E-Business Goes Global, And You Better Keep Pace - Twice

E-Business Goes Global, And You Better Keep Pace

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Whether you're a retailer or manufacturer, no company can afford to sit on the sidelines as e-business takes off in the global digital economy.

If your company only accommodates the national marketplace, you're working at 50 percent of your potential. More than half of today's Web users reside outside of the United States. That's a hefty chunk of change you're sacrificing each day your business keeps its doors closed to the worldwide market.

In the next decade, the new economy will see exciting business opportunities generated by the e-business model. One example of an emerging model is e2open, a global computer, electronics and telecommunications b-to-b e-marketplace founded by an industry consortium that includes Acer, Hitachi, IBM, LG Electronics, Lucent, Matsushita/ Panasonic, Nortel, PartMiner, Seagate Technology, Solectron and Toshiba.

e2open.com's electronic marketplace has the potential to bring together thousands of computer, electronics and telecommunications companies of all sizes worldwide to plan, manage and execute supply-chain transactions over the Internet. Today, these companies account for approximately $700 billion of goods and services bought and sold in the worldwide electronics industry's supply chain.

For buyers, benefits will include reduced infrastructure costs, reduction of unauthorized buying, lower working capital requirements through lower inventory, and transportation and logistics efficiencies. For sellers, benefits will include enhanced ability to service smaller customers, direct access to customers, lower customer acquisition costs, increased access to global trading partners, and reduced transaction handling and processing costs.

But before you decide to accept pesos on your secure server or to buy the latest, greatest translation software, you'll need to prepare your business for the rest of the world. Language and cultural barriers, currency conversions, local tax rules and shipping hassles are only a few of the obstacles e-businesses face when entering the global marketplace.

There will be no easy answers or silver bullets for the many technical challenges and cultural uncertainties wrought by global e-business, and managers will continue to find it to be a source of frustration and problems. So how do managers and companies prepare themselves for the fast-paced global marketplace of tomorrow?

First, your topmost management needs to know how global e-business fits in your overall business model. Since the costs of computers and telecommunications now amount to nearly half of most organizations' annual capital expenditures, the most effective managers for the 21st-century economy will be competent and comfortable in handling information technology and global e-business decisions. They'll put both high on the priority list.

Second, consider the following criteria that drive success in becoming a global e-business and in competing in the new economy:

  1. Speed-of-light innovation, execution and operations.
  2. Vision-driven transformation.
  3. Integration of e-business strategy and business strategy.
  4. Breadth of value-chain analysis in opportunity identification.
  5. Targeting value and growth, in addition to operational excellence, as key areas.
  6. Top- level executive commitment and involvement.
  7. Development of a formal e-business management systems framework.
  8. Integration of business process and information technology.
  9. Prioritization and funding of initiatives based on value to the business.
  10. Continuous measurement of results of e-business initiatives, with fast action on the information.
  11. Talent acquisition and retention.

Of the four possible approaches to e-business-laggard, pace keeper, leader and leaper-neither lagging behind nor settling for parity has ever been acceptable. Now, even being a leader is not good enough. It's necessary to quietly leap beyond the competition before it realizes what's happening.

To that end, leading a company into the digital economy requires three components:

  • A business strategy including a set of dynamic, integrated decisions encompassing production, finance, marketing and R & D that positions a company in its marketplace.
  • An IT strategy that supports business objectives and propels the company past the competition in serving customer needs, while meeting regulatory requirements and providing a return to stakeholders.
  • And a global digital business.com strategy integrating management and e-business decisions to create stealth competitive advantages.

What emerges is a stealth company that is not easily visible initially as it gains first-mover advantage. Such a company will have an unconventional structure, integrate components in the value chain, have virtually no overhead, thrive on innovation and undertake risky projects.

Your success depends on developing your own flexible strategy that can adjust to the shape-shifting nature of the worldwide market. The global economy is not a fixed idea, but a fast-evolving body. It's a journey, not a destination. Your job is to guide your organization through that journey.

Tim R. Wroblewski is an e-business principal at IBM's Global Services/Business Innovation Services group and the author of a new book, "Global Digital Business.com." He can be reached at www.globaldigitalbusiness.com or twroble@us.ibm.com.

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