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THE E-BUSINESS EFFECT

The e-business model will emerge as the new model for doing business (see Figure 10.5). This will represent a major shift in how global trade is conducted and will clearly force new economic models to emerge. Buyers and sellers will reengineer their core business processes to adapt to the new e-business economy.

Perhaps the most significant area that will act as a catalyst to online trade will be the supply chains that link trading partners as they develop and distribute products. Each industry will have varying rates of adoption. How quickly industries enable e-business in their respective markets will depend on the level of sophistication of the their current IT environments, their agility and their core skills, and their use of new e-business technologies and e-commerce applications and platforms.

Figure 10.5 An example of the business transformation that can occur, depending on the industry segment and specific e-business objectives.

Some examples of early adopters of e-commerce representing various industries would include L.L. Bean, Boeing Aerospace, Moore Business Products, Cisco, Citibank, Schwab, IBM, Intuit, and Microsoft. Consider IBM, which began reengi-neering core business processes as early as 1993, gradually moving toward becoming an e-business company that offers many services (see Figure 10.6). No longer would the "big blue" company image make tremendous sense.

Companies like IBM began with their human resource and financial systems and moved rapidly to integrate e-business technologies into their supply chain; they ultimately have successfully linked their suppliers and business partners into their legacy systems. The results of these initiatives are nothing short of spectacular: hence the term e-business. For example, e-procurement e-business solutions have resulted in a tremendous savings for many global corporate enterprises. This area of business is often a starting point for many e-business transformations. The time it takes to process and fulfill purchase orders has dramatically been reduced, from days to minutes.

In the supply chain area, IBM has significantly improved its order-processing cycle-time, thereby dramatically improving customer satisfaction numbers. Now IBM has achieved an overall savings of about $1.7 billion annually. Cisco was able to double its annual revenues from $2 billion to $4 billion, in part by using e-business technologies. Cisco, with its many router products, is also considered by stock analysts to be a main infrastructure provider to the Internet industry. IBM is a main provider to the Internet industries, with its innovative leadership in "e-business" and its diversified set of platforms that support and interact with the Internet in almost any way one could imagine.

Figure 10.6 The e-business transformation enterprise needs to consider the various levels of e-commerce.

Both IBM and Xerox Palo Alto Research Center (PARC) spend vast amounts of money on research. It was PARC that in 1993 first began to research ubiquitous computing. The Internet, at this early stage, was merely a topic being carefully introduced by the ARPA development team. Many creative scientists have contributed to this e-commerce playing field over the years. Such individuals are key to the overall success and direction of both Internet and Internet/2 practices; the future set of e-commerce technologies.

Schwab created a whole new way of trading stocks and other securities using e-business technologies to enable online trading capabilities for its customers. Schwab grew rapidly from day 1, gaining more than 100,000 customers; in just three months, Schwab found itself serving 1.5 million clients. There are many other excellent e-business trading companies on the Internet; Schwab is merely one example. TradingDirect, E*Trade, and many more e-business sites are definitely worth investigating for those interested in placing closer (more personal) controls on their investments. Some trading sites like E*Trade offer after-hours trading capabilities for the convenience of its customer base. These "benefits" are attractive to the casual Internet end user.

Safeway, the grocery store chain, offers still another example of an enterprise achieving new innovative business values through the integration of e-business technologies. Safeway currently manages point-of-sale profile data on 6 million customers, helping the company to determine which stock items to maintain on their shelves to meet customer demands. Safeway is not the only supermarket performing this. NCR (National Cash Register, Co.) is working on home-based virtual shopping. Chase Manhattan Bank delivered significant business values by using e-business technologies to develop a big picture view of its customers, greatly enhancing its customer relationship management capabilities and online banking facilities.

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