If there ever was a time when people were wowed by the fact that you had an e-business, it has long since passed. Today, business is business regardless of whether there is an “e” in front of your name. E-businesses, it seems, are now under the same kinds of constraints as traditional businesses: at the end of the day, you’ve got to make a profit.
Here is a checklist for what Gartner Group, Inc. calls, “The 10 E-business Imperatives for Success.” Check this against your business plan to see if your company is fulfilling all 10 attributes.
Our list is based on a presentation by and a discussion with Gartner Vice President and Research Director Al Lill during a Mastermind Keynote presentation at the 2000 U.S. Spring Symposium/ITxpo held in San Diego, CA.
1) Never plan further than 24 months out.
The most successful e-businesses focus on a 24-month window for strategic planning. Longer planning cycles make it difficult to budget, plan, or hire.
Businesses should also take pains to keep project lengths to 12 months or under. If you can’t get the project done in 12 months, it’s not worth doing.
Companies should also have checkmarks every 90 days. If you’re not on track during every 90-day increment, then you’re not meeting your goals.
2) Use separate strategies by industry, business unit, and geography.
Most large organizations are typically made up of multiple business units and business lines, with the pressures and opportunities varying for each depending on the industry that you’re in. While there are components of your e-business plan that can be standardized across the entire organization, there are many more that cannot. Take the time to tailor your e-business strategy to different components of your company.
Lill, for example, helps put together separate strategies by industry, sub-industry, company, and business unit when he works with companies on their e-business plans.
Beyond industry components, the geographic location of a company can also demand a separate strategy. For example, a strategy that might work well in the United States could fail in Northern Europe or Japan because of cultural or regulatory issues.
3) During your analysis, give equal weight to internal and external processes.
Traditional businesses generally find ways to cut costs by reducing inventory—an internal process—or by making efforts to reach new customers—an external process. However, it’s vital to look at both equally when embarking on your e-business effort.
Lill said some businesses, for example, become completely wrapped up in the fact that they have a Web site. Meanwhile, their greatest competitor has cut 20 to 30 points off their operating costs by taking both kinds of processes into account in their e-business.
4) Obtain total buy-in from your board.
If you’re putting together an e-business plan, make sure your board gives it—and you—its blessing.
The board’s enthusiasm (or lack thereof) will also determine how aggressively you pursue an e-business venture. If, for example, the board is concerned about your competitors and doesn’t want your project to hurt earnings per share, there may be greater limitations as to which companies you partner with.
5) Deliberately buy your e-business, spin it off, or transform your business model.
Once you’ve received total buy-in from your board (no. 4) you should let the entire corporation know whether your e-business plans will require you to completely transform your business, buy needed expertise through outsourcing or contracting, or spin off a portion of your operations to the Internet.
The first and third options make sense if your industry is following the trend of establishing an e-business presence during the next 24 months.
Also, if your industry favors a heavy presence on the Internet, it’s likely you would consider going in that direction, but make sure it is a company-wide effort.
6) Play by the “new” rules.
Establishing an e-business, as all of these imperatives suggest, requires a different approach—and a new set of rules—that doesn’t always apply to traditional business.
If there ever was an example of a business that didn’t follow this edict, it was ToysRUs. In 1998, the company began offering toys online. However, they decided not to sell everything they offered in their bricks-and-mortar stores and gave no discounts to people who shopped online.
Industry analysts, including Lill, considered the retailer’s venture to be half-hearted. For example, one of the “new” rules dictates that businesses find incentives that make consumers want to do business online.
7) Enhance or destroy your distribution channels based on their true power and value.
If your distribution channel needs to be changed to work with your e-business plan, assess the players before you try and change how it operates.
For example, you could run into problems if you have a distribution channel that adds little value to your operation but has the power to make or break you due to personal connections with your CEO or your ultimate buyer. In such a case, you must proceed with caution before making any changes.
In other situations, your distribution channel could have enormous value and no political ties to your company. If that is the case, you should work with your distributors to build your Web presence to support their operation.
If you don’t at least try and approach this, your competition will fulfill this imperative for you.
8) Terminate any weak link regardless of short-term “pain.”
If employees aren’t up to the task of implementing an e-business solution, reassign them or let them go. Companies should give those who are working on such projects clear expectations on their performance. If they don’t or can’t meet them, move them somewhere else.
9) Don’t try to control everything, but do try to heavily influence the marketplaces.
For example, if you are a large company with a strong consumer brand, you may try to control the industry on the e-marketplace as well. Don’t. Trying to completely dominate—as is the case in the bricks-and-mortar world—is nearly impossible and takes far too many resources.
If you are a small- or medium-size business, focus on your specialty amid your larger competitors. Say, for example, that you’re a small, profitable company that specializes in providing accounting services to small, local businesses. However, larger companies want to expand and have been eyeing your market. Since it’s difficult, if not impossible, for you to compete with a huge corporation, there are several things your business can do to meet this goal:
· Create your own Web site to establish an online presence.
· Emphasize your company’s skills.
· Encourage the encroaching company to do business with you and try to influence it as
much as you can.
10) Speed and ruthless execution are everything.
Once you and your company have committed to e-business, don’t hold back. While the other nine imperatives are vital, nothing will occur unless you act quickly and are prepared to follow through.
How do you rate?
After reading through Gartner’s list, how many imperatives does your business have in place? Here are some guidelines from TechRepublic to help you determine if your company is on the right track. If you have fulfilled:
· Seven or more imperatives, then you’re almost an e-business success story. Your business will become even stronger as you work to implement the last three attributes.
· Five or six imperatives, you’re on the right track but you’ll need to force some action if you want to excel. If you haven’t yet obtained no. 4 (total buy-in from your board), that may be the perfect place to start.
· Less than five imperatives, then your e-business effort could be in trouble. How committed is your enterprise to e-business? You might consider starting over if it’s not too late.
Here is a checklist for what Gartner Group, Inc. calls, “The 10 E-business Imperatives for Success.” Check this against your business plan to see if your company is fulfilling all 10 attributes.
Our list is based on a presentation by and a discussion with Gartner Vice President and Research Director Al Lill during a Mastermind Keynote presentation at the 2000 U.S. Spring Symposium/ITxpo held in San Diego, CA.
1) Never plan further than 24 months out.
The most successful e-businesses focus on a 24-month window for strategic planning. Longer planning cycles make it difficult to budget, plan, or hire.
Businesses should also take pains to keep project lengths to 12 months or under. If you can’t get the project done in 12 months, it’s not worth doing.
Companies should also have checkmarks every 90 days. If you’re not on track during every 90-day increment, then you’re not meeting your goals.
2) Use separate strategies by industry, business unit, and geography.
Most large organizations are typically made up of multiple business units and business lines, with the pressures and opportunities varying for each depending on the industry that you’re in. While there are components of your e-business plan that can be standardized across the entire organization, there are many more that cannot. Take the time to tailor your e-business strategy to different components of your company.
Lill, for example, helps put together separate strategies by industry, sub-industry, company, and business unit when he works with companies on their e-business plans.
Beyond industry components, the geographic location of a company can also demand a separate strategy. For example, a strategy that might work well in the United States could fail in Northern Europe or Japan because of cultural or regulatory issues.
3) During your analysis, give equal weight to internal and external processes.
Traditional businesses generally find ways to cut costs by reducing inventory—an internal process—or by making efforts to reach new customers—an external process. However, it’s vital to look at both equally when embarking on your e-business effort.
Lill said some businesses, for example, become completely wrapped up in the fact that they have a Web site. Meanwhile, their greatest competitor has cut 20 to 30 points off their operating costs by taking both kinds of processes into account in their e-business.
4) Obtain total buy-in from your board.
If you’re putting together an e-business plan, make sure your board gives it—and you—its blessing.
The board’s enthusiasm (or lack thereof) will also determine how aggressively you pursue an e-business venture. If, for example, the board is concerned about your competitors and doesn’t want your project to hurt earnings per share, there may be greater limitations as to which companies you partner with.
5) Deliberately buy your e-business, spin it off, or transform your business model.
Once you’ve received total buy-in from your board (no. 4) you should let the entire corporation know whether your e-business plans will require you to completely transform your business, buy needed expertise through outsourcing or contracting, or spin off a portion of your operations to the Internet.
The first and third options make sense if your industry is following the trend of establishing an e-business presence during the next 24 months.
Also, if your industry favors a heavy presence on the Internet, it’s likely you would consider going in that direction, but make sure it is a company-wide effort.
6) Play by the “new” rules.
Establishing an e-business, as all of these imperatives suggest, requires a different approach—and a new set of rules—that doesn’t always apply to traditional business.
If there ever was an example of a business that didn’t follow this edict, it was ToysRUs. In 1998, the company began offering toys online. However, they decided not to sell everything they offered in their bricks-and-mortar stores and gave no discounts to people who shopped online.
Industry analysts, including Lill, considered the retailer’s venture to be half-hearted. For example, one of the “new” rules dictates that businesses find incentives that make consumers want to do business online.
7) Enhance or destroy your distribution channels based on their true power and value.
If your distribution channel needs to be changed to work with your e-business plan, assess the players before you try and change how it operates.
For example, you could run into problems if you have a distribution channel that adds little value to your operation but has the power to make or break you due to personal connections with your CEO or your ultimate buyer. In such a case, you must proceed with caution before making any changes.
In other situations, your distribution channel could have enormous value and no political ties to your company. If that is the case, you should work with your distributors to build your Web presence to support their operation.
If you don’t at least try and approach this, your competition will fulfill this imperative for you.
8) Terminate any weak link regardless of short-term “pain.”
If employees aren’t up to the task of implementing an e-business solution, reassign them or let them go. Companies should give those who are working on such projects clear expectations on their performance. If they don’t or can’t meet them, move them somewhere else.
9) Don’t try to control everything, but do try to heavily influence the marketplaces.
For example, if you are a large company with a strong consumer brand, you may try to control the industry on the e-marketplace as well. Don’t. Trying to completely dominate—as is the case in the bricks-and-mortar world—is nearly impossible and takes far too many resources.
If you are a small- or medium-size business, focus on your specialty amid your larger competitors. Say, for example, that you’re a small, profitable company that specializes in providing accounting services to small, local businesses. However, larger companies want to expand and have been eyeing your market. Since it’s difficult, if not impossible, for you to compete with a huge corporation, there are several things your business can do to meet this goal:
· Create your own Web site to establish an online presence.
· Emphasize your company’s skills.
· Encourage the encroaching company to do business with you and try to influence it as
much as you can.
10) Speed and ruthless execution are everything.
Once you and your company have committed to e-business, don’t hold back. While the other nine imperatives are vital, nothing will occur unless you act quickly and are prepared to follow through.
How do you rate?
After reading through Gartner’s list, how many imperatives does your business have in place? Here are some guidelines from TechRepublic to help you determine if your company is on the right track. If you have fulfilled:
· Seven or more imperatives, then you’re almost an e-business success story. Your business will become even stronger as you work to implement the last three attributes.
· Five or six imperatives, you’re on the right track but you’ll need to force some action if you want to excel. If you haven’t yet obtained no. 4 (total buy-in from your board), that may be the perfect place to start.
· Less than five imperatives, then your e-business effort could be in trouble. How committed is your enterprise to e-business? You might consider starting over if it’s not too late.