There can be few executives today who have not noticed the rush of interest in . com shares and e-commerce, but there are very few who really understand this area. Most know that they are not ready for this next revolution.
If you want to get a rough idea of the scale of revolution we are about to live through, and the impact on our lives, let me take you on a short, historical tour of the twentieth century.
Cars first began to appear about the beginning of the twentieth century and even in the fifties it was still very much the exception to own one per family; now we assume that most adults will have one.
When Queen Elizabeth II was crowned, it was only the prosperous that could watch it on TV. When man landed on the moon, in 1969 there was a major spread of TV. Now not only is there one in almost every home, but it is common to have 2-3.
25 years ago computers were the exclusive province of big businesses and the military. Even the president of IBM did not think they would spread further…
"I think there is a world market for maybe five computers."
Thomas Watson, Chairman of IBM, 1943
Even 10 years ago my boss, the FD of part of a major multinational company asked me why, as chief accountant of a site of 2000 people running an £80m pa business, I needed one! Now we have 5 in the house, and kids get them for Xmas.
Less than 10 years ago mobile phones were a yuppie luxury, 5 years ago high powered businessmen began to get them, now school kids own them. Last year 24m customers spent an average £20.23pm giving an industry total of £5.61bn, and more than one in two British adults will own a cellular phone by mid-2000.
So cars, TV’s, computers and mobile phones are all now essential parts of most peoples’ lives and businesses, and these skills and facilities are taken entirely for granted, both by employers and customers.
The dot-com revolution will be at least as big as any of these, and faster… much faster.
E-commerce will change how we do business, and for some it will redefine their business. However, for most, it will not alter the fundamentals, only the methodology; by which I mean we will still have to deliver goods and/or services, satisfy customers and make a profit. So it is a question of dealing with these changes imaginatively. Those with the greatest flexibility and creativity will reshape our business and social paradigms.
It is important to grasp that whilst technology is a key enabler, it is not the major challenge, change is.
How will you use this technology to redefine how you deliver better value to your customer, have better relationships with your suppliers, make more creative use of your staff?
Whilst the business-to-consumer market will be huge, as can be seen by the success of companies like Amazon.com, the really big bucks are to be made in the business-to-business arena, a market estimated at between $1-7 trillion pa (and that is a number of literally unimaginable proportions!)
WAP (Wireless Application Protocol) mobile phones are beginning to appear, and these will allow mobile web access. They will really come into their own when they move from the current 9,600 or 14,400 bps, which is pretty slow by comparison to what we are used to from our desktop computers which operate at nearer 50,000 bps to the new high speed GPRS modems that will be about 2 times faster than that!
Tony Blair has pledged to ensure everyone in Britain has web access within 5 years.
“I have pledged that by 2002, all schools will be connected. And what’s more, we will subsidise over 100,000 of our poorest families to get computers… We are setting up 800 IT learning centres to give access to IT.. I have already set as a goal that all government dealings that can be should be deliverable electronically by 2008.”
Tony Blair 13 Sep 99
Meantime, web access is now available at little or no cost via the increasing number of free ISPs (Internet Service Providers) and now they are competing to lower, or remove the telephone cost of staying online (see recent offers from NTL & Alta Vista). In addition Sky and cable companies are providing the ability to use digital TVs to get on-line
It is interesting to reflect how radical and bold Freeserve seemed when it launched in September 98, and now the market is awash with ‘me too’ free ISPs. That’s how fast things can change in this environment. In the future, the very near future, the successful companies will be those who are able to change and change, and keep reinventing themselves and refining their relationships with their customers.
So Britain is getting on line in greater and greater numbers. The challenge and opportunities are huge. Not a day seems to go by without news of another . com millionaire.
So what do you need to do?
Here are some questions you need to ask yourself:-
The answers to these very non-technical questions will help you begin to put in place your e-commerce strategy.
There are basically three levels of web presence:-
1. Information only: this covers the vast majority of sites and even though they have set their sights very low, just electronic sales brochures, most do it very poorly. This is largely because most failed to think through what they wanted to achieve.
2. Interactive: here there is some form of data collection, either overtly gathered via feedback forms or electronically gather via smart software
3. Trading: where goods and services are delivered and payment collected entirely electronically.
It is neither wise nor desirable to leap straight into the 3rd level. However, that is where the real rewards are to be won, and though it is not applicable to all businesses, the challenge is can you drive your business to that level?
It is important to recognise that for most the journey through these levels, and the opportunities that they represent is a voyage of exploration and should be embarked on in this spirit.
The key to success is to realise that this an area where the bold and imaginative will triumph. There are no unbreakable rules here and the skill is in deciding when to follow and when to lead.
What is called for is a whole new attitude in how we approach business. The young 24 year old may have more to offer in this environment than your seasoned campaigner, precisely because he (or she) does not know that ‘it can’t be done that way’.
How are you going to maintain team relationships in a world where it is possible to work with equal ease across the globe, where people don’t need to be in the office? How will you control and motivate your people? What will produce loyalty in this new environment? How do you make your customers feel valued and build relationships with them if they are just clicking on a web page?
Whilst there are some key ‘hard’ issues to be answered around technology, security etc, including ‘How do we deliver our goods?’ the key issues are these ‘softer’ ones.
You have much less time than you think. If you have already got a web site then you are ahead of the game, but by the end of the year this will surely be the norm, so what will you do then to stay ahead? You need to be thinking about it now, and actively working on it!
Richard is a dynamic, professional and thoughtful consultant with strong client focus. - MD, Destination Innovation
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