Succeeding In E-business Begins With An Effective Strategy

Who would have thought the Internet would transform the business world as it has today? When the RAND Corporation - established to research national security and public welfare - began research on distributed communications networks for military control and command in the 60s, the door to the Internet creaked open. Now, it has been blown off its hinges to bring us a means to not only find information but also communicate with friends, reach global customers and markets, promote business, develop new revenue models, and create economies of scale – just to name a few. What is particularly exciting is that there is no end in sight for the Internet. Every day new applications are developed that bring new opportunities – whether you are a vendor, bank, E-business, retail store, manufacturer, or customer, there are benefits. The age of the Internet has arrived.

Along with enormous opportunities created by the Internet is the temptation to exploit them as rapidly as possible. But, those who choose to change their business to utilize the benefits of the Internet and new technologies should be aware that they are working within a whole new realm of rules, where expectations are increased – time frames are reduced, customer service has no boundaries and immediate fulfillment is expected. As a result, to succeed in this electronic environment, a solid strategy is required. Otherwise, your efforts can backfire and seriously hurt your business.

An E-business strategy is an in-depth analysis of how technology can be implemented within a company to help reach its business goals and objectives. The strategy is business-driven first and then examines how technology can be used for goal achievement. A good strategy is a guideline for your business growth – it forces you to look at ways to streamline your business, examine how to foster relationships between customers, suppliers and employees, determine where your strengths and weaknesses lie, identify barriers to development, and minimize E-business risk. The strategy development process also provides opportunity to evaluate the marketplace, identify new trends that can be applied to your business, and open your eyes to the competition.

The challenge is to create an E-business strategy that works for your business. Understanding how to develop it is half the challenge. A strategy building approach that enables you to carry out the analysis in a structured way will alleviate the challenge and put you on the right path.

Step One: Review your Business Objectives

What is it you want your business to accomplish over the next six months or year? Effective objectives are measurable and provide time lines for delivery.

• As a retailer, one objective may be, “To improve customer satisfaction by 10 percent by January 2003.”
• As a manufacturer, an objective may be, “To increase product output by 2 percent within 10 months.”

As you develop your E-business strategy always consider your business objectives first.

Step Two: Identify your Critical Success Factors

Critical success factors are business activities crucial to your company’s success. For instance, if you own a retail business, a critical success factor may be your ability to provide high quality products. If you attract customers by selling high quality products and have created a brand that promotes this characteristic, then delivering products that do not meet the quality standards of customers can be detrimental to your business. If you own a manufacturing company, a critical success factor may be your ability to deliver products within 48 hours to other suppliers in the supply chain. If delivery is not met within the 48-hour time frame, the ability of the other suppliers to meet market demand may be affected, which can create discord in the chain and ultimately affect your success.

Step Three: Conduct a Situation Analysis

The purpose of a situation analysis is to determine your internal strengths and weaknesses, and identify opportunities and threats in the external market-it is often referred to as a SWOT (strengths, weaknesses, opportunities, threats) Analysis.

When conducting a situation analysis it is important to focus on questions that are relevant to your business objectives and critical success factors. For instance, if you are a retailer with a goal to improve customer satisfaction, and product quality is a critical success factor, it may be important for you to analyze how your budget is distributed for product development, and to examine whether there are problems with your manufacturers. If you are a manufacturer with a goal to improve product output, and you have trouble delivering within 48 hours it may be necessary to focus on identifying bottlenecks in your manufacturing processes.

When you conduct an internal analysis of your company, consider such factors as business processes, technology infrastructure, revenue stream, marketing functions and the ability of employees to accept change. Some questions to ask include the following:

When you conduct an external analysis, consider such factors as customers, partners and suppliers, trends in the market, competition, and legal/regulatory issues.

Step Four – Analyze the Gaps

Some businesses make the mistake of implementing technology without long-term planning and in the process quickly lose sight of their business objectives. The organization becomes technology-driven rather than business-driven, often resulting in lack of support from within the organization and inefficient budget spending.

Once a situation analysis is conducted, it is necessary to identify whether your problems can be solved with the implementation of technology. In other words, will implementing technology help you to reach your objectives and ensure you meet your critical success factors?

For example, perhaps you have an objective to increase your market share by 2 percent over the next year and the situation analysis has helped you identify demand for your product in a new region. Can your current marketing campaigns reach customers in these regions? Can your distribution channels be expanded to these areas? If not, then developing a web site to reach this new customer base may be an option for you.

Step Five: Set your Technology Objectives

Once it is determined where new technologies can be used to make your company stronger, it is important to identify and write down your technology objectives. For instance, if an E-commerce site is necessary for your company’s future growth and success, what will be the objectives of the web site? To develop your objectives, consider why you are implementing the web site in the first place.

Examples of objectives for a new web site may include:

• To increase revenue by 30 percent this time next year.
• To increase customer satisfaction and loyalty to reduce customer turnover by 30 percent by January 2003.
• To reduce operating costs by 10 percent in the next year.
• To increase brand recognition by 30 percent in the next year.

Step Six: Identify Project Tasks / Project Readiness Assessment

Implementing change of any kind within an organization is an expensive and time- consuming task - there is often re-organization within the company, skills gaps, and employee resistance. Therefore, to ensure you effectively utilize time and resources appropriately, and ensure smooth implementation, it is necessary to identify tasks associated with development of each technology project.

In the case of developing an E-commerce site, the following tasks may be considered:

• Develop back-end infrastructure
• Configure Web server
• Develop product database
• Create customer relationship management (CRM) system
• Integrate site with legacy systems
• Develop Internet marketing plan
• Develop site look and feel
• Develop creative
• Write content
• Identify ISP/Hosting Company
• Train employees

Once tasks for each technology project are identified, it is helpful to break these tasks down further into specific activities and requirements. This process will assist in determining budget, time and resources to complete the project.

For example, developing the back-end infrastructure of an E-commerce site will require an individual with high-level technical capabilities and programming skills. Do you have skills within your company to develop the back–end infrastructure of an E-commerce site? If you don’t have a specific skills set within your company for site development, it may be necessary to outsource or hire a new employee. If so, is there room in the budget to do this? How much time will this take?

To develop an Internet marketing plan requires someone with knowledge of the company, its goals and customers. Is there a person within the company to develop an Internet marketing plan or is an outside consultant necessary?

Other questions may include:

• Do you have the capability to host your own site?
• Do you need to buy computers or other technology?
• How much support do you have within your organization?
• Are executive and middle management supportive of the initiative?
• Are your suppliers supportive of the project?
• Will employees need training? How will you train them?

Outlining the activities and requirements of each task enables you to effectively plan ahead and manage your time and resources appropriately, ensuring a greater chance for project success.

Step Seven: Design/Develop/Deploy

Once you have identified the tasks, activities and requirements for your project, you should have a good idea of what is involved in the design, development and deployment phases. For development of an E-commerce site, the design phase may include, among other things, developing the site map and user-interface, which define navigation of the site and how it will look. The development phase will involve programming and coding the site, and developing its ‘look and feel’ including creating and editing content, multimedia files, images, and graphics. The deployment phase may include testing the site, eliminating bugs in the system, promoting the site and conducting internal training with management and staff.

The most important consideration in these phases is to allow flexibility to enable new ideas and concepts to flow. At the same time, minimum quality standards should be maintained. It’s also important to ensure suppliers, partners and management are able to contribute to these phases and participate in the decision-making process.

Step Eight: Monitor/Evaluate

The monitoring and evaluation step requires that you measure how well the technology solution has enabled you to meet both your technology and business objectives. To determine the effectiveness of your solution, collect feedback from all stakeholders, including partners, clients, suppliers, management and staff. For example: Are your customers finding it easy to navigate the site? How much down time have you had? Are your suppliers able to meet delivery? How well does your new solution support your current business processes?

-----

There is no doubt that businesses will continue to utilize new technologies to improve their functionality and remain competitive in the marketplace. The companies that are successful will be those that take a step-by-step approach to the implementation of technology, taking time to develop a strategy that considers immediate needs, resource allocation and budgetary allowances.

The strategy building process is a time consuming task. But, it forces businesses to carefully examine their internal processes and identify the effects of the external environment on them. As a result, the long-term benefits of building a strategy far outweigh the time and energy it takes to development one, which once completed, is a blueprint for future growth. What is most important is that the strategy remains flexible to accommodate change within an organization, has full support from all levels of a company and is driven by the goals of the business. By following a strategy building process with these thoughts in mind, long-term success is only steps away.