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The business punch line - the E-line

Last month I shared with you the phenomena of Internet that is changing both our society and business models, and I defined the term e-business, which is about transforming key company business processes through the use of Internet technologies.
Every day you can read stories in the news about how the 'new economy' of e-business is evolving. We hear names like America Online, Yahoo, eBay, Amazon.com, and we observe that young (1-3 year old) Net.Generation companies are acquiring old established enterprises.
We are also starting to see a clear differentiation between those companies that are adapting to this 'new economy' (e-businesses, which base their business model on using the Internet for their core business processes) and those who are still stuck in the 'old economy'. We can draw a line between these two business models, calling it the e-Line, i.e. those above the e-line who are e-businesses and those below the e-line who are not e-businesses.


Espen Ramsbacher

Last month I shared with you the phenomena of Internet that is changing both our society and business models, and I defined the term e-business, which is about transforming key company business processes through the use of Internet technologies.

Every day you can read stories in the news about how the 'new economy' of e-business is evolving. We hear names like America Online, Yahoo, eBay, Amazon.com, and we observe that young (1-3 year old) Net.Generation companies are acquiring old established enterprises.

We are also starting to see a clear differentiation between those companies that are adapting to this 'new economy' (e-businesses, which base their business model on using the Internet for their core business processes) and those who are still stuck in the 'old economy'. We can draw a line between these two business models, calling it the e-Line, i.e. those above the e-line who are e-businesses and those below the e-line who are not e-businesses.

The new economy is not a threat but an opportunity to become more competitive, more aggressive, to grow the business and improve the bottom line. Developing a strategy that will bring the current business model of the company above the 'e-Line' should be every CEO's priority these days.

Is it possible to cross the e-Line very fast from the old economy to the new economy? The majority of enterprises are still working in the old economy and not using the possibilities the Internet and the new economy can give them in terms of competitiveness and an improved bottom line. Here are some examples of strategic e-Business directions that you can take.

1) e-Commerce: In principle, anything can be sold via the web. Promoting your solutions and products on the web make them available to a global market continuously. Currently, the most popular products sold on the web are computers, software, music, hotel rooms, flight tickets and books. But there's really no limit, as cars, machinery, flowers, hand-crafted items, furniture etc. are already sold on the web, and more products are offered on the web every day.

2) e-Procurement: Every company buys goods and services. You can plug your suppliers into your online procurement system and save time and cost.

3) e-Care: Getting customers to use the Net to help themselves means big savings. For every service call handled, you can save 70-90% of the cost of having a person take the call, and even better, the customer satisfaction rating might increase.

4) e-Learning: Every classroom day converted to electronic courses delivered via the web can result in big savings.

Yes, it is possible to cross the e-Line and become a real e-Business and be a player in the new economy, but you must start now by developing your e-Business strategy and actions, otherwise you will remain stuck in the old economy.

I would be very interested in receiving examples via my e-mail address from Slovak companies that are either above the e-Line or are on their way to crossing the e-Line.

Espen Ramsbacher is Marketing Director for IBM Central Europe, Russia, Middle East & Africa. His column appears monthly. Send comments or questions to ramsbacher@ibm.com.

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