'A tidal wave of e-business will hit us' - DV Jagadish, Deputy GM, Emerging Businesses and Peripherals, Tata IBM

In a way, the Chairman of IBM, Lou Gerstner,

started it all. It was he who said, "Network Computing (read e-business) will

transform every institution in the world. It will create winners and losers. It will

change the way we do business, the way we teach our children, communicate and interact as

individuals." It is not surprising that last year nearly $27 billion of IBM's $78

billion revenue came out of offering e-business solutions. IBM has been saying more or

less the same thing here in India as well. For over a year, Tata IBM has been taking out

road shows, literally taking the message to the masses. According to sources, this fiscal,

nearly Rs50 crore is expected to come from e-business activities in India. In an interview

to DATAQUEST, DV Jagadish, Deputy GM, Emerging Businesses and Peripherals, Tata IBM, does

some straight talking besides throwing light on the Indian market.

How does an organization go about

e-business?



It is important for an organization to progress in stages in the evolution of e-business.
The first stage or application after a company is networked is email. It must quickly

graduate to collaborative computing where its core business processes are web enabled and

remote teams work as if they are all together in the same room. The next step is to

establish extranets or connectivity with downstream (distributors/resellers etc.) and

upstream companies (suppliers/vendors) to work as one virtual corporation. With this solid

base of networked efficiency, the company can establish a strong presence on the web and

encourage its customers to transact electronically. This stage is popularly known as

ecommerce where buying and selling occurs over the net. The benefits start to accrue and

increase as a company progresses along the e-business journey.

Can you give one good reason why a company

should go the e-business way?



There are plenty of good reasons. From its perspective, the company can access new

customers all over the world very efficiently, round the clock, seven days a week. This

expands the market address and potential for higher sales. E-business also helps the

company deliver superior customer service and maintain a closer relationship with them. As

everyone knows, the real benefit to a company happens when a customer stays with it for a

long period of time. Another benefit is that e-business helps colleagues, even if they are

located at dispersed offices, collaborate with each other and work as one cohesive team in

the service of the customer. Intranet-based applications also lead to higher efficiency,

leading to cost savings and faster customer service. Besides, it is also fast becoming

imperative as competitors are adopting e-business strategies to differentiate themselves

from others.

Is that why it is said to be the way of the

future?



At the heart of the e-business phenomenon (which, simply put, is the coming together

of the web with IT) is the rapid proliferation of the internet. Today, the net reaches

over a 100 million people all over the globe. This easy and direct access to the customer

opens up dramatically new possibilities for the company. One can now understand the

customer better in terms of his wants and needs, as well as buying behavior, through

constant dialogue. Combine this with cutting-edge technology and you have the perfect

recipe for mass customization.

In other words, typical industrial or consumer

products which were mass produced and identical are now becoming personalized. Similarly,

distribution channels are changing as conventional layers get disintermediarised and

manufacturers start to access the customers directly. E-business is termed a new wave on

account of its impact and ability to change the existing order.

Can you map this against the Indian reality

where computers are yet to penetrate deep into our society?



The e-business phenomenon is globally applicable and India is no exception. E-business

alters the traditional concept of time and space. An Indian company with minimal

investment can now tap the entire world market. Although penetration of PCs is relatively

low in India compared with developed economies, the growth rates are high. In the current

slow phase of economy in India, PCs have registered a growth of 43% for the first six

months of this fiscal, something that most sectors cannot hope for in the best of times.

For the first time, the Indian market may see over one million PCs being bought in a

single year. And this can explode!

It is equally important to realize that owning

PCs will not be the only way to get connected. Net Cafes and public access points will let

the casual browser surf for a small price. Very soon, we will have set-top boxes and Net

TVs which will let us access internet through cable TV. These are likely to be very

economical alternatives to owning a PC. This way, e-business will grow at the business and

the consumer ends and set off a chain reaction.

In India, we often are confronted with

sceptics who feel that e-business will not take off soon as there are too many

bottlenecks. It is true that there are hurdles such as inadequate infrastructure, absence

of cyberlaws and no electronic payment gateway. The good news is that these are all

getting fixed. More importantly, we should focus on what can and must be done right now.

We can build intranets, web enable our processes, retrain our workforce in adopting an

e-culture, set up an information web site and conduct business-to-business interchange

etc. Only then will we be truly ready to captialize on the enhanced infrastructure or the

cyberlaw framework. Good examples in India are ABB and Malayala Manorama, which have set

up intranets to help speed up their business processes. In fact, ABB found that this

strategy helped reduce their cycle time for approval of engineering drawings by a whopping

50%.

Can you give examples of how Indian

businesses can benefit by this technology? What is your data on Indian behavior?



In fact here is a good Indian example: Ludhiana in Punjab is known for its export of

hosiery and sports goods. Some time ago, exporters noticed an inexplicable drop in sales.

Further enquiries revealed that business was being lost to Pakistani exporters across the

border. The reason for this was not quality or price, but that exporters in Pakistan had

put their products on the web. Increased convenience and communication in this case led

business away from India.

Rediff On the Net and Colorplus are offering

their products on the web. Rediff reports a growing number of hits each month and

thousands of books, music cassettes etc. are being bought by Indians. Many Indian

exporters are finding new ways to penetrate the West with e-business for selling the

Indian mystique: yoga, astrology, silk, Ayurveda etc. A departmental store in Indore has

announced plans to sell groceries over the web. Nirula's are selling pizzas on the web.

Leading film stars have established web presence. News companies are planning to deliver

customized newspapers to their customers. Many people in India have been routinely buying

cinema tickets over the net. Indeed, there is a perceptible groundswell of new buying

behavior set off by thousands of netizens across the country. As more people experience

the convenience, choice and economies of buying on the web, a tidal wave of e-business

will hit us sooner than we may believe.

Can all businesses benefit equally from

this new technology? I mean, can traditional industries like manufacturing benefit. And

how? For, buying psychology is different in India.



Not only businesses of all types, but governments and non-commercial organizations can

benefit significantly. Already, Andhra Pradesh government in collaboration has plans to

set up a center for electronic governance, which will result in increased convenience to

the citizens and transparency in the working of the state. The government of Rajasthan is

implementing a file tracking system designed to speed up the internal working of its

departments.

Manufacturing sector in India is one of the

largest and the most mature and has significant transactions with the ancillaries, the

vendors, the dealers and the customers. Most of the leading companies in this sector in

India are seriously looking at how e-business can help them. The direction clearly is to

set up enterprise wide intranets, implement ERP, web-enable key processes such as sales

order receipt, inventory etc. and gear up to a position where they build interfaces

between these applications and those of their vendors and business partners.

Would it be correct to say that Indian

companies can actually compete globally like never before? Does that mean that size of an

organization is not a big issue as far as ecommerce is concerned?



Size does not matter!! Organizations of any size can take advantage of e-business. It

is a great leveller. It reduces the entry barrier significantly. No longer do you need

armies of people and expensive real estate to setup a global presence. However, in larger

organizations where internal collaboration or cohesiveness is harder to achieve,

e-business is a powerful glue.

Analysts are heralding the arrival of the new

business order. Whenever the business model has changed, new leaders have emerged in place

of the old ones. In the revolutionary world of e-business, buyers are demanding more

choice and convenience all over the world. Regis McKenna, a marketing guru, says, "In

America, choice is becoming a higher value than brands." This then is an opportunity

for little known Indian businesses to innovate, customize and grab market share and

leadership globally. More than size, in the e-world, innovation, personalization and speed

make a great deal of difference. For a start, exporters of products and services in India

have taken advantage of this new medium. This needs to be consolidated and capitalized on.

In India, the usage of credit cards is

limited to urban areas and that too among certain sections of society. Given this, what is

the real potential of doing business electronically?



Ecommerce will lead to tremendous increase in benefits: worldwide choice, easier

access to detailed information, lower prices, lesser time spent and so on. These

incentives will push consumers to adopt a life style suited to the e-world and we will see

a proliferation in credit cards, debit cards, smart cards etc. As mentioned before, the

real big potential for ecommerce worldwide is business-to-business, and this is valid in

India too. There are no issues of credit cards here.

What are the legal issues in India as far

as ecommerce is concerned? Can organizations transact in currency other than the rupee

right now?



There is a lot that can be done within the existing framework even today. But for true

ecommerce (particularly business-to-consumer) to takeoff in India, we need a set of

'cyberlaws' that recognize the validity of electronic transactions. Electronic purchase

orders need to have legal validity, digital signatures need to be recognized, cross border

issues (export/import) and sales tax angles (point of origin and destination) need to be

clarified. In addition, privacy issues would need to be addressed.

According to recent reports, the cyberlaw

draft is ready and may be presented at the winter session of the Parliament. Ability to

transact across borders is a big necessity to take advantage of global ecommerce and for

that to happen, we need free Rupee convertibility. While those few who possess Dollar

cards can transact globally, the rest can look forward to some brisk Rupee shopping for

now.