Big bang business re-engineering is the wrong approach to e-business, says SSI

You’re not going to generate extra sales through e-business: “research shows … any sales brought in through e-business channels just replaced those from other channels.” So says marketing director of manufacturing SME enterprise web-based IT specialist SSI, Neville Merritt. He says that while current lethargy over e-business might have much to with the economic climate, “the lack of returns from too many e-business projects would surely have caused management to think twice about their approach.” e-business strategy now needs to be “about pacing”, he says. Getting to the streamlined, waste-free e-business processes ideal “has to come over time,” and needs to be based on elements of internal and external rethinking across sales, manufacturing, order fulfilment – but not all at once. Merritt reckons that the problem with much of e-business investment to date has been a lack of clarity as to ROI (return on investment). “Initial projects were generally customer-facing, so the obvious conclusion is that they should generate extra sales,” he says. Which in general doesn’t happen. Even if e-business did develop new customers, says Merritt, problems with fulfilment, involving rekeying and wasted time, could undo all the good. Unfortunately, he says, companies were then led to believe that e-business was about massive internal and external into the supply chain transformation. “Could you use the Internet to avoid duplication of resources and processes? Could you link up with suppliers and customers in a genuinely integrated end-to-end supply chain? This was the message of the Oracle ‘We saved a billion dollars’ marketing campaign. “Unfortunately this completely failed to recognise the reality in the overwhelming majority of companies,” he opines. “Both vendors and analysts pushed out the message that you need to transform your business top to bottom and put every function online if you are to embrace the e-world.” And that’s the point: “They were wrong,” he says. “No company can reinvent itself in a couple of months. The Internet doesn’t change the fact that changing corporate culture is a slow and painful process.” Says Merritt, “Companies should dip their toes in the water and see if the temperature is right for them. They should engage with trading exchanges if there is a suitable one for their sector and location, or build small-scale private exchanges to enable self-service interaction with their suppliers, rather than wasting money on big ticket e-procurement packages.” And he adds: “They should use the emerging technologies such as XML to integrate closely with their best customers. Why spend your precious resources on systems that enable you to target new customers who might, just possibly be interested in you, when you have existing clients who pay your bills and who, if properly serviced, are far more likely to spend more.”