Cisco: E-Commerce Involves Change Management

SINGAPORE (04/04/2000) - Moving into the electronic-commerce space is all about change management, a founder of one of the most successful e-commerce sites said here recently.

Four building blocks -- leadership, governance, technology, and competency -- are the foundations of a successful e-commerce plan, said Peter Solvik, chief information officer, and senior vice president of Information Systems at Cisco Systems Inc., during his presentation, Architecting the Internet Corporation.

In the area of leadership, senior management must drive the e-business mission with a well-defined Internet strategy that is integrated with the corporate's business strategy.

As for governance, roles, responsibilities and accountabilities must be clearly defined and a funding model must also be established, all of which must be organized in a manner that will make it possible for the firm's e-commerce goals to be delivered, according to Solvik.

On the technical side, a scalable infrastructure must be set up using defined standards and tools that employees and partners could utilize efficiently.

"Have extranets to your Web site so suppliers can do joint designing with you, for example, so they can bring in their ideas that help you improve costs and enhance inventory management," Solvik said. "Empower your workforce, by bringing into your brick and mortar stores the tools that are available to your e-commerce site. This way, sales people can provide customers at the shops with a level of service that is comparable to that enjoyed by online customers."

To raise the competency level and ensure that the correct skill sets are in place in the organization, appropriate recruiting strategies and resource development activities must be undertaken. Furthermore, the corporation must establish an e-business culture.

"The business and IT organizations must both be moving in a direction that will make e-commerce successful. It's not a ‘them and us' it's a ‘we' issue."

Such thinking is fundamental to the success of Cisco's e-commerce site, Cisco Connection Online (CCO).

"Our business organization had requirements that drove IT to build an e-commerce solution. As such, technology enabled the business strategy to succeed," he said, referring to CCO which Cisco uses to build more effective relationships with customers by way of breakthrough customer service and e-commerce technologies. CCO recently surpassed the US$20 billion run rate, making it one of the largest revenue networked commerce Web sites in the world.

Solvik said that sellers with both brick-and-mortar and online stores should leverage of the two. One way is that sellers could give discounts to customers with coupons which they get off the e-commerce site. Or, these vendors could allow their online customers to collect their purchases from the store's physical outlet.

Solvik is optimistic that e-commerce sites in Asia and Europe will enjoy a high level of success because of the nature of the two continents.

"The Internet spans across geographical boundaries and can overcome cultural differences. When you do business (in Asia and Europe) across multiple cultures and languages, the Internet is the best medium. This is because people might find it is more difficult to speak in a second language for trading than using the Internet to transact. People prefer self-service type options, the way they use the automated teller machine, for example."

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