A New Strategy for Crossing
There is clearly enough technology available to solve almost any eCommerce challenge. The real challenge is identifying the innovative business model that is enabled by the new technology.
Message from the President
The speed of changes in the Internet commerce marketplace is having a detrimental impact on companies’ ability to mainstream many of the new innovations. Internet technology development is accelerating and the mainstream adoption rate is not keeping up. Product life cycles are decreasing and, as such, eCommerce products are being developed more and more for the early adopter and experimentor. The result is an environment that produces products targeted at only the early adopter or risk-taker and avoids the need to move to the broader market. Internet Commerce needs to move beyond this short-sighted technology model and bridge the chasm (to paraphrase Geoffrey Moore). To move beyond this approach, corporations need to take on a new strategy for Internet Commerce.
First, you need to recognize the pull factor of major corporate users of Internet Commerce technology bridging the chasm, rather than the traditional method where the developers of the technology push to get their products imbedded in the main stream. This is based on a fundamentally different approach from what most organizations have embarked upon. This is similar to the change that CommerceNet has undergone over the last year. We need as an industry to shift from a focus on the technology to a focus on new business models. There is clearly enough technology available to solve almost any eCommerce challenge. The real challenge is in identifying the innovative business model that is enabled by the new technology.
To change requires a number of specific organizational strategies:
1. Executive empowerment. - The first step is to get executive management involved and supportive of the project. Without that level of management, you are guaranteed failure. Realigning organizational strategy requires commitment and empowerment from the top. The first step in this process is a careful education of the key executives in your company. Find some examples of key companies who have made executive-level commitments to Internet Commerce and organizational realignment. Bring your executives together with those other top leaders to share views and ideas about the impact of electronic commerce.
2. Create a strategic Internet Commerce organization. - Once you have gotten executive management on board, establish a strategic Internet commerce organization. This organization should be made up of a small staff of senior change agents. These change agents should represent key knowledge areas in the company such as finance, order management, marketing, sales, product distribution and technology. This allows the team to work effectively across multiple functional areas.
3. Stay independent from any specific functional area. - A source of many conflicts within corporations comes when one functional area gains power over another. For example, eCommerce led by the information technology organization can potentially cause friction with marketing or sales organizations. The same is true in the reverse - marketing leading eCommerce and developing IT solutions. This strategic organization should report to a politically correct place in the company to allow linkage into all major functions at both the corporate level and within any operating entities.
4. Separate the strategic team from any and all production efforts. - Production services have specific requirements and can significantly hinder the strategic development of eCommerce. Keep the strategic development team independent from the production services. The strategic team must be free to investigate and suggest alternative approaches that might run counter to current production directions.
5. Participate in collaborative efforts across your industry and other industries. - The strategic team needs to be both externally focused as a business development function that works within the industry, and internally focused when working on new business models and approaches. The team should develop an intelligence database that tracks innovative approaches, new technologies and visionary thinking - building a radar system that identifies potential new ideas and opportunities. Innovative new ideas often come not from your own offices but from interaction with customers, suppliers, partners, people outside of your industry and even competitors. Avoid getting stuck in the "not invented here" syndrome that labels anyone else’s ideas as not as good as yours. Likewise, don’t do the opposite either. I’ve seen companies ignore superior ideas and approaches just because they were developed in house and not by another company or a highly paid consultant. The bottom line is: look everywhere for new ideas.
6. Focus on testing new business models and approaches not technology. - Too many strategic Internet Commerce groups spend lots of time developing or testing new applications. They proudly announce their strategic alliances with vendors that allow them early access to technology for testing. These organizations spend all of their time beta testing new technologies and applications because they wrongly think that they will get an edge on the market by being able to adopt leading edge technology faster. This is absolutely the wrong reason to be partnering with vendors and testing new technology. It is a much greater benefit for your company, and even your vendors, if you first focus on creating new business models and needs and then push your vendors to adapt their technology to meet your needs. Find the technology to enable an innovative business model rather than create a new business model to use some "hot" new technology the press is raving about.
7. Take the model to the market. - Often new models and approaches require changes not only in your own business, but to the entire marketplace. To really make an impact, Internet Commerce involves changing not just your company, but changing the way customers, partners, suppliers and maybe even your competitors do business. You must be able to think outside your company boundaries and beyond your company’s short-term interests -- to be willing to take action for the expansion of current markets or creation of new markets. Obviously this is not easy, but it can mean the difference between being the market leader and playing catch up.
8. Drive technology innovation. - Drive innovation in the market through new business models and approaches. Since many vendors are caught up in the technology side, creating applications for the early adopters and risk takers, they cannot bridge the chasm. That becomes your responsibility. You can start to bridge the chasm by establishing joint projects with industry based on your innovative business models. Bring in the technology suppliers (both large and small) and partner with them on new projects. Use consortia as noncompetitive environments to bring multiple companies together to push the technology developers to create applications that support innovative new ways of doing business.
As more and more companies change their focus from technology to business model reengineering, noncompetitive environments that enable linkages, provide knowledge, support collaborative testbeds and can take action on behalf of the industry will be increasingly critical to the strategic success of the corporate users of Internet commerce. CommerceNet today provides exactly that opportunity -- to provide a noncompetitive forum for various levels in your company, all the way up to your executives, to meet and discuss critical changes to the market, provide ongoing knowledge about emerging and innovative best practices and the technology used to enable the best practice, provide support and leadership for collaboration on pilot projects and trials that validate new business models, and represent you - and the rest of our members - in taking direct action on many of the critical policy, legal and standards issues facing the industry. CommerceNet stands ready to provide ongoing facilitation and knowledge to help your company maximize its investment in Internet commerce.
CommerceNet is the leading industry consortium (non-profit) dedicated to accelerating the growth of Internet commerce, and creating business opportunities for its members. CommerceNet draws its strength from its broad base of nearly 500 member companies and global partners, comprised of industry and technology leaders, whose mission is to foster Internet-based electronic commerce by:
- Identifying and working to resolve key industry issues,
- Providing a global, multi-industry forum for collaboration, and
- Serving as an advocate through public policy and education.
For further information or any other inquiries, you are invited to contact:
Director of Member Services
Telephone: (415) 858-1930 -- FAX: (415) 858-1936
Your comments and suggestions for these pages are most welcome!
Revised: April 16, 1998 TAF
© 1998 Electronic Commerce Media Inc., All Rights Reserved.