August 2001 - eBusiness in Today's Turbulent Times
eBusiness in Today's Turbulent Times
This month we offer three guest authors who are thought leaders for current business models such as eBusiness, eCommerce and eMarketing.
Taking Care of eBusiness
by Thomas M. Siebel, co-Founder, Chairman and CEO of Siebel Systems Inc.
What issue — more than any other — keeps today's CEO awake at night? Competing for customers.
While various forces — including globalization, deregulation, privatization and technological innovation — are converging to produce an unprecedented level of competition, the radical shift in power from sellers to buyers now presents the greatest single challenge for businesses of all kinds.
The implications of this new reality — one in which customers are firmly in charge and organizations are increasingly unable to differentiate themselves through product features, functionality and price — are profound.
The next key source of sustainable competitive advantage is the ability to deliver a consistently satisfying experience to the customer — and to leverage the demand chain by developing superior abilities to identify, select, acquire and retain profitable, loyal customers.
A passionate commitment to helping our customers succeed is the secret behind the success of Siebel Systems, the world's leading provider of eBusiness applications software.
The third-fastest-growing company in the U.S. in 2000 (according to Fortune magazine) and the fastest growing software company in history, Siebel Systems achieved an astonishing 782,000 percent revenue growth over its first five years of operation.
Today, it dominates virtually every market it has entered, spurring BusinessWeek to declare it a "Goliath" in customer relationship management.
The philosophy and techniques underlying our company's consistent ability to create unparalleled customer satisfaction and sales are described in my new book, Taking Care of eBusiness.
Drawing upon the real-world experiences of hundreds of organizations that have implemented eBusiness capabilities with Siebel Systems' help, the books also provides a framework that companies of any size, in any industry, can follow to improve employee productivity, increase revenue and maximize customer satisfaction.
There is a misconception that eBusiness simply means buying and selling products and services over the Internet. Our broader view of eBusiness focuses on the key processes that directly enhance revenue — namely, customer acquisition and retention through sales, marketing and service. This customer-centric view of eBusiness is not limited to the Internet, but rather applies to all aspects of the customer relationship, whether online or offline.
Reduced to its essence, the point of eBusiness is to leverage information and communication technologies to make it easier, more pleasant and increasingly valuable for customers to do business with your organization — in any way the customer wants — and, at the same time, to maximize the value of every customer interaction.
The first wave of eBusiness, which gained momentum in the latter 1990s, really had more to do with eCommerce than eBusiness. With "Internet mania" having now burned itself out, we are entering a second phase of eBusiness, one in which attention is shifting from Internet-centric eCommerce to customer-centric, multi-channel eBusiness.
This second wave is being lead by organizations such as Chase Manhattan, The Dow Chemical Company, IBM, Marriott, and WorldCom.
Based on the best practices of these and other leading companies, we offer the eight essential principles of eBusiness, which together provide a clear framework which other business leaders can use to design, develop and deploy an eBusiness model:
Principle # 2: Use Multiple Channels to Interact with Customers
Principle # 3: Personalize the Customer Experience
Principle # 4: Optimize the Value of Every Customer
Principle # 5: Focus on 100 Percent Customer Satisfaction
Principle # 6: Develop and Maintain a Global, Customer-Centric eBusiness Architecture
Principle # 7: Leverage and Extend the Ecosystem
Principle # 8: Cultivate an Organizational Culture Built on eBusiness Excellence & Innovation
In addition to the Principles, we use a five-step methodology that organizations can use to launch the eBusiness transformation process.
This five-step process begins with identifying the organization's eBusiness strengths and weaknesses and evaluating its growth strategy, enabling the organization to assess its capabilities and define specific eBusiness objectives.
Those objectives then drive various action plans, including: defining and managing the organizational change required to support the eBusiness strategy; assigning roles and responsibilities for "virtual teams" that serve customers; implementing the required technology; and monitoring, measuring, and tracking the performance of the eBusiness strategy.
Organizations that excel at eBusiness never lose sight of one basic fact: the fundamental objective of every organization is to profitably acquire and retain customers.
Nothing about eBusiness changes that essential truth.
Business begins and ends with customers. Without them, an organization simply has no business — with or without the 'e.'
About the Author
Thomas M. Siebel is the co-Founder, CEO and Chairman of Siebel Systems, Inc. A noted industry spokesperson, Mr. Siebel is the author of Virtual Selling (Free Press, 1995) and Cyber Rules (Currency/Doubleday, 1999), which has sold more than 150,000 copies.
A graduate of the University of Illinois at Urbana-Champaign, where he received a B.A., M.B.A. and M.S. in computer science, Mr. Siebel was named one of the top executives of the year by BusinessWeek and was ranked number three on Upside magazine's "Elite 100" list.
Copyright and Permission
Article adapted from Taking Care of eBusiness by Thomas M. Siebel. Copyright 2001 by Thomas M. Siebel. Reprinted by permission of Doubleday Books.
Many thanks to Thomas Siebel for sharing his wisdom and to David Drake at Doubleday for permission to use the article!
By Roger Blackwell and Kristina Stephan
Managers of most businesses today are struggling with how best to capitalize on the opportunities the Internet has to offer. Yet they know application of the technology is fraught with problems.
In order to avoid the pitfalls that e-business pioneers have suffered during the last few years, first managers must understand a few fundamental rules of creating killer e-strategies:
The e-Commerce Honeymoon is Over
Developing effective e-Commerce strategies begins with understanding the future role of the Internet in consumer and business-to-business buying. Examining the current state of connectivity and online activities gives managers a glimpse into the future of the Internet.
Three historic events occurred in the first half of 2001.
Despite the problems facing online sales and e-commerce today, not all is doom and gloom.
In fact, today all firms have to develop a Web strategy because today the Internet is an important medium in any firm's portfolio of customer-driven marketing strategies.
The fact of the matter is that the number of people using the Internet continues to grow, as does the total number of hours spent on the Internet-they may be buying less online, but they are communicating and collecting information more.
AOL, which provides Internet connections for over half of all connected consumers in the United States, is still adding customers (although at a decreasing rate). And some Internet companies are actually profitable. Also, we believe that after the holiday retail surge, total retail sales for the year are still likely to surpass last year's total of $28.5 billion.
Sure the honeymoon-days of rapid growth and irrational exuberance may be over, but all firms need to learn the valuable lessons of the numerous dot-com failures and figure out where to go from here.
The challenge for managers will be to evaluate what parts of e-commerce make sense for their particular firms or divisions.
What combination of sales, customer service, branding, product information, warranty details, investor relations, or procurement should be offered online? The answers depend on the nature of the business and the state of the marketplace.
In other words, firms have to provide the right mix of these elements based on what their current and potential customers are most likely to buy.
And there is another twist — people can examine why some firms have succeeded in the past while others have failed, understand which applications are most likely to be successful and profitable in the future, and guide their investments (401Ks or otherwise) accordingly.
In the business-to-commerce (B-to-C) sector, the firms most likely to succeed are those selling products with specific characteristics.
Look for firms:
In the business-to-business (B-to-B) sector, many firms will succeed — not necessarily those using the Internet to sell products.
The Internet is for much more than selling and some of the most promising applications are in industrial firms or business services that:
The firms most likely to succeed online are the ones that were successful before the Internet.
Why? Because they understand well how to delight their customers, and they use e-commerce to enhance their positions in the minds of customers. Wal*Mart, Target, and GE focus on offering what customers want, when they want it, and how they want to buy it.
They understand that the Internet is not a business strategy in and of itself; it is just another tool firms can use to connect with customers.
When designed with the customer in mind, online strategies can increase customer loyalty, decrease procurement and inventory carrying costs, and enhance customer relationships.
When executed poorly, they can disappoint customers and create a drain on profits.
About the Authors
Dr. Roger Blackwell is Professor of Marketing in the Max Fisher College Of Business at The Ohio State University. Kristina Stephan is Vice President at Roger Blackwell Associates, Inc., a consulting firm in Columbus, Ohio.
They are co-authors of Customers Rule! Why the E-Commerce Honeymoon is Over and Where Businesses Go From Here (Crown Business Books, 2001). Additional information and contact with the authors is available at www.rogerblackwell.com.
Copyright and Permission
Copyright 2001 Roger Blackwell and Kristina Stephan. Article used with permission of authors and Crown Business Books.
Many thanks to Roger and Kristina for sharing their wisdom and to Will Weisser at CrownBusiness/Random House for facilitating this article.
Page updated: October 05, 2013
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