I-commerce: the first step is the biggest
- 04 May, 1998 21:49
Bottom line -- Internet commerce is here to stay. Although technical issues still need to be resolved, they alone should not keep your company on the sidelines of I-commerce. In fact, the only reason more companies aren't doing business via the Internet today is the fear of failure.
Sure, many businesses have the brochure-like Web site but these are missing the transaction capability. Ask these companies why they aren't more active in I-commerce and an interesting pattern emerges. First, they quickly cite the standard responses: The Internet is too slow for their customers, it isn't appropriate for their customer base, or they don't want to conduct business on a worldwide stage. But in discussion, the reality often surfaces -- they aren't ready to make the move because they aren't sure how to get started. In short, they don't want to fail.
Okay, no one wants to fail, and I admit that it is a big move and that fear seems to immobilise their plans. But it's a bad business decision -- even for today's budget tight business environment.
Many rationalise their stationary stance by saying that the Web isn't ready to allow business transactions. You know: credit-card security isn't there -- business users won't buy online, yada yada yada. Wrong. We have moved beyond the fear of credit card fraud. Besides, for most business transactions, companies use purchase orders.
Furthermore, the business is there. In a recent International Data Corp. (IDC) report, the research company says that I-commerce will grow from $US2.6 billion in 1996 to more than $US220 billion in 2001. That's right, IDC predicts greater than 100-times growth in five years. Although that's staggering -- call me crazy -- I think this is excessively conservative. I foresee more than $1 trillion being transacted via the Net by 2001.
I would bet that $40 billion of that will be spent on Dell computers. Michael Dell, CEO of Dell Computers, said in his iEC keynote that he believes that 100 per cent of Dell's business will be conducted via the Internet by 2001. With average daily sales of $3 million, Dell appears to be well on its way to achieving that prediction. This year alone, Dell expects the company's Web site to bring in more than $1 billion thanks in part to the ease and cost-efficiency that it offers customers.
Although selling computers to computer users fits Dell's audience and business, the real reason Dell can expect this transition is because the company "gets it". Prices alone aren't driving customers to Dell's Web site. Dell sells and customers buy this way because it saves all parties time, effort and -- bottom line -- money.
But this did not guarantee the Web site's success. Seriously, Dell went through several fits and starts getting its Web site to support its business. However, the company quickly learned the I-commerce secret: Your Web site needs to seamlessly tie into your existing business processes and it needs to be flexible enough to tie into your customers' business processes.
Many of the success stories (beyond Dell) at last week's iEC conference had this in common. Lack of the connection to business processes has caused many failures. Because existing companies already have customers, they didn't really need to focus on that huge challenge of drawing potential customers to the site, which Internet start-up companies often face.
But you won't succeed unless you start. Many companies are putting their I-commerce solutions in place. Although you might have felt safe delaying, every month of delay today puts you further behind in this quickly evolving race. As Federal Express and amazon.com have proven, the mindshare goes to those who arrive first with a strong business offering.
So, for the sake of your business, if you don't have I-commerce initiatives in place yet, get started. Remember that the first step is the hardest but make that first step quickly.