the lure of the Internet wearing off?
Back in the day when dot-com millionaires were becoming as common as snow in Wisconsin, the "e" in e-commerce appeared to stand for "easy" – as in, easy money. But in March, as if all at once, Wall Street investors snapped to attention and began to jump off the dot-com bandwagon. The result sent the stock market on a nine-month roller coaster ride as tech stocks – particularly dot-coms – fell out of favor.
Lack of capital and growing lack of investor confidence signaled the death knell for one-time dot-com giants such as eToys and Pets.com. But has all of the bad news about dot-coms turned business owners from incorporating e-business strategies in their companies?
"The whole dot-com thing was isolated to a bunch of companies that were more interested in creating securities and not value," says Pete Monfre, president of Monfre Acott, a Milwaukee firm specializing in marketing and branding programs. "The other thing is, a lot of these dot-com companies that are failing – and I’ve maintained this for years – you cannot ignore everything that came before you and be successful. It was foolishness. It was ignorance on the part of Wall Street, and it had to come down, it had to fall apart."
Bob Weisenberg, president of Brown Deer-based Northwoods Software Development and president and co-founder of the Wisconsin IT Leadership Association (WITLA), says that dot-com failures won’t have an effect on owners with solid business plans. The most important thing to ask when deciding whether to use an e-business strategy is: How does this serve the customer better?
And how fast you jump into an e-business strategy may be dictated by what the competition is – or isn’t – doing.
"If you’re in an industry where your competitors are way ahead of you and using the Internet to serve their customers, you’re going to have to catch up," Weisenberg says of late comers. "You’re going to see it that way just like you would if they (the competitors) bought a new machine at the plant that allows them to make widgets three times faster. You better get one of those widget machines."
Bob Gleason, vice president/managing director of the Revere Group in Milwaukee, says the frantic urgency to get on the Web that started on Jan. 3, 2000 – after the world realized Y2K didn’t destroy civilization as we know it – doesn’t exist as it once did. Companies such as Toys ‘R Us a year-and-a-half ago were scrambling to get a Web site solution to counter eToys because they didn’t want to get "dot-commed" or "Amazoned."
Now that the dust has almost settled on the dot-com shakeout, small and mid-sized businesses that aren’t on the Internet are all asking variations of the same question: What do we do first?
"Amazingly enough, very large companies are asking the same questions," says Gleason, whose firm specializes in e-business consulting, pointing out that employees at General Electric posed the same questions after chairman Jack Welch announced GE was going to be a dot-com.
"There are stories running rampant of large companies that have really cool Web sites that you can order from," Gleason says. "And what happens on the company’s side is the Web site spits out a paper order that somebody picks up off the floor, takes to data entry where they enter it. There’s no integration of the front and back ends. Small businesses struggle with the same things."
Gleason suggests business owners evaluate what will give them more bang for their buck: increasing revenues or reducing costs. Transaction costs in the global economy, according to Gleason, are about $8 trillion annually. "So there’s a sense of purpose, but that sense of frantic urgency is greatly diminished," Gleason says.
But Monfre and the others insist that owners take the integration of an e-business strategy step by step. He says there are five steps in building an e-business strategy, from basic information on the Web site all the way up to transaction capabilities and automated back-end functions.
"People tend to think, ‘Oh, if we’re going to do e-business, we’re going to be all the way to step five,’" Monfre says. "But companies should be concentrating on what the next step is for them. If you have nothing, you should be looking at steps one and two; if you’re at (steps) one and two, you should be looking at (step) three."
The adoption of new technologies like the Internet has been so quick that Weisenberg thinks it will be standard equipment in all businesses, much like the phone and fax machine are now.
The bottom line is, the Internet and e-business are not going the way of the dot-coms.
"Everybody in business will assume that they can order things online, that they can sell things online, that they configure things online, that they can get service online," Weisenberg says. "Virtually every business will be using the Internet in that way, so it will cease to be special, and it will even cease to be a differentiator. The differentiator will be how innovative you are in the use of the Internet, just like it’s not innovative to use a telephone in business today. But what is innovative is what you say when you’re on the phone."
