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During the dot-com frenzy of the late 1990s, most large, traditional companies scrambled to find successful e-business strategies to fight off the aggressive new challengers. Unsure of how to proceed, many turned over their Internet efforts to the CIO and the information-technology organization. In most cases, that was a mistake. However, a few enlightened corporations have made the Internet work for them by assigning e-business efforts to senior-level executives who know the business side intimately — and by placing technology-focused CIOs in the role of partner. Someday all business will be e-business. That’s why it’s important even in an economic downturn for companies to integrate the new e-channel with their other business channels and resist the current temptation to toss Web projects into roomy IT budgets overseen by CIOs.
The new e-business leaders, whether coming from sales, marketing, branding, finance or other business functions, hold in common strong management skills and business insight. Most have little, if any, IT or Internet experience, and not surprisingly, tensions with CIOs often spring up. In the best organizations, a visionary CEO champions e-business over the long term and helps forge strong relationships, but in many cases it’s the e-business leader and the CIO themselves who recognize how much they need each other’s perspective.
How We Got Here
The short, chaotic history of e-business has already taught some useful lessons. For example, particularly in the period 1996 to 1998, many companies learned it’s best not to create a Web presence disconnected from their other channels. Barnes & Noble attempted to take on Amazon.com by splitting off barnesand-noble.com as a completely separate operation from its brick-and-mortar outlets, essentially eliminating its competitive advantage over Amazon: an additional channel with which to reach customers. The strategy bombed.
After the dot-com crash of 2000, CEOs in companies that had failed to create an effective Web presence breathed a sigh of relief. The absurd market capitalizations and attendant stock-option riches disappeared overnight. “Now we can return to business as usual,” many thought.
But the CEOs in our study were different. Having built their e-businesses on traditional business precepts, they rode out the highs and lows. They knew that multichannel shoppers spend more money in each channel than do single-channel shoppers, and they valued the Web as one more desirable channel and as a catalyst for dramatically changing the customer experience.
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