The Internet is revolutionizing the way companies conduct their business. Electronic collaboration with trading partners entails changes in corporate culture and requires a thoughtful development of an e-business strategy. Adopting a new business model is easy for a newly established company, which is inherently adapted to working with the Internet. However, in an existing enterprise that has established processes, practices, and scope of operations, it is not appropriate to carry out sudden changes that revolutionize the principles of its operation.
If the existing enterprise model undergoes a carefully planned evolutionary transformation, the chances of success are much higher. This process must include an assessment of every element of the business: customers, products, markets of operation, strategic goals, distribution channels, personnel, knowledge and key competencies, organizational processes, systems, and performance metrics, as well as the careful formulation of a strategic plan aimed at transforming the company’s operations into eBusiness.
E-business is the use of the Internet to take advantage of an easier and cheaper way to share information and collaborate effectively with suppliers, customers, and partners. It creates a highly integrated “virtual business,” meaning that the entire supply chain reacts faster to the rapidly changing needs of the consumer, who is increasingly demanding and less loyal.
Real e-business allows a company to move from mass marketing to marketing targeted at customer groups, which shapes an electronic “face-to-face” contact with each customer. This allows the customer to obtain necessary information and more attractive offers at the desired time. Having the tools and skills to manage and strengthen relationships with each customer is essential, especially when customers have easy access to competing companies. In short – e-business allows companies to expand existing interests into new markets and offer new services to new customers.
E-business also means significant cost reduction thanks to fully automated processes and the elimination of unnecessary manual procedures. The speed of connectivity means that e-business provides ways to promote offers, present goods, and provide information 24 hours a day. As the IT revolution gains momentum, entire new business models are emerging: those who survive will have to shed all the ballast of old habits and processes.
In the Polish reality, there is a lively discussion about e-business, but it often ends there. Companies are often willing to implement new ideas, but they wait for others. If they succeed, then why not. However, tomorrow it may turn out that it is already too late.
Market analysts agree that soon there will be no such concepts as e-business or e-commerce. They will simply disappear because there will be no other solution; there will be no other business. The question is not whether, but rather when? It may turn out that by delaying, an existing enterprise will be dominated not by a well-known competitor, but by a company that no one had heard of 24 months ago.
It is worth knowing the data regarding savings thanks to the implementation of eBusiness in a company. As “Forbes Global” reports, the management of General Electric believes that operating using the Internet will allow for a reduction of 20 to 50 percent in sales, general, and administrative costs. If the plan succeeds, the savings could even exceed half of the already impressive profits.
The CEO of GE is an enthusiast of new technologies. He believes that one cannot delay entering e-business with excuses about sales channel conflict or insufficient preparation of marketing and sales for the new operating model. Delaying may cause the company to lose the market, perhaps to a competitor it has not heard of before.
The head of the IT department at General Electric claims that the company’s policy regarding the Internet has three fundamental aspects: purchasing, where GE collaborates with its suppliers; sales, where GE conducts trade with customers; and production, where it performs its own operations using information technology. On the purchasing side, GE negotiates with many of its suppliers in reverse auctions organized on the Internet. Pre-qualified suppliers compete with each other to win GE as their customer. Through such organized auctions, GE obtains prices as low as it has never had before.
GE conducts about 4 million transactions annually. If each of them is carried out via the Internet, the transaction processing costs, amounting to 50 to 100 USD each, will drop to 5 USD. Thanks to the automation of all processes, GE will achieve cost reductions throughout the entire operating system. Handling a phone call from a customer, answering all their questions, costs about 5 USD today. Customer access to the same information via the Internet will cost only 20 cents. There are about 20 million such calls annually. At GE, there is talk of over 90 percent cost reduction. As you can see, winners create ventures based on the Internet, which they steer to maximize the opportunities created by new technologies.