E-business is often about transforming end-to-end business processes. This means eliminating costs, reducing handoffs, effectively using resources, and creating horizontal processes that are aligned with the value chain (defined later).
E-business, especially transformed e-business (see the later definition), forces some very interesting process issues. Thomas H. Davenport states in his work: "In definitional terms, a process is simply a structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies on how work is done within an organization?" He then continues: "A process approach to business also implies a relatively heavy emphasis on improving how work is done, in contrast to a focus on which specific products or services are delivered to customers."6
A business process approach is therefore a way of doing work that is necessary to add value for the customer and also all the links of the value chain. In the context of the Internet, business processes are taking two distinct perspectives: digital processes and traditional processes. As with anything else, there are mixed processes. A digital process is, for example, a Web-based ordering system that captures an order, authenticates the buyer, gets the customer profile, authenticates the payment, and places the order. A traditional process is the logistics part, where the order is physically delivered via mechanical means (e.g., a van). Again, nothing is a pure digital or a pure traditional process, but we are categorizing them as such at a conceptual level. In practice, the line is getting fuzzier every day.
The original BPR experts of 1015 years ago had a vision in the right direction; they were cutting down the number of handoffs between people and divisions and reducing the communications barriers. However, technology was not as pervasive as today; emails were still new, mobile and wireless technology were very immature, and communication was costly. So, they had to make some disruptive organizational changes and often did it with poor communication and change management in place. This caused resistance throughout the organization. BPR also became a fashionable "buzzword" at executive levels, and top executives promoted their own selfish agendas rather than what was good for the customers and their organizations as a whole. This did not happen because technical managers were unscrupulous or unethical, but because the "closed" technologies of the past created "closed" internal economies. There was a buy-in, both technically and economically, around a particular platform, and usually the investment in terms of both dollars and time was considerable. Very few managers, once making such a commitment, wanted to change paths with another technology, even if it could do a specific job better, without some kind of a fight. In addition, since these decisions were made by a select group of "insiders," there was little accountability once the decisions were made.
The Internet is a great equalizer. The primordial forces are at play here. An email cc'd and/or bc'd to the right people holds them accountable in ways never before possible. A simple cell phone can cut down on hours and days of miscommunicationthis can happen globally and literally instantly. Digital processes are changing work processes in a forceful, but nondisruptive way. The beauty of this streamlining is that it is not creating people resistance similar to what happened in the BPR era of the late 1980s and early 1990s. With open and effective communication, people (including upper management) cannot hide issues as much as they could previously.
So, the Internet has taken process transformations to a new level. However, the traditional processes and old handoff issues are still there. They have just taken on a new form. As shown in the previous example of Web ordering, the order taking, credit card verification, and payment transactions form the hyper-efficient digital process, but the order still needs to eventually be delivered via traditional processes. A perfect digital process can still reduce cycle times, but a handoff to a physical logistics part can still be broken. No matter how many orders for widgets are taken online, someone must still be notified to pack and send the boxes containing the order. Any bottleneck will lead to unacceptable delivery cycle times.
So, brick and mortar are not just going away. The new clich is "click in a brick." Digital processes will coexist with traditional processes. Successful Internet companies have opened or outsourced warehouses (and logistics) and have integrated the warehousing and logistics systems with their Web-enabled order processing systems.
The dot-com bust is pointing to one very important lesson we all have learned: All aspects of business, people, process, and technology are critical for the success of any business. E-businesses have great potential only in conjunction with time-tested principles, methods, processes, skills, and sound business practices. E-hype is over.