EBusiness is not a fad

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At the peak of the tech bubble before March of 2000, IBM was advertising e-everything, putting a .com behind a business and having a web presence seemed an easy and ‘fashionable’ thing to do and a must have. EBusiness, with its fortunes closely linked to tech stocks that have bottomed out, was an unfortunate victim in a cycle of greed. (Kotler; “Marketing Management”, pg 35) I remember vividly the picture of Steve Case of AOL in a suit and the CEO of Timer Warner in casual attire, announcing a share buy-out on the cover of Time magazine.

Not everyone fared as well as Steve Case, buying Timer Warner’s solid assets with AOL’s own stratospherically overvalued stock. Most realized too late that the value of their tech stocks have plunged from dizzy heights to next to nothing. Along with that went the investor confidence in anything ‘E’, and a sensible return to fundamentals. The rest of the essay looks at why eBusiness is not just another passing management fad. And that it represents a set of practices that require significant forms of engagement by managers and their organizations.

Using post 45 Kai Lim’s definition of a fad, EBusiness is not a fad, is here to stay and continues to evolve. Firstly EBusiness is distinct from ECommerce, which is the conducting of business over the Internet with customers. EBusiness on the other hand is the web enabling of the business units in a company that allows it to conduct business over the Internet, which Anand concurs in post 69. This attempt at defining the differences between eCommerce and eBusiness serves to clarify doubts posted by Soon Koh in post 34. Examples of EBusiness applications include CRM, ERP and Supply Chain Management.

Far from being a fad, eBusiness continues to evolve along with the needs of businesses. While Jeff from post 3 speculates that eBusiness may exhibit faddish behavior but can be sustainable. I like to suggest that this would be the perception of investors who have been burned by the tech bubble and who swear never to threat in that area as Hassan in post 60 seems to agree with. The perception and the real benefits of eBusiness can be quite different. A good example is the IPO of Palm Computing in the spring of 2000, it reached $60 per share within a day, valuing the company at $54.3bn, which was $26.3bn more than its parent company, 3Com, which still owned 95 per cent of Palm stock (Cassidy, John 2002). As Andrew puts it in post 84, a companies’ stock was rewarded according to the perception investors had, to the extend which the company is seen to be tech driven in its operations. Palm was perceived by investors as a hot tech stock to make money out of, and not so much that it possessed any highly sophisticated EBusiness systems.

Model for Sustainability

In Kai Lim’s same post which brings out the ten rules of eBusiness and the use of technology as a strategic tool. They have evolved and are necessitated with a more competitive business climate. In agreement with Jason in post 50, these tools strategic as they are, are not sufficient by themselves. It’s the interaction between companies’ skills and its resources that has intrinsic strategic value (Schrage, 2003). Vincent in post 175 quipped along the same lines that E-business is only a fad to those companies who do not strategically align its technological acquisitions with that of its business and corporate strategies as well as its core competencies

As Beer and Nohria revealed, any kind of change is hard, and the change brought about by eBusiness is not an incremental change but a mix of both incremental and transformational new mindset change. As Abrahamson pointed out “….. companies should stop changing all the time. Instead they should intersperse major change initiatives among carefully paced periods of smaller, organic change using processes I call tinkering and kludging. …..”. In the Cutter Consortium report named eBusiness: Trends, Strategies, and Technologies, a groundbreaking survey ranked ‘benefits not demonstrated’ as the number-one eBusiness obstacle, followed by financial cost and technological immaturity (OIA, 1995).

Leaders are realising that another major eBusiness hurdle is not technology, but culture. Typically, sales people have been paranoid about losing their jobs to order-taking computers. At the start of eBusiness, some companies had to close their mail and printer rooms to force staff to use email instead or letters. Imagine how many large companies, like General Electric and Ford for instance, must spend on stamps each year! The promise of eBusiness is great, but limitations must be recognized. Many impediments stand in the way of progress in the adoption of web-based business models (Stephen and McGeary, 2002).

The main obstacles can be summarized as follows: ½ Lack of Internet culture – Customer resistance needs to be overcome by converting customers to the Internet culture through education; pointing out the advantages, benefits and processes required, to make eBusiness successful. Here governments should also take responsibility by introducing the Internet into all schools, and IT skills training, at an early age, into all national schools’ curricula Employees need to be seen in a new light – they need to be seen also as customers, as they are the ones who are employed to communicate with external customers, thus it is essential for companies to overcome any internal resistance to new eBusiness method adoption.

Lack of awareness of potential eBusiness benefits or ‘ benefits not demonstrated’ – In other words, it is difficult for most people, even for those within the IT industry, to keep up with the rapid speed of change, and developments of new technologies. Even at the best of times, people generally dislike change. If people don’t understand the benefits of new processes and technologies, then they will not readily adopt new methods no matter how much money a company has spent on them.

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