Tips for building an e-commerce strategy
This is part one of a two-part series on the importance of formulating an e-business strategy. The interview was conducted with Chris Pickering, president of Systems Development Inc., an IT research and consulting firm. Pickering is also a senior consultant for the Cutter Consortium, where he has just completed a survey on the state of e- business today.
Q: Why is an e-business strategy essential?
A: The short answer is: If you don't know where you're going, any road will get you there.
The longer answer starts with the fact that e-business is first and foremost a business strategy. Developing an e-business strategy encourages thinking about the core business (which I like to call the "essential business") and how e-business capabilities can make the core business more competitive.
Failure to develop an e-business strategy results in e-business initiatives that are not integrated with the essential business and do not support it. In the worst cases, the e-business initiative even undermines the essential business, often by failing outright (e.g., CompUSA) and thereby casting doubt on the company as a whole.
Q: Are many companies taking the time to implement one before starting to do e-commerce on their sites?
A: The leaders are. If I were forced to limit myself to just one criterion for predicting e-business success (assuming an already successful company), it would be the existence of a sound e-business strategy. Of course, the key word in the previous sentence is "sound." "Sound" means an e-business strategy that reflects a company's strengths and specifies how e-business capabilities will be used to leverage those strengths to make the company more competitive. Cisco, Dell, REI, Ford, Amazon.com, and the other leading e-businesses all have explicit e-business strategies that are tightly integrated with their essential businesses.
Q: What does the process entail?
A: Understanding the essential business. What business are we in? How are we going to run it? Assess e-business (technical) capabilities for their possible effects on the business. Integrate selected capabilities into the operational model.
Execute well. Of particular importance in this phase is attention to technical and business infrastructures. Both must be planned, designed, implemented, monitored, and maintained so they can support the overarching strategic objectives.
By Esther Shein, a contributing editor based in Framingham, Mass.
This was first published in July 2000