Editorial: Is e-business all flash and dash?

The promise, or at least the premise, of most IT projects has been to make businesses more efficient. Dramatic technological developments have driven and hyped the gains, which have then been sold, often, in used-car fashion.

Very rarely a dissenting voice questions the claims made on behalf of IT. The wreckage of failed IT projects is easily hidden by refashioned business plans, reassigned hardware, and outsourcing deals. The momentous force of a highly intelligent and well-funded industry takes no prisoners in continuous waves of technological euphoria.

E-business is the latest marvel to roll off the production line and simultaneously its zealots offer to bring gains for everyone and to make up for all the under-delivery of the past. It's a tall order but there's a new generation of IT professionals ready to make it happen and a wagonload of would-be e-business executives looking for an express train to the boardroom.

The difference between e-business and traditional IT is that it works its magic on the inter-company transaction, rather than internal processes. So if you believe IT can work wonders, just multiply by the network effect and hold on to your pants.

Many of the emerging e-business vendors will have us believe we're heading for a world of electronic marketplaces and exchanges operating to everyone's mutual benefit. Everyone will do what they do best (most efficiently), business will prosper, society will evolve, and world hunger will be eliminated. You could call it e-idealism.

Unfortunately for believers, electronically arbitrated fair and perfect B2B marketplaces are not going to pan out as planned in the have and have-not business world.

Early independent marketplaces in the US are already having to rethink their approach of being equitable to all players and are cosying up to dominant buyers in their markets.

Regulatory authorities are looking hard at groups of competitors joining hands online, warning them to keep smaller competitors involved. They're apparently wary of kicking off the "next big court case" but how long can they sit by?

Identifying new suppliers quickly, buying and selling commodities on an open market, if these features are of overriding importance to your business, then niche electronic marketplaces and exchanges might be for you. But if you buy commodities you're probably already using efficient global electronic markets.

Consider too, the idealistic "total visibility" goal of supply chain automation. We are talking huge amounts of data and processing to track and plan for every component of every end-product sold. This grows exponentially as you add more suppliers and components to the mix. There is clearly a need to prioritise development and be strict about business return requirements.

So in this case who cares if Australia is a few months behind in e-business? Let's exploit the advantage of being "fast followers". E-procurement and basic customer relationship management (CRM) are two aspects of e-business that look promising. One helps you buy low, the other helps you sell high, and that as they say, is what business is really all about.

E-business - is it all tripe and hype? E-mail to richard_wood@idg.com.au, for publication unless otherwise indicated.

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