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Net plans need strategy first and technology second

Autor Ryan

I recently received a lovely brochure from a major telecommunications company, trumpeting the fact that they offered “the ‘most complete suite of services for business ready to integrate the Internet into their corporate activities.’”

The only problem with the brochure was that it focused only upon the technical aspects of the Internet — i.e. how this company could help business with connectivity, software, hardware, security, Web site hosting, networking management, training and other issues. I look at the brochure several times — but could find no mention of how this organization “could help in the design of an Internet strategy which makes strategic business sense.”

Think about this brochure, and look at the many Internet advertisements and other brochures that you see on a regular basis. What is amazing is that most of them, when they trumpet business strategy, tend to focus solely on the technology! And look around at the Internet projects happening all around you – many seem to be all about technology, not business strategy.

Combine these observations with the fact that a lot of people are predicting that we are going to see, throughout 1996, a management backlash against the Internet, due to a perception that it is not living up to its promises in terms of business opportunity.

Well, its no wonder we might see a backlash! We have a bunch of people running around dealing with Internet technology who haven’t got a clue as to what the business strategy behind their Web initiatives should be. We have companies in the computer, telecommunications and Internet industries who can’t seem to talk about business strategy at all, organizations that push product without any thought to the fundamental business problems that we should be using such technology to solve.

We have a bunch of computer geeks, talking geek stuff, to a bunch of management people who are pleading for someone to talk buiness strategy! What a strange state of affairs!

It’s a problem that has really been bugging me as of late. As an example, I was recently the featured keynote luncheon speaker for the national roadshow of a leading hi-tech firm, concerning the topic of the business of the Internet. In my talk, I focused on what I believe are some of the questions that organizations should ask of themselves if they really want to take advantage of the Internet.

The first question you must ask yourself is this. How can your organization achieve some type of achievable, and hopefully sustainable, competitive advantage by extending the reach of its computer systems to those of its customers, suppliers and trading partners through the Internet? Obviously, in the short term, this involves developing applications to support customer interaction, marketing, support and education through the World Wide Web and e-mail. Yet, in the medium and longer term, it involves using the Web to allow the customer to interact directly with your own information systems. In essence, you want to develop systems that permit the customer to inquire, update, and order product directly from your own information system – systems that will make it difficult or unattractive for the customer to do business elsewhere. That’s a strategic decision.

The second question — how might we achieve significant cost savings and efficiencies in the relationship with our customers and suppliers through use of the Internet? To many people, banks have taught business one key fact in the last decade — it pays, significantly, to get the customer to do the work. Think about what banks have done with automatic teller machines — the customer does the transaction, rather than an expensive human resource — and in some cases, the darn customer pays to do the work!

The same style of thinking should apply to the Internet. Organizations that approach the Internet from a strategic, not a technical perspective, should ask them the question, “how can we re-engineer the business relationship with our customer/supplier/other parties using this technology? Where are the current problems in the current relationship, in terms of too much cost, inefficiencies in processes or excessive lead time, that we might solve through the use of the Internet as a link to our customers?”

This style of thinking leads to the realization that there are huge opportunities to re-engineer the customer relationship through the Internet. Permit a customer on-line account access, instead of a sending them an expensive monthly statement. Reduce the cost of order processing, by providing direct query capability. Decrease the reliance on expensive call centre costs by permitting Web based interaction. Provide more electronic brochures, less paper.

Organizations should really be dealing with these issues before they run around to deal with all the marvelous Internet technology that is out there. Strategy first, technology second. Get the Internet into the boardroom, and out of the I.T. department, and maybe organizations can begin to make some real progress.

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