Over the past decade, Internet and Web technologies have remade the business world. E-business has dramatically changed how companies’ business processes are implemented and enhanced, altered industry structures, and shifted the balance of power between corporations and their suppliers and customers (both downstream partners and consumers).

Companies in every industry have had to evaluate the opportunities and threats presented by e-business. Although many “pure-play” or “born-on-the-Web” organizations have come into being, the economy still consists mostly of companies that were created well before the advent of e-business. For large and mature corporations, responding to these trends has been difficult. Even so, most e-business research has focused on new companies. From our academic research and work with various established, global corporations, we have developed a planning process that puts e-business into perspective and helps make it manageable. (See “About the Research.”)

The E-Business Planning Process

Four major steps make up the planning phase for new e-business projects using existing products and services, processes and markets: (1) Identify potential e-business initiatives, (2) Analyze the functional scope of e-business initiatives, (3) Analyze the sustainability of benefits from e-business initiatives and (4) Prioritize e-business initiatives.

In addition to the planning phase, the e-business development process also includes phases for feasibility analysis, implementation, testing, deployment and performance review. The overall process can be set within a development life cycle spanning all these phases. In this article, we focus on the four planning steps, since the later phases are well supported by established methods for information system development.1

Identify Potential E-Business Initiatives

Companies can gain two fundamental types of benefits from e-business: first, value creation or value enhancement for one or more of a company’s stakeholder groups; and second, lower costs of providing goods and services to the marketplace.

Adding value through e-business.

Customers are a driving force for value creation. (See “The Contexts of E-Business Initiatives.”) Managers can use customer needs to identify opportunities for leveraging e-business to enhance the company’s customer value proposition and to help define specific market segments with distinct priorities. Furthermore, the concerns of distinct functional groups within customer segments may drive different e-business initiatives. For instance, while research and development scientists within a downstream business-to-business customer may value solutions for product development, the customer’s production workers may seek know-how for using the company’s products in making their own products, while the customer’s supply personnel may care primarily about efficient, flexible and responsive order