Here’s a questionnaire for your enterprise:
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Does it take so long to upgrade your systems that by the time it is done,
you need to start working on the next upgrade? -
Is information difficult to find, access and manage?
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Are security problems getting worse instead of better?
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Are maintenance and ownership costs getting out of hand?
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Is the need to streamline internal processes becoming increasingly urgent?
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Are you unable to manage your network remotely?
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Are your system administrators spending most of their time fixing things
that don’t work, instead of adding new functionality?
If you answered yes to a majority of these questions, your
network isn’t e-ready, and it’s time you thought about Web-enabling your
enterprise lest you lost out to a more Internet-savvy competitor.
The new economy enterprise has to realize the urgency to be
Web-enabled, the sooner the better. "It’s time for all enterprises to get
cracking with their e-strategies. If you haven’t started as yet, you are
already late," says Sanjay Jain, Partner, NetAcross.
Towards a complete e-enterprise
The process of e-enablement of any enterprise is not merely
about having a Web presence. It has evolved over the years to include many more
features that would transform the entire business. A complete e-enterprise has
to be ready for supply chain management (SCM), customer relationship management
(CRM), enterprise resource planning (ERP) and many knowledge management and
infrastructure management disciplines. A global survey conducted by IDC
indicates that while 65% corporates have created Web sites, only 30% of those
sites are e-com enabled.
The E-strategy |
|
A complete e-business strategy should include: |
|
Vision |
How and to what extent you want to transform your |
Leader |
The business leader or group of leaders who will be |
Plan |
An plan or architecture that incorporates information, |
Implementation |
A realistic step-by-step strategy to implement the plan |
Sourcing Strategy |
From where to source the requisite skill set, people and |
Risk Management |
Learn from your experience, identify the risks and work |
Business Model |
Identify the sources of revenue and cost structure to |
However, if your organisation is among the large IT-savvy
enterprises, you would have already automated your internal business processes
through ERP software such as SAP, Baan or ESS. Vijay Sethi, GM, business
solutions, IT, Ranbaxy, explains that since Ranbaxy had already invested in SAP,
it had to spend only about Rs 25 lakh on extending its functionality for the
Web. Most ERP vendors today offer supply chain functionality in addition to
transactional functionality. According to a Nasscom study in India, the most
commonly found business practice is to establish extranets or EDI infrastructure
for an initial or learning period. This is subsequently upgraded to
Internet-based access mechanisms for the supply chain. A global study conducted
by Gartner Group says that by 2004, 90% of enterprises that fail to apply SCM
technology and processes will lose preferred supplier status and thus
profitability.
Aligning business with IT
Before an enterprise implements any e-enabling technology, it
is very important to work out a detailed strategy for aligning the company’s
business processes with its Web plans. One needs to define the points of
interaction with customers, do a cost-benefit analysis and decide what you can
achieve from e-enablement. "Any enterprise trying to migrate to e-business
has to first decide why it wants to go for it. It is very important to have a
clear understanding of how it will implement and how it will integrate and
augment its offline business," says Jain.
Till recently, the primary concern of any enterprise going
for e-enablement was to get there before its competitor could. The mistake that
most early entrants made was that they hurriedly went for implementation,
whether or not the technology was relevant for their businesses. "Nine
months back everyone wanted to move to e-business. When suddenly the market
fell, most of them realized the need to align IT activities with their
business," says Jain. In a rush to be there, companies had implemented
half-baked plans, without the support of back-end processes.
Enterprises are gradually realizing the need to have a
sustainable business model. According to Sethi of Ranbaxy, the Web approach of
enterprises has become more serious over the last six months. "In fact, we
started our Web initiative only three months back because we wanted to be very
clear on what we wanted to achieve from it. We did not want to join the me-too
bandwagon," he says.
Doing away with legacies
While the Internet has created opportunities for new
businesses to emerge, it has compelled the traditional companies to change the
way they do business. Old ways of invoice processing are being replaced by a
new, more diverse order that changes the approach to trading partner
relationships. New business models have given way to electronic marketplaces,
electronic catalogues and electronic bidding systems, which are creating an
open-sourcing environment.
Traditional enterprises worked on a more conservative
approach based on a command-and-control philosophy and limited flow of
information to the outside world.
E-enablement, on the other hand, demands a free flow of
information and hence a need to do away with these barriers.
Studies indicate that the Internet fever has already caught
on with Indian enterprises. Compelled by competition, they are all moving
towards new emerging business norms. A Nasscom projection shows that e-commerce
transactions in India are expected to reach Rs 1,200 crore this year. More than
55% of corporate respondents say e-commerce transactions are now an integral
part of their corporate plans. Of these, nearly 85% are industries that did not
have direct or frequent contact with end consumption. About 23% of the top 500
companies in India already have some form of e-commerce system in place. These
have been facilitated either through the upgradation of existing IT systems or
fresh installations configured for e-commerce transactions. The traditional
brick-and-mortar businesses no longer want to be restricted to their old
fashioned ways of doing business. It’s time to get rid of old legacy systems
and become Net-savvy. "The new emerging technologies bring with them the
best international business practices. Our company has been quite open to
them," says Sethi.
B2B or B2C?
A well-planned e-model can work wonders for any business,
whether it is B2C or B2B. Many of the routine business activities can be
automated, which minimizes physical interaction and saves cost. In the Nasscom
survey, more than 90% of the respondents cited perceived efficiency in supply
chain management as a motive for B2B e-commerce and enhanced customer service
towards just-in-time management.
Samsung’s IT/telecom arm, for instance, today manages a
5,000-dealer network with a staff of only 15 people. "Without such a
network, it wouldn’t have been possible for us to manage with such a thin
staff. It’s not just convenient, but also keeps our manpower cost low,"
says MS Bhalla, business manager, Samsung Electronics India Information and
Telecommunications. Fortunately for Samsung, all its distributors were IT-savvy,
but even in cases where all the dealers are not online, automation of even a
fraction of transactions can be useful. "I can’t afford to wait till all
my business contacts get e-enabled. Even if 10% of them are online, I feel it is
worth the effort," says Sethi of Ranbaxy. Also if you expect revenues right
away, it’s probably the wrong model. "We can’t expect revenues to come
immediately, but we can certainly be prepared for the future," agrees
Rajesh Uppal, IT head, Maruti.
Not without risks
Even though projections appear optimistic, enterprises need
to be more realistic in their approach. E-business is not risk-free. One cannot
expect dramatic results at least for some time. It may not be difficult for a
large enterprise to invest a few lakh rupees without expecting immediate gains,
but for the smaller enterprise it won’t be that easy. The Nasscom study has
found that for the SME sector, some of the concerns with e-commerce revolve
around fear of eroding their existing customer base and technical issues arising
out of lack of computer expertise and the cost of necessary hardware and
software.
Security is another major concern with all enterprises,
whether large or small. "E-enablement has certainly made companies more
vulnerable to risk. They have started investing heavily in new technology,
without having their security measures in place. You can’t afford to wait till
the damage is done," warns Neel Ratan, head, operations and risk
management, PriceWaterhouseCoopers.
Moreover, the opportunities unleashed by the Internet cannot
be fully exploited in the absence of an adequate physical infrastructure and
bandwidth. The online activities will remain restricted to exchange of
information and will not translate into actual business transactions till the
payment issues are addressed. Although the IT ministry has been working on cyber
laws, a number of regulatory norms are yet to be tackled. Even after the
mechanisms are in place, businesses will take time to get rid of their legacy
systems and adapt to the new economy environment. There is no doubt that the
e-enterprise has arrived and is here to stay, but it will take time before
e-business can really take off in a big way.
SHWETA VERMA
in New Delhi