E-Commerce + E-Business + E-Tailing + E-Everything = E-Nough

In the summer of 1958, Harvard Business Review published a seminal article written by Jay W. Forrester (MIT), entitled "Industrial Dynamics: A Major Breakthrough for Decision-Makers." Forrester argued that through the use of technology, businesses could improve their understanding and response to the dynamics of consumer behavior. He believed improvements came from using technology to support the integration of business flow. The five major flows in business, according to Forrester, were information, materials, money, human resources, and capital equipment. Forrester said the computer would help management make better business decisions by enabling a more holistic approach.

Recalling this article 42 years later, it seems to me little has changed. This obviously is a testament to Forrester's visionary thinking. However, it also illustrates just how long it takes for vision to become business reality and how much hype surrounds the Internet. Rather than being viewed as revolutionizing business, the Internet and all things "e" should represent a new phase in technology adoption and implementation. Internet shopping, business-to-consumer (B2C), and e-commerce are just channels that have emerged for moving goods into the hands of consumers. And business-to-business (B2B) e-commerce is simply communicating and sharing information among business partners electronically.

Enough With The "E"
We need to stop putting "e" in front of everything and focus on how technology can enable us to better serve our customers and grow our businesses. The Internet clearly offers many exciting opportunities, but it's still just an enabling technology. Its implementation is no guarantee of success. After all, common products still can't be delivered over the Internet. This bold new electronic "infostructure" will still need to be supported by a physical distribution infrastructure.

We need to cut through the hyperbole and ask some fundamental questions. For instance, does the amount of business forecasted to be conducted in B2B e-commerce represent incremental growth? Or, does it simply represent the transition of traditional business transactions to the Internet? I would argue that in the next five years, virtually every business transaction will be technology or Web-enabled. That being the case, how long do we keep making the distinction between business and e-business? If you ask me, e-business is not necessarily a revolutionary way of conducting business at all. In essence, it's just economic common sense and will represent "business as usual" in the new millennium. So why then do organizations need a new wave of consultants, strategies, and even a new business vocabulary? It is obvious that technology adoption and application is critical to the strategic success of any company - as it has been for the last 42 years.

Fulfilling The Vision
Don't get me wrong, I am not negating the impact of the Internet. The Internet enables information about demand to be shared and used in collaborative business practices. This information can be shared so quickly and inexpensively that much of planning as we know it today - particularly based on statistical or historical information - is fast becoming obsolete. Unfortunately, companies still seem to be bent on spending millions of dollars on planning systems that are frequently wrong. Plus, they are often ignoring execution systems that have to always be right. That will have to change.

In his article, Forrester wrote, "The next big step in management education will be the development of a basis for fitting together the many management functions into a meaningful whole." Back in 1958, Forrester envisioned technology enabling a holistic response to the dynamics of consumer demand. The unfortunate reality is that vision is still largely unfulfilled. This is primarily due to a lack of understanding that technology is merely a means to an end - an enabler and not an end in itself. We need to stop distinguishing between businesses and e-businesses. We should start focusing on applying and adopting technology to create a competitive advantage by generating customer value.

Questions about this article? E-mail the author at Richard_Sherman@exe.com.