MIS 571: E-Commerce: Business Uses of the Internet
University of Illinois - Springfield
Instructor: Rassule Hadidi
Student: Marty Timm
Topic: Business Plans for Web-based Businesses
Shi, Xinping and Philip C. Wright, “E-commercializing Business Operations”,
Communications of the ACM, Volume 46, Number 2, pages 83-87 (February
While e-business planners can look to more conventional business archetypes in order to borrow techniques, they can also benefit from more direct application of management expertise to the e-business arena. Indeed, there is a strong possibility, that greater standardization in e-business practice will occur as e-business moves beyond its infancy and matures.
This doesn’t mean that e-business will settle down, petrify and become boring. It means instead that e-business practitioners will be able to benefit from shared experiences and avoid the mistakes of others. The true excitement in e-business planning and execution can remain without the nervous tension created by ambiguity and avoidable risk.
In their article, Shi and Wright assert that e-commerce will provide prospects for new business ventures (domestic as well as international) that fundamentally transform the characteristics of competition. Organizations should develop strategies to exploit these opportunities with the evolving aspects of the competitive arena in mind.
Noting that the theory behind e-commerce management has lagged behind common business practice, the authors propose that organizations must consider what questions should be asked in order to develop their e-business strategies. They recommend analysis of the current e-commerce systems and acknowledgment of the varying levels of reliance within the organization regarding the application of organizational IT capacity and traditional business acumen in developing this infrastructure. Once a position relative to these variables is determined, plan development and implementation of the organization’s e-commerce strategy (“e-commercialization”) can be advanced as effectively as possible.
Their article then describes a two-dimensional framework consisting of: the continuum of technology-led e-commercialization on the vertical axis, and the continuum of business-led e-commercialization on the horizontal axis. The region framed by these two ranges is subdivided into 4 areas relating to the various combined levels of e-commercialization types.
Where an organization falls determines the immediate strategy to be used in order to effect an improvement in e-commercialization. Those organizations characterized by relatively low ratings on both dimensions should consider either bolstering their technical assets – if they are technology-oriented operations, or by taking advantage of technology to improve their routine business functions – if their command of a particular business domain can be considered their greatest competitive asset.
The end result is for the organizations to move further along until they have achieved proficiency in both types of e-commercialization. At this point, they will have used an amalgamation of technology and business know-how to differentiate themselves in the marketplace while refining their internal operations.
The authors follow description of the framework with suggestions for implementing the strategies and a discussion of the managerial implications. They indicate that the process of management is never-ending – the e-business must continue adapting. This involves reliance on realism rather than idealism: careful planning, an understanding of the current business environment, quantification of competitive strengths and weaknesses, and consideration of cash flow issues.
Drawing from their roots in decision sciences and managerial theory, these authors provide something that is remarkably rare today – a serious article that analyzes current e-business weaknesses and proposes a practical framework for self-diagnosis and self-remedy.
Their writing is succinct and precise without omitting pertinent details. And, they avoid both ambiguity as well as obscurity. Where they introduce terminology, they are careful to explain their meanings. Aimed at a professional, managerial audience with experience in technology-driven business, their article does not need to spell everything out simplistically. They do position the content effectively in relation to the wider sphere of managerial theory and practice. This makes the article a very positive contribution.
When developing a business plan, it seems somewhat natural that many e-business entrepreneurs and others eager to develop an e-business presence begin by considering where they want to go – what type of e-business they want to offer and what features that operation will provide. They do not usually start by considering where they are and assessing their existing strengths and weaknesses.
This article can help the e-business planner to relate reality with possibility and then, by following the proposed guidelines, generate the strategy that relates the two. If planners were to follow the recommendations of these authors, they would gain greatly from the results. They would have a complete analysis of their business proficiencies, background for developing their e-business plans, ideas for implementing and managing the plan and a forward-looking perspective helpful in working toward the continuous improvement of their organization.
I would definitely recommend this article to others. While brief, it is extraordinarily thought provoking. I think it can be a great help for anyone attempting to build a business plan – particularly one for an e-business. Because it can open the reader’s eyes to a more strategic approach to planning and assisting in shaping the formalization of an effective strategy, this article merits serious attention.
One issue that might be considered a drawback – these authors focus on the e-business as a subsidiary of an existing business. However, it is possible for a start-up e-business to use the framework as well. Every organization that forms has some history and a set of experiences behind it. These may not be corporately shared, but working to build useful awareness of these can help to unify the new business entity.
The sections regarding strategy implementation and managerial implications are certainly useful. What precedes them is necessary in order to make them meaningful. But this later material helps to clarify and reinforce the earlier information. Similar articles might provide a discussion of the theoretical concepts and offer only the scantest of practical advice. However, by connecting their recommendations to real e-business factors and describing the implications, these authors excel.
Business planning can be a challenge. For the e-business, this can be quite daunting but with recognition of their relationship to an existing competitive environment and an understanding of where they are, what they already have to offer, where they want to go, and how they can work to get there – these businesses can have a stronger assuredness of success than they would otherwise.