Electronic Commerce in the Web-Empowered Enterprise
With the evolution of the Internet into a universally accessible total
Business-communications network, we are witnessing an event more powerful than any since the invention of the telephone. This reflects the broad scope and deep influence that the Internet will have on the way we manage our businesses, present ourselves to customers, interface with our trading partners, and relate to our employees. Designing an Electronic Business involves the total remaking of the enterprise as the Internet pervades its every form and function. And it then involves the total transformation of the way that we conduct trade. As we will demonstrate in this chapter, there is plenty of evidence that the change has begun. In mid-1997, United Parcel Service (UPS) claimed to have implemented the largest business-to-business electronic commerce application to date. The company converted to electronic management its 60,000 vendors who collectively generate 7 million invoices annually. By October 1997, General Electric's Internet-based procurement system had been used to purchase more than $1 billion worth of goods and supplies. During that same year, three companies, Cisco, Dell, and General Electric were responsible for $3 billion worth of Internet-based electronic trade. In mid-1998, whole industries were creating electronic-trading communities, extending access to networks and services across the boundaries of competing companies. The Automotive Industry Action Group (AIAG) plans to link the big three U.S. automakers with their suppliers, dealers, and other participants in the supply chain through the Automotive Network Exchange (ANX). This Extranet is expected to result in cost savings of over $1 billion annually when all levels of suppliers in the industry are connected. Its most dramatic effect, however, may be its ability to facilitate cooperation between competitors in a way that has not been achieved before. Web-Empowering People and Processes The term "electronic commerce" (e-commerce) is used to describe the automation of the processes by which we conduct trade. The challenges of e-commerce are many. Although it itself is not new, eCommerce on the Internet (ECI) is uncharted territory. Its commercial users are its pioneers. This is not a role that most companies relish. Business executives are faced with a choice; begin to embrace the Internet now and risk its uncertainty, or wait until its impact is proven. We support starting now We believe that any enterprise that plans to remain commercially competitive in the first decade of the next millennium must become Web-empowered. This requires the strategic integration of the Web into the business process at every place in the enterprise where the Internet can touch it. "The corporation must become Web-Centric," says Steven Ward, Chief Information Office of International Business Machines (IBM), who is in charge of the mammoth task of converting IBM into an electronic business. "You need to have faith. You must make a business decision that anything you do from now on will be Web-Centric."' The irony is that the Internet was not built for the job. It was not designed for commerce, but for free and easy communications between academics and researchers. Now, we are asking it to facilitate a business revolution. The question is whether it is up to the task. This chapter will investigate the opportunities and the pitfalls of e-commerce. It will conclude that it is not the Internet Network per se that is important, but rather the technical standards and business practices that will be built upon it. The vision is one of the globe cocooned in a virtual blanket of networks of many different types and technologies, linked together by a robust set of standards that will be the heritage of the Internet and the World Wide Web. It is this set of technical standards and business practices that, if truly standardized and adopted worldwide, will provide the glue to hold electronic business together.
HBR's 10 Must Reads 2023: The Definitive Management Ideas of the Year from Harvard Business Review (with bonus article "Persuading the Unpersuadable" By Adam Grant)