Executive's Guide to E-business From Tactics to Strategy

A book review by Richard Dance, President of SoftResources LLC

September 2000

The four principal authors from PWC equate e-business to a pictorial panorama where different snapshots can be taken that when glued together show the landscape of e-business. Hence their new e-business model talks about 4 principal snapshots.

A. Introduction

The four principal authors from PWC equate e-business to a pictorial panorama where different snapshots can be taken that when glued together show the landscape of e-business. Hence their new e-business model talks about 4 principal snapshots.

B. Mind Map of the Book's Contents

This table charts out the approach the book takes and the format used. The stronger sections are on the left and the weaker sections on the right. The weaker sections talk about the effects and contain a fair amount of consultant-speak, which is useful on a personal level for a business to consider, but not as important about committing to the 4 snapshot models. The most useful chapters are highlighted with an asterisk.

C. Definitions

Their Definition of e-Business
They don't really come out a say it but this is the closest approximation: The e-business continuum: Some engage in e-commerce which is the purchasing or selling of goods and services on the Internet. Others are leveraging a variety of technology tools combined with new services and information sources to obtain better knowledge of customers and markets, reduce costs, and fuel dramatic increases in value. Still others have made a further leap into e-partnering, integrating so effectively with other companies that they go to market as a collective. Regardless of their place on this continuum, companies that have embraced e-business are implicitly following a new model that drives value creation in a digital age.

I believe that you can tell a lot about a book by the focus and definitions put forth. It is clear that in the minds of the authors, the definition was a bit vague and that is somewhat how the book comes across to the reader. Probably in 1999 when most of the thinking for the book occurred that definition was probably appropriate, however there are newer more far reaching and certainly cleaner definitions in circulation today.

A Further Definition of e-Commerce
E-commerce is, for the most part, an efficiency play rather than an effectiveness play, focusing on cost reduction, extending a company's reach to a larger customer group, and speeding up time to market. Starting a Web site, putting product and service catalogues on the site, and using the site for customer support are all cost reduction exercises.

Expected e-Business Improvements
Relationship Management
Revenue Enhancement
Cost Reduction

These improvements are all good, but show the CPA financial mentality of the book. Lots of the other improvement from e-business are left out from an operational, human resources, collaborative point of view.

D. The Main Message

Snapshot One: Channel Enhancement
Companies employ e-business technology primarily for information sharing and e-commerce (which they define as the marketing, selling, or buying of products and services over the Internet) essentially enabling a new channel to market.

Snapshot Two:
Value Chain Transformation The authors believe the next level of e-business is for companies to integrate their value chains and information systems with the value chains of suppliers, logistics providers, distributors, and retailers to maximize efficiencies and reduce costs.

This is all correct, except the authors don't point out the real complexities associated with this endeavor and that in many industries it is not likely to be achievable today since various parts of industries are at various levels of sophistication.

Also in this and other chapters the important idea of using the Internet for collaboration is missing. This is one of the most mind expanding ideas about e-business that is just starting to be captured. The idea that that e-business can help with all facets of business and not just the financial is a key idea now increasing in importance.

In a mature state the authors point out that value chain integration allows companies to share real-time planning, cost, and production data between ERP (enterprise resource planning) systems, thereby allowing for the creation of a fully e-nabled extraprise, a term they use to characterize an extended enterprise consisting of the company and its value chain partners.

In our judgment, this is too much a leap of faith. They left out some very important steps. Companies just don't jump from channel enhancement to integrated value chains with external parties. There is an intermediate step forgotten along the way - that is companies must first integrate internal systems. Except for a few leaders most are struggling at this level. The situation today is that most companies have a web site that doesn't fully integrate with their ERP system and they are just starting to put in CRM (customer relationship management) systems and face the additional integration challenges there. We think that this might artificially create false expectations among executives about the ease with which this snapshot two might be reached. It is a very difficult, lengthy, costly undertaking.

Snapshot Three: Industry Transformation
The authors contend that companies will find ways to work together that leverage each other's core competencies. They believe that companies with a core competence in knowledge management will thrive in this third snapshot. They will use business partners that have created best-in-class processes in the physical world and others that build and run the best value networks to transform the economic base and the operating mechanics of their industries.

Snapshot Four: Convergence
Convergence is the coming together of companies in different industries to provide goods and services to customers. It is as much a function of industry deregulation and globalization as it is of e-nabled business models. A supermarket's offering of retail banking services is one example of convergence.

The Ultimate Enabled Landscape
The authors view of the future is virtual business networks where corporate leaders will only focus on their core competencies and will seek other players, portals, to take their problems - their noncore activities - away.

The dominant feature of this landscape is the network of interconnecting electronic markets that will be differentiated by the services they offer. Businesses will link into multiple e-markets, as well as directly with each other, to acquire the products or services they need or to connect to their customers.

Unfortunately the authors didn't choose to spend much time on e-markets and explain how they work, or the types of e-markets (exchanges as they are now called). This is an important area that deserved more print space, but may have not been as explosive as it is today, when they were writing the book.

E. Pleasant Surprises found in the Book

This table shows the page number and idea presented that represented an expected and pleasant surprise of information:

F. Other Disappointments

Found in the Book In addition to the gaps mentioned above in both the steps for a business to go through to become integrated and the discussion on e-markets or exchanges as they are called today, there were several other disappointments found in the book where the authors could have been more illuminating.

G. Who the Book is Best Suited For and Not For

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