The letter 'e', as in e-commerce, has assumed magical proportions in business, but if companies are to derive any real value from the Internet, says Winfried Bungert, department director of consultancy IDS Scheer, the 'e' needs to change to the letter 'i'.
But that 'i' does not, he emphasises, stand for Internet. What organisations need, says Bungert, is not electronic commerce but integrated commerce.
"I-commerce is simply the synergy between e-commerce and supply chain management," he says. "It incorporates the integrated customer and supplier relationships embedded in e-commerce, combining them with other sales and marketing channels."
The biggest mistake Bungert sees in companies heading for e-business - apart from not drawing up a hard-edged e-business plan - is ignoring the 'i' in e-commerce.
"In the very first stages of an e-business project you have to consider what happens to the legacy systems when you do e-business," he says.
"The information you need [to fulfil the transaction] is stored in legacy systems. If there is no interface providing that information to the Web front-end, you can't offer good services and products over the Web."
But one of the main reasons no one wants to hear this is because interfacing to legacy systems is neither cheap nor swift.
"Building the front-end of e-business is cheap - it's very low-cost to do the interface to the client. Doing the back end is expensive," says Bungert.
Expect, he warns, to spend 10% of the cost on the front-end, and 90% on the back-end. Unfortunately, there is no way to avoid spending money on interfacing to old systems. Money saved on integrating the Web front-end with core production systems will only be spent on keeping a whole lot of manual workarounds in place.
The typical e-business workaround is to translate a "yes I want to transact" click on a Web screen into an e-mail, which is sent to the corporate call centre and the transaction details rekeyed into the systems manually for the legacy systems to execute in the normal way.
What you save in interface development costs you spend on increased operational costs. "If you spin off your e-business you'll need to build up a complete second sales channel with its own IT systems which is even more expensive," warns Bungert.
Sadly, it's almost inevitable that the degree of integration between the new Web-channels and the existing operational infrastructure will be built as the familiar rush-jobs of point-to-point connections that will inevitably create another layer of unmaintainable legacy middleware.
This was first published in September 2000