by Mohan Sawhney and Jeff Zabin
Review by Madanmohan Rao...
With a foreword by Dan Tapscott (author of “Digital Capital” and “Growing Up Digital”), this concise e-business guidebook is just what serious readers need in the “post-dotcom era” to sift through the confusing views and assessments of e-business out there.
Mohan Sawhney, e-commerce professor at the Kellogg Graduate School of Management in Northwestern University, is a prolific writer and speaker and serves on the boards of several startups; he was a keynote speaker at the India Internet World 2000 conference... Jeff Zabin is a writer and research fellow with strategy firm Diamond Cluster International in Evanston, Illinois.
The book also has an online companion... Referenced books include Leading the Revolution (by Gary Hamel), Intellectual Capital (Thomas Stewart), MetaCapitalism (Grady Means), ValueNets (David Bovet), and Enterprise E-Commerce (Peter Fingar).
The focus of the book by Sawhney and Zabin is more on the traditional old-economy “smokestack” industries than established technology players like Cisco and Dell. It is chock-full of case studies and anecdotes of successes as well as failures in e-business ventures of corporate America.
One chapter each is devoted to the seven steps which businesses must take in order to maximize e-business potential: broaden company and industry vision, chart incremental moves down the e-business evolution path, devise clever e-strategy, synchronise channels and internal departments, gear up e-infrastructure platforms, judiciously allocate financial resources and investments, and rally employees and partners around the e-business banner.
In retrospect, it might be said that the new economy was the best thing to have happened to the old economy, according to the authors, especially the shining examples they set for speed, innovation and pure adrenaline flow. “Unlike anything before it, the massive wave of entrepreneurial startups energized Corporate America to change,” they observe.
E-business can play a key role in four ways: cost reduction, revenue expansion, time reduction, and relationship enhancement. E-business plays not just to the bottom line but also to the top line, where it can lead to the transformation and reinvention of entire industries.
Companies like United Technologies and Eastman streamline purchasing via e-procurement. Citibank leverages CRM for online initiatives, and Proctor&Gamble uses Web sites to improve information services quality for its products like Tide, Crest and Vick’s. Xerox harnesses the Web to lubricate its relationships with its numerous resellers. Consultancy firms and Fortune 500 innovators like GE use Intranet-based knowledge management systems to capture, codify and recycle the learnings gleaned from every project and every employee.
One of the key impacts of the Internet, Intranet and Extranet is to break down traditional barriers within the company between its departments, geographical units and employees, and on the outside to connect the company seamlessly with its customers, suppliers, distributors and business partners.
Companies have taken different approaches to achieve this synchronous state: for instance, Wal-Mart has named its online venture WalMart.com and opted for deep synchronization and integration, whereas K-Mart has called its online venture BlueLight.com which is synchronized at a selective level and is aimed at new customers with new offerings.
The Net has multiple effects on channels and brands: channel augmentation (eg. direct selling by Cisco and Dell), brand augmentation (eg. Web sites of Ragu sauce and Crest toothpaste), channel proliferation (eg. book sales), and channel deconstruction (eg. Travelocity and Expedia).
The vendor landscape – which is experiencing rapid convergence -- includes players in MRO procurement (Ariba, CommerceOne), SCM (i2, Manugistics), collaborative design (Agile, NexPrise), content and catalogue management (Vignette), configurators (Trilogy), integrated marketplaces (Ariba, CommerceOne, Oracle, VerticalNet), direct sales (BroadVision, Intershop, OpenMarket), logistics (i2, Yantra, GoCargo), payment (Verisign, iEscrow), CRM (Siebel, Kana) and customer analytics (E.piphany, Cognos).
“Despite the unbridled enthusiasm for the Net as a channel for direct selling to customers that besets many companies, the fact remains that most selling still takes place through partners,” according to Sawhney and Zabin.
The future, according to the authors, lies in collaborative commerce via component-based architectures (as with HP’s e-Speak and Microsoft’s BizTalk) – eventually creating ‘business operating systems’ for entire industries, such as Covisint in the automobile industry, Exostar for aerospace, Transora for consumer packaged goods, and Elemica for chemicals.
Due to a combination of fear and greed, many established players may have swung off course for some time on the investment front: such as Starbucks (which invested in Living.com, Kozmo.com, Cooking.com and TalkCity – but has re-focused now) and Nordstrom (which took a $20 million loss on Streamline.com).
By investing in other start-ups, companies can gain access to “windows into the future, borrowing eyes and ideas from innovative entrepreneurs.” Examples include Kraft Foods, which gained valuable learnings (if not earnings) about online impacts on grocery shopping via tie-ups with Webvan, NetGrocer, Peapod, Food.com and EthnicGrocer.com. Accenture Technology Ventures has invested in Asera, Jamcracker, Rivio and MarketSwitch.
CEOs, CIOs and heads of operating units within a company have a key role to play in catalyzing, motivating, skilling and externalizing of e-business vision and capability. Notable leaders in this regard have included GE CEO Jack Welch, Boeing CEO Phil Condit, Eastman CEO Ernest Davenport, and McDonald’s CEO Jack Greenberg.
The ultimate compass in the e-business journey, the authors conclude, has to be nothing other than the customer value proposition...
I consider my best book about e-business.