ComputerLink articles by Brian Pitre

7 Reasons Your e-Business Initiative Could Fail

There are several pitfalls that should and can be avoided while planning your e-business initiative. Understanding and avoiding the following seven can prove to be most critical in insuring the success of your e-business initiative.

Believing that your e-business initiative is an end to itself

If you believe that you are going to build an Online catalog that will be separate from your normal business, then you have missed the most essential point. E-Business is impacting all businesses in dramatic new ways. A successful e-business initiative requires you to examine your entire business and change many of the old ways of doing business into new ways over the Internet. The Gartner group sums it up with the statement: "The Web already has the potential to replace rather than simply supplement traditional methods of conducting business."

Not having business goals that are clearly defined from the beginning of the project

It is essential to an e-business initiative to understand the business goals up front as key measurement for the project. Business goals should be limited to a few high-level objectives, such as "obtaining incremental sales" or "providing Online customer support". Also, when planning the project it is important to measure your features and functions back to these business goals. One way of determining what your business goals should be is by answering the following question: If we were one year in the future looking back on this initiative, how would we measure success?

Not having a clear under-standing of the technologies required for fulfilling the business goals

The Internet has brought about a multitude of new technologies that are bursting on the scene daily. One of the most difficult issues is understanding all of these new technologies, what their purpose is, and selecting the appropriate ones to support your e-business initiative. The Gartner Group predicts that 75% of e-business projects will fail because of a lack of understanding of technology combined with poor business planning.

Building systems that are not flexible enough to incorporate new technologies

"Internet Years" is a common reference that implies that there are seven years of technological change occurring on the Internet in each calendar year. Unlike previously, where systems were thought to have many years of lasting value, e-business initiatives on the Internet are subject to change in just a matter of a few short months. Therefore systems supporting your e-business initiatives must be flexible to accommodate new technologies quickly and easily. Further, it is difficult to expect a single software vendor to provide everything needed as this rapid change occurs. The best approach is to build a modular design that can add and replace modules within a system to easily accommodate the rapid changes needed to stay technologically competitive.

Not being aware of your competition and especially the new competitors entering your markets

Too often companies look at their classic competitors and use them to gage their benchmark of competition. However, it’s not your classic competitors that should be your greatest concern, but rather the new dot-com’s entering your market. Dot-com’s have a competitive advantage because they lack the business legacy of existing competitors and usually are out to change the "value proposition" in your business model and marketplace. For example, do you think that

Barnes and Noble saw Amazon.com as a competitor before they entered the marketplace? That certainly was not the case and brought about the cliché "don’t get Amazoned!" Clearly the new dot-com’s are the biggest threat to your e-business initiative and it is vital that you pay attention to them.

Overlooking the cultural impact of your e-business initiative

The typical changes a company has to implement along with an e-business initiative are 30% technological and 70% cultural. Examples of cultural changes that can occur include the sales force feeling threatened or the customer service department may feel as though a Web site is replacing them. Corporate cultural buy-in of the e-business strategy should be developed in parallel with a revamped sales strategy that could include sales commissions paid for orders taken over the Internet, etc.

Insufficient marketing support for a new e-business initiative

Treat your e-business initiative as a start-up business operation. Launch your initiative with a fully coordinated marketing program to let the world know that you have launched your e-business. A rule of thumb is that whatever you spend in infrastructure and development costs on an e-business initiative should be multiplied by 2X, 5X, or even 10X to figure the amount of money you should spend on a marketing program. In today’s marketplace it is increasingly difficult to get your e-business site noticed when there are so many other Websites out there. The marketing program you create should use all forms of media, both Online and offline. One great technique is to launch you initiative with a direct marketing program that announces your site to both current customers as well as new prospective customers. The importance of marketing your site cannot be overstated and should be planned as part of the overall budget to insure success.