Most corporate executives are convinced by now that the scale and pervasiveness of today’s technological change require a fundamental review of business strategy. Web-based technology —through the Internet, intranets and extranets — offers universal connectivity at astonishingly low cost, with a simple, standardized user interface. The new technology is creating opportunities to rethink business models, processes and relationships along the whole length of the supply chain in pursuit of unprecedented levels of productivity, improved customer propositions and new streams of business.
But the scope of the potential for change is daunting. The burgeoning e-business literature bombards executives with ideas competing for their attention. It is hard to make collective sense of it all or to know where to start the strategic analysis. Moreover, e-business ideas are described in unfamiliar terminology — “portals,” “infomediaries” and “aggregators” in “B2C/B2B/BTE” settings. Behind the new language, how new are the strategic concepts? To what extent are the old dogs of the established economy required to learn new tricks?
The success of Amazon.com, Dell Computer, eBay and others served as a wake-up call for many executives. But companies in, say, chemicals, helicopters or credit-card services are likely to find their strategic opportunity taking a different form.
A first step in confronting the challenges is to construct a coherent map of the e-opportunity. With the mood swings of the financial markets and the faltering fortunes of New Economy icons, the business community at large still feels uncertainty about the future shape and scope of e-business. A comprehensive map of the e-opportunity and its three domains (operations, marketing and customer services) can become a platform for exploring the new strategic landscape. In each domain, the technology can enable a radical new vision of what a business can accomplish. (See “The Domains of E-Opportunity.”)
The Domains of E-Opportunity
E-operations opportunities are uses of Web technology that are directed at strategic change in the way a business manages itself and its supply chain, culminating in the production of its core product or service. For example, technology underpins BP Amoco’s initiatives to troubleshoot more effectively by sharing the learning of its businesses around the world. General Electric Co. improved its purchasing by posting requirements on a Web site and having suppliers submit bids electronically.