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Chapter 1. Moving from e-Commerce to e-Business - Pg. 1

1 Chapter 1. Moving from e-Commerce to e- Business What to Expect New economy, new tools, new rules. Few concepts have revolutionized business more profoundly than e-commerce. Simply put, the streamlining of interactions, products, and payments from cus- tomers to companies and from companies to suppliers is causing a seismic upheaval in corporate boardrooms. Managers in the new millennium are being forced to reexamine traditional definitions of value, competition, and service. To compete effectively in the e-commerce world, a company must structurally transform its internal foundation. This structural change requires a company to develop an innovative e-business strat- egy, focusing on speed to market and break through execution. This structural change requires large-scale process changes, focusing on reducing variation and hand-offs. At the same time, com- panies must also develop a potent e-business infrastructure oriented toward continuous service improvement and ceaseless innovation. In this chapter, we'll look at the mechanics of e-business: what it is, its corporate and economic impacts, and how it is radically changing business processes. A core component of successful e- business practice is assessing and redesigning how your firm provides value to its customers. This chapter includes the steps we recommend for disaggregating these components of customer value and reaggregating them into the value chains that support the e-business model. · Why can consumers buy a $999 built-to-order PC from Dell online but not a customized $3,000 color copier from Xerox? · Why can you trade stocks and options online through Charles Schwab but not go online to view or make changes to your Cigna or Kaiser health insurance plan? · Why does it take only a few minutes to choose a flight, buy an airline ticket, and reserve a hotel room and car through Microsoft Expedia but twice as long to speak with an American or United travel agent? · How can FedEx and UPS make it easy for customers to track their pack ages, create airbills, and schedule pickups on the Web, but banks cannot tell their customers the status of online bill payments made to the local phone company? · Why is it that Cisco can overhaul its product line every 2 years, but Kodak cannot seem to deliver rapid innovations to meet changing customer requirements? What makes some companies successful in the digital economy? Visionary companies understand that current business designs are insufficient to meet the challenges of doing business in the e- commerce era. If you take a close look at such leading businesses as Intel, Dell, Nokia, Cisco, and GE, you'll find a new business design, one that emphasizes a finely tuned integration of customer needs, technology, and processes. These companies use technology to streamline operations, boost brands, improve customer loyalty, and, ultimately, drive profit growth.