I've just taken over responsibility for defining my company's strategy for the Internet, and I've got to deliver a report to senior management in the next few weeks on our opportunities. It's all very complicated, and I think I'm getting confused by all the e-commerce buzzwords I keep on hearing about. I've heard about supply chains, CRM, marketplaces, e-procurement, personalisation, and all sorts of different technologies that I need to think about such as iTV, Wap, security and so on. So how do I make a strategy coherent for my board, and then start implementing it, without confusing everyone else too?
Roland Hanbury, Rubus
Developing an "active" e-business strategy is a good idea. But, while you may generate some business value by responding to the "buzzword of the month" or participating in ventures such as a B2B exchange, you are likely to miss out on the biggest value opportunities, which by their very nature are unique to your organisation.
It will be easier and more effective to create the strategy by generating ideas and then prioritising them into a framework, rather than creating an abstract "vision" first. Get some sparky people in a room along with some industry and e-business experts, and brainstorm using prompts such as: "How could we apply new technologies, or a new business model" "What additional services would our customers value?" "How could we reduce our costs?" "What unique knowledge do we have that could be re-used?" Pretty soon you will have several hundred ideas, to then group into categories.
Now define your overall corporate objectives, but in more detail than just "to increase profits". Then prioritise them. This will take some discussion, but take as long as necessary to generate a reasonable consensus. Pick the top few objectives and score your brainstorm ideas list against them, namely: "How much would this idea contribute to this objective?"
Next, using technical and industry experts, you need to feed in the likely operating costs, development costs, and commercial risks. With a bit of spreadsheet manipulation, you will have a shortlist of ideas in each category which have the best value/cost ratio.
Finally, you have to stand back from the whole thing and think, "How does it hang together?" Look for synergies and a natural development path across ideas. Look for a story that is compelling and in harmony with the overall corporate strategy. Et voila! You have it. Remember though: good strategy makes hard choices about focus and prioritisation - if it causes no argument, you probably have a wish list rather than a realistic strategy.
Simon Brooks, AMS
Implementing an e-business programme can be fraught with obstacles, and a combination of factors that can lead to e-business projects failing to deliver.
Crucial among these factors is that many companies fail to set measurable objectives to assess the performance of their projects; 49% of the companies we spoke to had not developed a business case for their e-business projects. Moreover, of those companies that had a business plan, only 25% had designed a formal process to measure return on investment at the outset of the project.
E-business projects often do not have a "common" home within companies. Responsibility for projects might rest with the marketing director, IT director, or supply chain and distribution departments. This can lead to "islands of functional capability" developing where e-business technology expertise and process knowledge operate only in independent pockets around the business.
To overcome these issues, companies should: proceed with a clear plan in place; assign a dedicated and co-ordinated team to run the project - with adequate resources to assess the technology available; and evaluate resourcing well ahead of requirements and measure progress and results against expectations.
Neil Barrett, IRM
There's a deeper issue buried away in this question - that of being seduced by the sirens of e-business. The buzzwords, acronyms and the like aren't the substance of a truly good business plan; they're the decoration - but too many business plans for dotcoms have been based on little more. To explain the business to the board, consider it as a business. The marketplace is delivered via a new medium, but it isn't a new marketplace. Products are products, services are services - and good and bad businesses are not changed by the delivery mechanism. So, my advice would simply be this: Forget that you are trying to explain about an e-business; simply explain the business as a business.
Nick Maxwell, Quidnunc
The key to communicating strategy (or anything else for that matter) is to know your audience. A strategy is meant to be implemented and can only be implemented by people who understand its goals. Company board members (like most people) are not necessarily up on the latest e-business trends, but they shouldn't have to be in order to understand a strategy. Acronyms like Wap/CRM/iTV should be used to simplify communication, not confuse it.
Take these ideas that you have heard about and try to communicate them in terms of how they can affect your business. Start with the customer need or business problem and work backwards to describe how you will solve these needs and problems and the role this new technology will play. The only thing that is new is that technology has made a number of previously impossible things possible. The end goal hasn't changed.
Many words have been created to give the appearance of something new in order to impress potential clients or investors. But most new terms simply restate activities that occurred before the Internet became a household word. Businesses have been selling each other goods and services long before B2B became a common acronym. Perhaps it's time we removed the "e" in e-business - business problems haven't changed, just the means to solve them.
This was first published in December 2000