious that all levels of business must be ready and pro-active when it comes to e-commerce. (M.B. - Shipley, UK)
Yes, executives are taking a more active role in e-commerce. This is necessary or at the very least you need their buy-in and sponsorship in order for the mid-level managers to be successful. (P.S. - Minneapolis, Minnesota, USA)
Yes, if executives don't take charge of e-commerce, many will see their companies floundering in the coming years. As with any top priority program, if the top-level staff doesn't get involved, the activity at the lower levels with get the cue that it is not important enough to give it their best. (H.J. - San Jose, California, USA)
Top-level executive ownership and focus on Electronic Commerce will obviously speed the entrance of more companies getting involved with E-commerce. And business brings more business. This assumes, of course, that executives understand the medium and how their companies fit into the market. Some executives will do it faster than others. This will also tend to
cause more cost/benefit analysis to take place prior to entering e-commerce business. Additionally, companies will take more rational steps rather than jumping in full tilt. (H.H. San Jose, California, USA)
Yes. This is a critical ingredient in the success of the business and the executives need to drive it. (J.S. - San Francisco, California, USA)
Everyone is inundated with e-commerce today. The business world is very much a "keep up with the Jones'" environment. Consequently, executives are realizing they need to embrace e-commerce in one form or another and buy into the technology in order to just stay head-to-head with their competition.
Without buy-in from the top-level management, the project will never gain full acceptance from the people in the middle and the bottom who have to change the way they perform their jobs in order to bring in e-commerce systems and processes. (K.H. - Manassas, Virginia, USA)
Top level management will become increasingly more involved with B2B e-commerce. The reason is clear...B2B is revolutionizing the distribution channel and they better understand it and optimize it for their enterprise or suffer the consequences. It is clearly a major strategic influence on markets and that makes it a top management issue.
The major involvement from top level staff will be in the operations area and secondarily in the IT area. B2B e-commerce has the greatest impact on how one does business with both customers and suppliers and that's an operations issue. It also interfaces with the IT infrastructure, so the CIO will be involved but not as the driver. (P.T. - Alamo, California, USA)
I think top level execs in our organization will not get involved too heavily until about a year from now. It's the midlevel marketing folks that are at it at the moment, experimenting. (G.D. - Edmonton, Alberta, CANADA)
ECOMMERCE BUSINESS-TO-BUSINESS (B2B) DEVELOPMENTS
This section sponsored by - CONNECTINC.COM, please visit them at http://www.connectinc.com
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Dell Set to Launch ISP, E-Commerce Portal
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Vendors Target E-Commerce
ERP vendors are pushing into the e-biz market, offering the potential for tighter-than-ever integration. SAP last month announced its SAP Business-to-Consumer Selling and SAP Business-to-Business Selling products as part of its suite of mySAP.com Business Scenarios. Similarly, Baan unveiled its E-Enterprise line, which features modules for procurement, sales and supply-chain collaboration.
OfficeMax Launches International E-Commerce Web Sites
OfficeMax, Inc., the number three office supply superstore, (NYSE: OMX) announced Friday that it launched international Web sites in Japan and Mexico. This expansion comes on the heels of the company's recent success in domestic U.S. e-commerce efforts. Both sites use the native language of the host countries. The sites will offer more than 4,000 products targeted towards small-to-medium sized businesses. In the coming year the Shaker Heights, Ohio retailer also said it plans to launch a third e-commerce Web site in Brazil using the native language of Portuguese.
Intel Develops E-Commerce on a Chip
Functions for electronic commerce and improved network security will be hard-wired into PC technology by the middle of the year, a technological change that will likely jumpstart the electronic commerce industry.
Microsoft Commerce Group Comes Out Of Its Shell
Three months after it formed its Consumer and Commerce Group, Microsoft Corp. is starting to peel back the covers on some of the projects which CCG is undertaking. At the annual Microsoft financial analyst meeting in Seattle, the co-vice presidents of CCG, Brad Chase and Jon DeVaan, updated Wall Street and market analysts on a number of emerging Microsoft initiatives in this space.
set to go portal
Adobe's CEO talks about the company's Web strategy, and confesses that Quark's failed takeover bid had him worried
IBM Expands E-Commerce Program
Resellers can order products via IBM's web site. IBM said that after a successful trial run, it is rolling out its PartnerCommerce/QuickShip program from its initial base of 12 resellers to an additional 300 VARs.
E-Business Commitment Rises to the Top
Or does it?
By Gay Slesinger
"Get management commitment" is a prescription readily accepted by e-business strategists, implementers, pundits and consultants. Four years ago the advice was novel in an environment where technocrats were driving Web projects, often single-handedly, but today it is cliché. Its easy to say, "get management buy-in," but what exactly is it? How do we know when we have it? Or when we think we do, but dont?
Now the Internet is in the mainstream, "www" is a ubiquitous moniker, and doing business via the Internet is nearly obligatory. Business on the Web has risen from project status to strategic priority. It is not sufficient to have management buy-in; top executive support is critical. Of the four largest players in the hardware/software industry (IBM, Hewlett-Packard, Compaq and Microsoft), only one solidly has it today.
You may be thinking: If only one of four major players has the proper level of top management support for e-business, what does a CEO need to do to "buy in"? Looking back on the last few years, it is clear that key criteria for e-business buy-in include
Leadership Beyond Vision
E-business leadership goes beyond articulating vision and strategy, and announcing ones support. Leadership is not about mere involvement, such as reading status emails and holding monthly or quarterly reviews. E-business leadership means being actively committed every day, and taking bottom-line responsibility for the success or failure of the e-business strategy and implementation. Leadership means linking ones compensation and, indeed, ones job, directly to positive results, the same as a CEO does with any corporate strategy. Remember: e-commerce is not a project; it is a strategic endeavor. The CEO must demonstrate commitment to e-business through action and accountability.
Action Beyond a Nod of Approval
What actions a CEO takes or doesnt take are the clearest indicator of whether or not the executive truly supports the e-commerce effort. Action is more than giving "the corporate nod" of consent to an e-business proposal. A CEO committed to e-business provides appropriate staff, sufficient budget, reasonable time frames and realistic goals. A committed CEO speaks in terms of renewable resources, not expendable resources. A committed CEO understands that the technology and market are evolving rapidly and tolerates ambiguity, the unpredictable and educated risk-taking, and leads the company in being nimble, flexible and resilient. A committed CEO has contingency plans and makes changes quickly as needed, while still moving the corporation forward toward the goal of positive results.
At the Speed of
"Internet speed" is another industry cliché, yet many CEOs struggle to adjust business models and processes to respond quickly to market changes. The CEO committed to e-business is up-to-date in real-time on the business and market status and does not need to depend on extensive core teams ("committees" with an updated name), lengthy review meetings and endless consensus processes in order to make a decision. The CEO committed to e-business makes an informed decision quickly, takes the appropriate actions quickly and assumes accountability for the results.
The Buck Stops Here, But the Bucks Dont
Lets note that accountability is not the same as responsibility. One can be responsible for e-business, but not held accountable. And if someone is held accountable, that person must have the authority to fulfill the responsibility for which s/he is accountable. This is not a riddle: all three elements are necessary.
Why belabor this basic empowerment tenet? Because with e-business initiatives, accountability must be for only one type of results: positive results. The CEO and all employees directly and indirectly involved in the e-business initiative must be held not only responsible, but also accountable for success; otherwise there are results, but not necessarily success. The strategic benefit may not be revenue in and of itself; e-commerce success also comes from cost savings and improved customer service. Employees company-wide are accountable for their contributions to success, for example, toward improved customer service ratings, fewer complaints, better customer retention, fewer processing errors, shortening the order-taking process, speedier fulfillment, lower cost of sales -- measured ultimately by profitability and/or stock appreciation. . Success is measurable and to be rewarded.
And the Winner Is
We do not have to look very far to see major examples of executive buy-in or the lack of it.
By far the most stellar example of executive commitment that demonstrates all four buy-in criteria is Bill Gates transformation of Microsoft into an Internet company.
The Microsoft transformation into an Internet-based company is measurable in increments of weeks or months, not years. In stark contrast, both IBM and Hewlett-Packard have taken years to get organized for Internet and e-business success, and as of this writing Compaq has yet to attempt it. There is comfort in recognizing that it is a daunting task for these companies, $31B and $47B in revenues, respectively, to transform into e-businesses and to effectively produce for this market as well. There is a ray of light in knowing that for the rest of us, though seemingly formidable, the task pales in comparison. And better yet, we can learn from what the major players have done or not done.
ECOMMERCE BUSINESS-TO-CONSUMER (B2C) DEVELOPMENTS
to Ring Up $36 Billion in '99
After 1998's E-Christmas shopping season, most observers predicted a slowdown for digital retail sales. But a new study shows that the momentum of consumer e-commerce hasn't skipped a beat.
As consumer privacy awareness grows, it's a good idea to let customers know exactly what you plan to do with their data. Some companies have the resources to handle this issue alone, but third parties can help those that don't. Here's a quick look at some services that are available.
trust in online businesses
IT'S been etched in our collective psyche as online merchants that some consumers have a tendency to distrust Internet businesses. Many people I know are wary of buying goods or services online
the Three C's of the Web? Well, Now There Are Four
PC Week's Eric Lundquist explains why "content, collaboration and commerce" are incomplete without "contribution."
Aims to Streamline Bill Paying Process
Does spending less time worrying about bills translate to more time to spend on spending? PayMyBills.com hopes so, as it introduces its new service to take the worry out of monthly bill payments. PayMyBills.com has launched a new online personal bill management service, allowing consumers to securely view and pay all their bills via the Internet
E-Commerce Goes Upscale
Next week will see the launch of Foofoo.com, which targets upwardly mobile young professionals who are looking for luxury goods and services.
Maybe That Portal for Pet Auctions Can Wait
A wave of mergers among online retailers reflects an increasingly tough market for "me-too" e-commerce plays. By most measures, Jerry Kaplan, CEOof Onsale, has done well on the Internet. He was early to hitch his company to online auctions and the burgeoning market for selling computers over the Net. And though, like most e-commerce companies, Onsale has shown no profits during the past couple of years, it did have more than $80 million in online sales in the second quarter of this year
Debuts Shopping Service
In an effort to bring shoppers both online and into their wallets, America Online rolled out the first phase of its Shop@AOL service, to be fully introduced across the AOL network by October.
eBay To Roll Out Magazine; Books Just Behind
When there's been millions upon millions of words written about you, it's probably only fair that you be allowed to put in your two cents worth. That might be what the popular auction site eBay (Nasdaq: EBAY) is thinking when it announced the anticipated late summer launch of eBay Magazine. The magazine will join two new books about eBay. The first is one in the "Dummy" series of books, the wildly popular series that has taught so many inept people the rudimentary skills of everything from word processing to auto repair. "eBay for Dummies" will hit the bookstands in August.
MBNA, CyberCash Launch Digital Wallet Program
MBNA, a leading independent credit card lender, and CyberCash have launched the MBNAbuy service. The electronic wallet service is designed to store customer payment, shipping, and purchase information on a secure electronic server to allow safe completion of online transactions. MBNAbuy allows customers to make one-click purchases at any Web page that displays the CyberCash InstaBuy logo. It uses industry standard Secure Sockets Layer (SSL) technology and 128-bit encryption along with two-part consumer authentication to ensure customer information security. The stored information allows shopping without having to repeatedly fill out credit card and shipping information for each online store.
Taking E-Commerce to the Masses
Startup beta testing a Web site that lets consumers create their own Web stores. The Stamford, Conn., startup is beta testing a Web site that takes the affiliate programs one step further. Consumers can create entire Web stores, with all the customer service, transaction processing and fulfillment taken care of by Vstore. They'll even host the site.
New Flap Over E-Commerce Tax
As the volume of Web transactions continues to soar, local governments want their cut. The pressure on the Federal Advisory Commission on Electronic Commerce ratcheted up this month with a call from a local government advocacy group for Congress to embrace e-commerce sales taxes.
The Standard's Guide to Net Lobbying
There now seem to be more Internet lobbies in Washington, D.C., than startups in Silicon Valley. Within the last few weeks, at least four new groups hung out their shingles. Omitting the traditional software and hardware lobbies, here's a quick who's who of Internet-focused organizations and their issues.
York Court Rules Net Gambling Illegal
Online gambling suffered a blow today as the New York state Supreme Court ruled that a casino with servers in Antigua nonetheless violates U.S. law if it accepts wagers from state residents. New York State attorney general Eliot Spitzer's Internet and Investor Protection bureaus were investigating Suffolk County, New York-based casino WIGC.
Guys to Ditch Computer Sales for Net Wares
Good Guys said it will exit the computer and home office products business by the end of this quarter to streamline operations and focus on communications and Internet service offerings.
Sellers Thrive Online
Fox Books in downtown Tacoma, Wash., was a typical used-book store. With perhaps 30,000 volumes, a few of them rare, but most common and forgettable, all jammed onto pine shelves in a dusty storefront. A few weeks ago, a team of movers showed up, packed up all of those books and carted them off to Powell's City of Books in Portland, Ore. Now those volumes are for sale on the Internet, ready for shipping to a reader in Indiana or South Carolina desperate for that obscure volume on Carl Jung.
Establishes Net Hybrid Strategy
Borders is rolling out kiosks in its bookstores, taking a major step toward linking its online and brick-and-mortar stores.Although current kiosks only allow customers to check the availability of books within the immediate store, the company will be launching a pilot project this fall to link selected kiosks to its Web site. The customers then will be able to check the Web site's database of some 3 million titles, and special order titles through a store clerk.
Takes Textbook Sales Off-Campus
College, private high school and distance learning students may soon find some relief from the textbook price gouge they endure each semester if a new program from VarsityBooks.com takes off. The online textbook seller has launched a new partnership program, aimed at fulfilling book sales for schools across the country.
American Express Launches Internet Bank
American Express has stepped into the burgeoning online banking arena launching an Internet bank under its powerful brand name.
Clark's Latest Magical Vision
He founded Silicon Graphics and shepherded Netscape. Now he's at Healtheon. Is Clark again in the right place at the right time?
Value of Web Mergers Soars to $40B
Acquirers bought 169 Web properties in the first half averaging $200 million each. The total value of Internet company mergers soared in the first half of this year as competitive pressures forced many newly public Web firms to give up their independence.
Recent Net Mergers Mirror Larger Trend
Analysts expect the Internet merger wave to continue, reflecting growing pressure to justify lofty stock prices.The way Excite@Home Corp president George Bell sees it, Internet mergers are taking place as a series of spasms in a non-stop industry-wide consolidation.
Novell Investing in Five Internet Companies
Novell Inc. announced that its Novell Ventures unit will invest more than $15 million in five Internet and network software companies. Novell Ventures (formerly known as Novell's Internet Equity Fund) is taking minority equity positions in Edgix, Food.com, Indus River, Red Hat, and W. R. Hambrecht. Novell is using its venture arm to accelerate growth and adoption of NetWare and Novell Directory Services by third-party vendors.
The $530 million stock-swap will strengthen its position as one of the Internet's top advertising firms. DoubleClick Inc. agreed to acquire NetGravity Inc. in a $530 million stock-swap aimed at strengthening its position as one of the Internet's top advertising firms.
Buy.com in Deal With United Airlines
Buy.com is expanding its online store again, this time by forming a partnership with United Airlines. Under the agreement, announced today, United and Buy.com will jointly operate BuyTravel.com. Expected to launch later this year, the site will offer much the same inventory of airline tickets, hotel rooms, and travel packages as other travel sites.
Microsoft Seals Deal With E-Stamp
Microsoft took aim at the nascent Internet postage market today, saying it has designated E-Stamp as the postage-at-home application of its Office Update Web site. Privately held E-Stamp, in which Microsoft owns a minority share, makes one of two applications in the final stages of testing by the U.S. Postal Service. The other is offered by Stamps.com. The Office Update site includes software downloads for applications endorsed by Microsoft, but not included in the Windows software packages. The site also provides updates of other programs.
Intershop Courting New Channel Partners
E-commerce software maker Intershop is taking aim at a new set of VARs, most notably Internet community builders and application service providers (ASPs).
HP Inks E-Commerce Partnerships With i2, EAI
Hewlett-Packard is aiming to become an electronic-commerce market maker in the high-tech manufacturing field through partnerships with supply-chain software vendor i2 and Engineering Animation Inc. (EAI), which makes 3D visualization and collaboration software.
Onsale, Egghead.com Merging
Online auctioneer Onsale Inc. and online software retailer Egghead.com Inc. agreed to merge in a stock deal worth about $400 million. A total of .565 shares of Onsale will be exchanged for each Egghead.com share. Egghead shareholders will own about 47 percent of the combined company. Both companies' boards of directors have already approved the deal. The new company will be known as Egghead.com. However, in addition to computer product from Egghead, the company will also feature auctions and sales of surplus goods under the Onsale name.
CDNow to Merge With Columbia House
Backed by media giants Sony and Time Warner, music businesses CDNow and Columbia House agreed to merge in an effort to create a major entertainment, ecommerce, and direct marketing company. Under the deal, the new public company resulting from the merger will be owned 37 percent each by Sony and Time Warner, joint owners of Columbia House. CDNow's existing stockholders will own the remaining 26 percent, the companies said in a statement. Exact financial terms were not disclosed.
CDNow & Atlantic Records Team With Microsoft On Digital
The major record labels have already vowed to fight back against MP3 digital music compression. So it comes as no surprise that leading online music retailer, CDNow (Nasdaq: CDNW), and major record label, Atlantic Records, have paired up with Microsoft to offer secure promotional downloads comes as no surprise.
Amazon May Enter Online Software Market
Amazon.com will likely enter the online software market in the near future, industry analysts say, though probably not by means of a takeover. The Internet retail giant has lately been rumored to be acquiring both Onsale, a PC peripherals vendor and Beyond.com., an online software retailer. But while software sales fit the company's ever-expanding retail focus, Amazon seems better served by building its own software business, according to some Wall Street observers. A company spokesman dismissed reports, saying Amazon doesn't comment on speculation.
Online Grocer Webvan Raises $275M
Webvan Group Inc., which sells groceries over the Internet, has raised $275 million by selling a 6.48% stake to investors -- a transaction that values the closely held company at more than $4 billion. The deal comes less than two months after Webvan began selling groceries in its first market, the San Francisco Bay area. Even in the feverish climate of Internet-related financings, the deal is a blockbuster both in terms of the amount of money raised and the valuation placed on a company that isn't yet publicly traded.
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