Designing fashion game online

Forging A Customers-to-Business World - electronic commerce - Brief Article

Business -to-business e-commerce is not evelutionary in nature. This is a revolution. It's going to completely change how we all do business -- from the ground up, not just within the four walls of an organization, but throughout the entire supply and demand chain. This is just the first inning of the game, and while we may have taken a rain delay based on the market conditions, it's going to be enormous.

B2B is not about technology. It's about designing, revaluating and building new and better business processes. The technology is an enabler. The computer industry has been evolutionary. We've automated the ways we do business, and we've driven efficiencies and productivity, but not in a revolutionary fashion. E-commerce is redeisgning how we do business. Once you get that information, that visibility, the productivity gains will be tremendous.

As we look e-commerce, versus what we've seen in technology over the last 15 years, one striking thing occurs. Unlike the client server, which was primarily within the four walls of an organization, e-commerce spans the entire supply chain, from your customers all the way to your suppliers, and can provide for the first time an integrated view of your world.

The example we like to use is Cisco. For instance, there are two people in its travel and entertainment department who manage the company's 19,000 employees and can report back within three days on any issue, resolution or problem. That's what redesigning a business process is all about.

On the supply side, Cisco increased its manufacturing capacity over the last five years by just less than 50 percent, while the business has grown 300 to 400 percent. Through supply-chain relationships, it outsourced manufacturing and much of its component design. Then it created an integrated, collaborative network to develop and manufacture its products. The savings are enormous.

On the sales side, where a significant amount of the value in B2B e-commerce is going to accrue, Cisco implemented a state-of-the-art customer-service and order-entry Web site. The company estimates that it saved hiring more than 1,000 support engineers at a cost of roughly $200 million per year. Every one of us can generate those kinds of savings once we begin to redesign and redeploy how we do business.

We see B2B evolving in three stages: technology infrastructure and software, horizontal services and vertical marketplaces. Efforts to establish an e-commerce technology infrastructure, which allows companies to automate relationships with customers, have occurred on the procurement side. Oracle, i2, Ariba, RightWorks and NetVendor are beginning to see enormous traction there.

Horizontal services enable e-commerce. In the B2B world, ordered goods must arrive on time and undamaged, so logistics, finance, credit, insurance and risk management need to be in place. Last July, eCredit.com, an ICG partner company that provides online credit evaluation and support for Global 2000 companies, processed 2,000 transactions; by October, that number jumped to 12,000. So we've just at the inflection point.

There are two types of vertical market-places, which bring buyers and sellers together to facilitate transactions. In fragmented marketplaces, there are many buyers and sellers, and in between, lots of confusion. An e-marketplace brings these buyers and sellers together in a more organized, coherent and efficient fashion. A case in point is a two-year-old ICG partner company called eMerge Interactive, which is in the beef-production industry. By the third quarter of 2000, it had helped facilitate the sale of more than 600,000 head of cattle, up 85 percent from the first quarter. The value eMerge is bringing to ranchers, meat producers and packagers, and potentially end customers, is enormous.

Concentrated marketplaces are where there's just one or a few major buyers or suppliers that control what goes on in that market. Progress is much slower, for a couple of reasons. The industries have more complex supply chains and distribution channels, plus there also are significant behavioral changes that need to occur. That's probably the hardest challenge.

Now is a time to be aggressive. Look within your organization and evaluate each and every one of your processes. Once you create new business processes, then select the appropriate technology to run them. We've seen the inverse, where companies begin by buying technology and then say, "What am I going to do with it now?" Remember, this is not about technology.

The last year's dot-com revolution was probably healthy in some respects, but defensive in many. Now it's time for all of us, whether we're an Internet company or a Global 2000 company, to come together and embrace this opportunity to transform the economy.

Reward innovation. The folks doing this are changing behavior. That's tough, so it's important to get all the project leaders together, let them talk about their successes and their failures, and reward those who deliver the biggest impact to the company.

Seek partners who share your vision and can help you steer through these uncharted waters, because there are very few shining stars out there. So we need to create those shining stars. Finally, enjoy the ride. You will never experience another one like it.

Internet Capital Group is a leading B2B e-commerce company that provides operational assistance, capital support, expertise and a strategic network of business relationships to more than 70 partner companies.