E-business is the Game

Introduction

This short paper details how to play the e-business game.

The Problem

There are two painful drivers impacting most businesses:

Increasingly demanding users
The continuing downward pressure on margins

Ironically e-business has provided the environment for these to flourish. Clients can now compare offerings in a way that would not have been possible a decade ago. Price visibility means that the only way to claw back margin is to cut the associated costs.

The problem is exacerbated because it is not simply a case of cost managing your way to profitability. Clients are looking for innovative products/services to support/validate their 21^st century lifestyle.

‘Stack ‘em high sell ‘em cheap’ isn’t the way ahead either. The business press is sprinkled with stories of beleaguered ‘box shifters’. Some companies have reinvented themselves as service providers (IBM comes to mind) with great success. However the ‘experience economy’ has arrived and customers are now basing their purchasing decisions on the experience they are likely to encounter. Pizza Hut doesn’t shift pizzas it creates experiences. There is a growing band of ‘soon to be’ adult purchasers who will have an emotional bond with Pizza Hut because they celebrated a birthday party there with their closest friends and families as a child.

You are now expected to create an emotional bond with your increasingly demanding customers. And all for a reduced margin!

You have got options, of course:

Be acquired
Ultra niche yourself to avoid price comparison pressures
Respond to the 21^st century market.

The Solution

The fact that you have read this far suggests that you keen to play the 21^st century market game.

The game has a number of rules:

He whose business processes are simple and lean will make a profit
He whose infrastructure can accommodate increasingly fickle customers will retain them
He who decides first on the best information wins market share
He who can create a positive experience will sell more
He who is available where the customer is is most likely to get the business.

Let’s take a look at each of these in turn:

Simple and lean processes

IT departments often take the blame for failed projects when the actual problem is that the business processes are not appropriate to the business objectives. That aside, business processes must be kept simple, thus making it easier to manage and adjust if required. The business books of the last century encouraged us to sell our way out of cash flow challenges. In today’s limited market this is not an option. So the big thrust has to be in driving the fat out of the processes. The key question to ask is “Can this be done by a computer?”. This is not to drive humans out of the business, but to ensure that the staff you keep are offering value over and above a piece of kit that requires minimal management time and has very consistent behaviour. e-Supply chain management is a big theme in this area.

Satisfying fickle customer

Whilst e-supply chain management will deliver efficiencies, particularly once/if online exchanges become part of the chain, there is a presumption here that we know what the customer will want. The key will be to having an infrastructure that is not just supply chain driven, but demand chain driven. I am not suggesting that if you sell financial services, you need to be on guard to possibly sell coffee tables. But within the realms of financial services you will need to give the customer total flexibility in enabling them to tailor their use of your service. An efficient way to achieve this is by encouraging your customers/prospects to visit you via your user configurable portal.

Making quick decisions

‘If only my company knew what my company knows’ is the lament that has spawned the discipline of knowledge management. Your company has a lot of information about your customers. If you are a global company are you able to ‘hunt as a pack’ in this respect? What you need here is one, and only one, intranet; one CRM (customer relationship management) system, and only one. All integrated with your other enterprise applications. It looks like a job for the folks in IT. That’s the easy bit. Getting your sales staff to share information will be the main challenge.

Create a positive experience

Professional, empathic and consultative customer facing staff (and that includes accounts) are very difficult to acquire. Those that have introduced labyrinthine telephone queuing systems lead the way in creating a negative experience. Over time the number of customers confident in using the web will increase. In many sectors the customer is already web-savvy. Thus it is worth investing in making your web site customer friendly. Forget the Jean Michel-Jarre light shows. Users want quick downloads, easy navigation and useful information.

Be where the customer is

Don’t expect the customer to come to you, or to even go to her desktop. You need to be accessible via the palm top (PDA, mobile phone) and carpet top (TV). Catching the customer when and where the mood grabs them is key.

In summary

e-Business has changed the game by empowering the customer. As IBM says, e-business is the game. You need to play to win.