Companies should view ecommerce as an opportunity to transform business processes, according to the head of IBM's ebusiness infrastructure.
Speaking at IDC's Internet Executive Forum this week in San Francisco, Dick Anderson, general manager of IBM's enterprise Web management, said the company is set to rake in $10 billion through its Web site this year having started with nothing just a few years ago.
Much of that is from business to business ecommerce which is set to overtake business to consumer. According to IDC, $1.3 trillion worth of goods and services will be traded over the Web by 2003 and Anderson believes, 85 per cent of that will be transactions between businesses.
He said: "IBM, Cisco, Dell and Intel will make $40 billion in ecommerce in 1999."
Big Blue started on the road to ecommerce in 1993 when it began to reorganise the business to escape worse financial problems. According to Anderson, IBM has axed $8 billion off its costs of running and managing its core operations, including product development, supply chain, procurement and delivery, by enabling its customers to do business over the Web. For example, it has saved 90 per cent of the cost of transactions with customers because ecommerce has cut out the need for human intervention.
Anderson outlined a number of lessons IBM had learnt from its ebusiness operations. Firstly senior managers should drive the transformation and that speedy and ambitious goals must be set.
"Use accelerated methods such as a six week methodology rather than six months," he said.
Also Web sites should be designed to address different segments of the audience, for example create separate areas for customers, suppliers, employees and investors, but care should be taken not to confuse by allowing too much cross segmentation.
Companies should also recognise the Web as a new sales channel, or an extension to existing ones, but these should be integrated with help desks because customers are bound to want to ask questions before purchasing, said Anderson.
Finally speed is crucial.
"We're still not fast enough," he concluded.
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