E-business challenge

Despite changes in the market, e-business is alive and well. Granted, e-business has evolved from the days when it was viewed as a “super opportunity.” It is now seen as an accepted catalyst for change. In some circles, e-business is even seen as business-as-usual.

As the hype around e-business wears off, the focus of e-business initiatives is changing. E-business today is more likely to be about integrating and optimizing the e-business systems that a company already has than it is about building something new.

What went wrong with the idea that all e-business applications were about reinventing the wheel and generating revenue and market-share growth? Several factors. First, most e-business investments resulted in more “e” than business. That is, companies bought and built a lot of stuff, increasing the complexity and administrative overhead associated with IT. When the business payoff didn’t materialize, it was painful. Second, e-business initiatives were often fragmented across business units such that most organizations lacked a cohesive strategy. Turf battles ensued, and many of the top brass were justifiably turned off by IT managers’ inability to get their e-business act together. Third, the economic downturn forced companies to put the breaks on pricey e-business projects. Fourth, a lot of e-business service providers overpromised and underdelivered.

Enough history, then. How can firms capitalize on the next wave of e-business?

First, companies have to work on this fragmentation issue, which I know many organizations are already doing. A company needs a cohesive, enterprise e-business strategy, a centralized and scalable e-business backbone, and an organizational design that eliminates duplication of effort by segregating the “e-business people” from the rest of IT and other business units.

Next, companies need to understand that the next wave of e-business is about the back office, not the front office. It involves integration and messy, tricky stuff such as data models, application programming interfaces, and middleware. It’s not about snazzy applications; it is the stuff under the hood with which companies will be most occupied.

If you are an external service provider, expect to have razor-sharp focus in what you bring to the table. The high-level design and strategy work that was available two years ago is no longer out there. Customers want specific services that are vertically focused. If you are a consumer of such services, understand that very few service providers can do it all. Use service providers strategically as part of a well-planned sourcing strategy.

This year has been one of assessment and realignment. It is no secret that many e-business initiatives have yielded less-than-stellar results, and companies have pulled back on their e-business investments. But they will come back to them. And they will start by trying to leverage the e-business investments they have already made.

Barb Gomolski is a research director at Gartner Inc., a research firm in Stamford, Conn. Contact her at[email protected].

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