The dotcom market looked healthy 18 months ago. A Computer Weekly/Kew Associates IT expenditure survey indicated strong growth in Internet-related spending and the SSP/ Computer Weekly quarterly IT recruitment study highlighted the increase in demand for staff with e-commerce and Internet skills.
IT executives thinking of joining dotcoms were warned that they should do so within six months and were given advice on "how to avoid duff dotcoms", such as find out how they are funded, interrogate the business model and look at the management team and its experience. Safeway's IT director appeared to take note, jumping ship to join an Internet start-up.
In a Computer Weekly/Harvey Nash Big Question, 82% of the IT managers questioned believed that a skills drought would hold up e-commerce projects.
Also in that month, car maker Ford announced savings of more than $10m (£7m) in its first use of Auto-Xchange, its Internet supply chain network. And looking ahead, the opinion writers predicted that Internet-based e-marketplaces would be the next big thing in e-commerce.
March was a busy month for UK retailers looking to flex their e-strategies. Selfridges unveiled plans to roll out an Internet-based e-procurement system. Waitrose became the first British retailer to go live with a mobile phone ordering service. And Sainsbury's announced that it expected to make savings "in the multi-millions" after implementing a warehouse and distribution software system.
The month also brought news that Barclays bank was to re-engineer its IT systems to take maximum advantage of e-commerce. Computer Weekly concluded that Barclays finally had a grasp of what the Internet means for financial services.
On a more cautious note, readers were warned about the dangers of the "frothy" world of online trading exchanges.
Worrying signs that UK companies had been exposed to increased security risks in their rush to secure an online presence was provided by the Department of Trade & Industry-commissioned Information Security Breaches Survey 2000. A disturbing 60% of the companies surveyed admitted suffering a security breach in the previous two years and only 14% had a security policy in place.
Evidence that the dotcom rot was gathering pace was provided in the disastrous flotation of Lastminute.com. And in the month that European electronics firm Philips announced the roll-out of an e-procurement system, Computer Weekly embarked on an in-depth look into "the latest e-business buzzword" to discover the truth behind the e-procurement hype.
Elsewhere, research by Internet consultancy E-Insight predicted that UK retailers' e-commerce initiatives would lose them £100m over the year, driven by investment in complex technology platforms, inefficient order fulfilment methods, unfocused marketing spend and reduced gross margins.
The arrival of the Love Bug put security high on the agenda and Computer Weekly reported that commentators were blaming "a lack of diversity among corporate IT systems".
Online fashion retailer Boo.com became the biggest European dotcom failure to date when its investors finally lost patience and denied it further funding.
Hotel chain Thistle launched its wireless application protocol (Wap) reservation service just as the Wap backlash was starting to kick in. Summing up the shortcomings of the Wap medium, Computer Weekly's e-business editor declared, "Never in the history of technology conflict can so much have been promised to so many and so little been delivered."
Although the Computer Weekly/SSP skills and salary survey found that the shortage of Internet-related skills was deepening, analyst Gartner warned IT managers of the dangers of investing in e-marketplaces, predicting that the majority would be out of business within a few years. According to Gartner, there were too many around and there was only enough space for three vertical portals in each industry.
The alarming news that only 3% of British firms had a formal e-commerce strategy came in a survey by NOP Research. And research from consultancy Shelley Taylor Associates suggested that firms in the UK and US were failing to entice customers online by offering hard-to-navigate Web sites.
Internet bank Egg was listed on the London Stock Exchange by parent company Prudential this month. This was followed by the launch of Abbey National's online bank offering Cahoot went down like a lead balloon - like the site itself, which was out of action for two days.
Waterstones looked to cash in on the popularity of online bookselling by introducing Internet kiosks in its stores. And in a bid to address a common problem of online retailing, both supermarket chain Iceland and Internet start-up Dropzone 1 announced plans to use high-street outlets as collection points for goods ordered over the Internet.
July was a big month for the banking sector, both the Alliance & Leicester and Barclays launched far-reaching e-strategies. Barclays aimed to double its profits in three years through increased outsourcing and investing in customer relationship management. The Halifax, on the other hand, was forced to postpone the launch of its Internet banking service, Intelligent Finance, just days before it was due to go live owing to performance fears.
Computer Weekly examined the launch of the largest e-marketplace for the oil, gas and petrochemical industry. Answering a reader's question in our Strategy Clinic, David Taylor of Certus urged readers to "dip a toe in the water" of e-marketplaces while a more cautious Roger Marshall of Elite described e-marketplaces as "attractive but risky".
As the Government demonstrated its support for e-commerce by announcing a £1bn effort to put Whitehall online, financial services group HSBC announced its multimillion-pound online investment. The deal with e-commerce software supplier ATG was aimed at creating personalised Web pages for about 500,000 of its online customers worldwide.
Computing Services & Software Association director-general John Higgins told Computer Weekly, "Companies have to get to grips with e-business in order to survive." But a report by Andersen Consulting suggested that governments in Europe were failing to create a suitable environment in which e-commerce could flourish.
News emerged that supermarket chain Tesco had re-engineered the IT infrastructure behind its online shopping service to keep pace with orders and help it cope with the anticipated Christmas rush. Tesco was later ranked the best online supermarket by e-commerce consultancy Gomez.
In a shake-up of its e-strategy, online airline EasyJet announced plans to scale down its call centre operation and sell almost 100% of its airline tickets online by the end of the year. And US retail chain Wal-Mart, which owns Asda, began a multimillion-pound project to improve its supply chain.
For its part, Computer Weekly was advising readers on the importance of personalisation in e-commerce Web sites and the dangers of treating customers like a mass audience.
As e-minister Patricia Hewitt was forging e-business links in India, Computer Weekly was gearing up for its E-Business Month. Readers were given a summary of B2B e-commerce, which predicted that B2B would transform the value chain in many industries, transaction volumes could be huge and efficiency volumes would force companies to co-operate.
"E-marketplaces set to crash", declared another article based on findings from analyst Gartner. And news that many UK manufacturers still lacked a coherent e-business strategy came in a report by Benchmark Research, which found that 42% of the 700 senior UK executives canvassed did not have an e-strategy.
"Get sold on e-procurement" was one message appearing in Computer Weekly, but another article was asking whether the e-exchange show-down was on the way and predicting that the exchange model would come to be dominated by the large multinationals. Meanwhile, commentators were reminding companies that "selling on the Net is not just about the bells and whistles of flashy technology. For a company to survive, it must have a brand it can sell and deliver."
Research carried out by Vanson Bourne showed that Marks & Spencer, Littlewoods and Iceland were the top three rated e-tailers in terms of usability, according to 250 online shopping virgins. But bad news for e-tailers came in the Big Question, with 55% of IT managers saying they had no intention of doing their Christmas shopping online.
As the IT industry was reacting to confirmation of the appointment of Andrew Pinder as e-envoy, worrying research from ICM showed that only half of the UK's top 1,000 companies had put in place the necessary management structure to further their e-business strategies.
In the retail sector, analyst Datamonitor announced that Tesco.com had become the world's largest online grocer. Department store John Lewis made a bid to bolster its online business by acquiring the UK arm of US-based office supplies e-tailer buy.com. And SupplyON, a marketplace for component suppliers in the automotive industry, began trading.
Whilst Gartner was predicting that e-business would force companies into partnering, the European Commission promised a "root and branch" reform of customs regulation to meet the demands of e-business. The commission proposed a streamlined system for dealing with "known legitimate businesses" to free up officers to deal with more suspect firms. It also advocated more co-operation between national forces along with more training and funding to increase IT knowledge amongst customs forces.
A report by consultancy KPMG and the Confederation of British Industry showed that e-commerce in the UK had shrugged off the dotcom crash of last year and was entering a new phase, driven by the traditional companies. Computer Weekly reported how success in the Internet was down to branding, with bricks-and-mortar companies leading the "brand backlash".
Royal Bank of Scotland announced it was to introduce an online auction system for its suppliers to cut costs and streamline its supply chain. Boots' e-business chief was warning of the importance of top-level buy-in for e-initiatives to be successful. And Tesco revealed it was testing "virtual" shop assistants in some stores to provide customers with extra product information.
The Computer Weekly/Kew Associates report showed that UK e-business spending continued to soar in 2001. And a specially commissioned report for CW360.com by analyst firm Canalys said that, although B2C commerce was growing at a fast rate in the US and in Europe, the lack of investor capital meant few B2C companies would survive. The report also claimed it was now too late to start up a dotcom.
We reported how the majority of organisations had seen no increase in revenues as a result of investing in e-business technology and exploring the view that although e-procurement was more hype than help there were still benefits to be had. The following issue contained an article claiming that nearly two-thirds of organisations using e-procurement had achieved no cost savings, based on research from Forrester.
The first government survey of UK online businesses showed that online business transactions reached £57bn in 2000, while research from IDC revealed how personality clashes between IT directors and e-business leaders were threatening to derail corporate e-strategy.
Also in the news, online banks Egg and Virgin Money stalled e-commerce initiatives, shelving their roll-out of account aggregation services amid fears they could contravene data protection laws.
Computer Weekly reported how companies that use Internet technology to empower their workforce were the real high performers and companies were urged to invest in e-training to ensure the success of their e-commerce projects. We also highlighted the importance of e-fulfilment, looked at how e-supply chain savings were more than just dotcom hype and reported how insurance companies were lagging behind in the adoption of e-procurement due to a lack of awareness, security fears and integration challenges.
As Douglas Alexander was promoted to the role of e-commerce minister following the election, new research from Forrester suggested Europe was in the midst of an e-commerce boom. And Computer Weekly readers voted the Internet the defining moment in the history of IT
In the retail sector, Tesco announced it was implementing a global sourcing system, based on a new IT infrastructure, in a bid to increase its non-food business by 30% to £3bn a year by 2003.
The company claimed the system would automatically make purchase orders based on the best deals, provide more visibility of final costs and save time as information would not have to be re-keyed in each country. Safeway announced it was shelving the warehouse-based business model of its online shopping operation, GroceryWorks in favour of the store picking model of Tesco.com.
In the financial sector, international investment bank ABN Amro developed an e-procurement package for its customers while insurance company Royal & Sunalliance announced it had spent £20m on e-commerce and customer-facing systems. Barclays said it intended to run £500m of its spending through a new e-procurement system.
Computer Weekly, meanwhile, warned that a complex maze of politics, standards and regulation was impeding e-business security while a survey by IBM's Tivoli Systems claimed that more than a half of financial institutions in the UK still did not know how to enforce e-business security.
Security was back in the news as 19-year-old Welsh hacker Raphael Gray was sentenced to three years' probation. Computer Weekly provided advice on how to become a successful e-entrepreneur. "Do your homework before you seek funds", the article urged, outlining the importance of a strong management team, carving out a "starter" niche and making sure the revenue model stacks up.
In a mixed month for the e-tail sector, US online grocer Webvan closed its virtual doors after two years and filed for Chapter 11 bankruptcy protection whilst Ocado, which plans to launch a London-wide Internet-only grocery deliver business later this year, announced it had secured a further £46m of funding. And Tesco.com reached an agreement with Microsoft to allow people without computers to shop online using Microsoft Pocket PC devices and smart phones. The company said it expected the service to generate £1.2bn of revenue in Europe within two years.
Automotive e-marketplace Covisint lacks driving force
Rather than set up their own automotive procurement marketplaces, General Motors and Ford combined their efforts with DaimlerChrysler to offer a single marketplace, Covisint. But the lack of a cohesive, joint e-strategy has seriously hampered their efforts.
The exchange has been beset with problems since its creation - not least because no one is using it. Covisint has also suffered from lack of leadership and only appointed a chief executive in April.
In a case of too many chiefs and not enough indians, the exchange has struggled to find its way and this lack of direction has resulted in an absence of awareness in the automotive industry. A recent survey of 60 component and engineering groups by Cap Gemini Ernst & Young found that only 27% had heard of Covisint.
Owing to its huge size and timely launch, Covisint still holds the dominant position in the sector but it could be in danger of losing this due its poor e-strategy. Although it has signed up Renault, Nissan and Peugeot, other manufacturers such as Volkswagen have set up their own exchanges and more could follow suit unless Covisint cleans up its act.
First in the checkout with Tesco.com
Tesco.com continues to lead the field with a business model that takes advantage of an existing brand and infrastructure. Building on a bricks-and-mortar business meant that Tesco.com could leverage its brand name and buying power and use existing channels to advertise the site. This helped keep customer acquisition costs low. Adopting a "store picking" model for selecting goods out of existing shops, instead of setting up a separate warehouse system, also proved instrumental to its success.
Adaptability is a key element of Tesco.com's e-strategy. Last year, the company re-engineered its infrastructure to accommodate the increasing number of customers using the service, which was putting a strain on its Web servers.
This redesign, which increased its order processing capacity and speeded customer access times, helped it cope with the huge rise in customers using the service last Christmas. And Tesco recently announced plans to implement a global sourcing system.
Kingfisher restacks its online shelves
Kingfisher announced it was founding a dedicated e-division last June. The retail group, which includes B&Q, Woolworths and Superdrug, set up the e-business operation to exist alongside its DIY, electrical, general merchandise and ventures divisions.
The group wanted e-Kingfisher to act as an "e-commerce accelerator" for its brands. It has a central role in the group's "3e" strategy to exploit brand advantage, extend its brands into new business-to-consumer and business-to-business markets and explore marketplaces for future investments and opportunities.
Put simply, e-Kingfisher is seen as a vehicle to increase the group's market share and to aid profitability, taking advantage of economies of scale in e-sourcing and fulfilment to help grow its online sales from £40m to £1.5bn in five years.
At the end of last year the group announced that its UK online retail Web sites were the second most popular British online retail sites.
Charles Schwab's online gains
Online trading portal Charles Schwab Europe (CSE) became the first recipient of the Computer Weekly E-business Excellence Gold Award in November 2000. While online trading was already established in the US, the UK market was relatively non-existent prior until CSE's entry in 1998. Timed fortuitously with the scramble for technology shares, CSE celebrated its millionth online trade within two years of its launch.
Sue Griffin, CSE's director of electronic channels, says that breaking into the UK market involved research into local Web use and financial legislation. The infrastructure was acquired when CSE bought Sharelink, which had already established a telephone brokering service.
As well as offering trading functionality, the site also contained complementary services such as reports from the Financial Times. Another innovation gave active users the option of carrying a customised pager to receive real-time updates on stock performances.
Amazon.com's next Web chapter
Despite losing money hand over fist since its inception in 1995, Amazon.com, the father of the global e-tailers, has refused to go away. Although it has yet to reach a profit, its survival is due to a clear e-strategy.
The success of Amazon is based on a no-frills Web site which is easy to use. The one frill is its patented "1-Click" online purchase technology that enables customers to enter payment details just once for all sales transactions.
Amazon's longevity has helped it build a reputation for speed of delivery and reliability. And the e-tailer has pursued a policy of expansion, proving to be one of the few online retailers capable of hammering home its first-mover advantage. Over the last 18 months, it has grown its customer base and market share and now claims to have more than 29 million customers in 160 countries.
The e-tailer's strong market presence has led other companies, such as bookseller Borders, to sign strategic partnerships with Amazon rather than lock horns with it.