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At its core, e-business is a simple proposition. Businesses interact with customers through various channels such as retail stores, phone, print, television, instant messaging and ATMs. Leveraging interactive channels like Web can drive down costs, expand markets and create new revenue opportunities. For businesses that have mastered interactive channel, there is plenty of good news. The Web is faster and more economical than traditional business channels, and offers new ways to interact with customers. The Web also is most measurable medium ever, enabling savvy businesses to improve products, build customer relationships and identify new revenue opportunities. By numbers, e-business future looks especially promising:
According to research firm eMarketer, business-to-consumer (B2C) spending, a rare bright spot in current economic doldrums, is expected to top $126 billion by 2004. A B2C record of sorts was set during 2002 holiday season when shoppers spent more than $2 billion online in a single week.
B2C numbers are encouraging, but represent only a small fraction of business-to-business (B2B) e-commerce. eMarketer estimates that B2B spending will reach $2.4 trillion by 2004.
The growth of e-business is also expected to drive spending on interactive advertising to $63 billion by 2005, according to Forrester research.
These numbers may seem surprising to those who counted e-business out after well-publicized dotcom flameout and continuing tech-sector blues. But perhaps most surprising aspect is not how far e-business has come, but how far it may go. Neither B2C nor B2B transactions have reached even five percent of total transactions in their respective markets.
Obviously there’s ample opportunity for organizations who want to expand their businesses from traditional to interactive channels such as Web. In fact, many customers now expect to have option of choosing to transact business via Web or switch between channels as they please. But while goals of e-commerce are simple, achieving them is not. There’s no magic formula to ensure that businesses can profitably leverage Web to support and enhance other customers channels.
Technology-driven changes
The Web has fundamentally changed way business works. In less than 10 years, leading organizations have reinvented way they communicate, collaborate, buy, sell and create processes to take advantage of powerful and affordable Web technology. Technology also has spread from back office to every business unit throughout organization. Companies with more advanced technology strategies have leveraged Web-based tools such as portals and intranets to interact more effectively with customers, vendors and business partners.
And though advances in Internet, PC and network technologies have created unprecedented opportunities to control costs and improve business process, many companies are struggling to find ways to apply technology to business challenges. Though technology clearly will continue to be a key business driver and competitive advantage, many organizations have no strategic plan for its implementation. Surprisingly, many businesses continue to apply technology on a piecemeal basis, implementing various solutions around organization as needed. Without a comprehensive technology strategy, many businesses are unsure whether they are spending technology dollars wisely.
