Upcoming Events
eBusiness Association
Breakfast Series,  June 28

Subscribe/Unsubscribe:
Click here to join our mailing list

Feedback:
Send your questions and comments to Brian Pitre.

The Internet… 
Enabling of Distinctive Competitive Advantage 

With all the doom and gloom surrounding the Internet lately wouldn't you like to know something positive about eBusiness? The massive fall of the dot.com's has left many wondering if and what they should do regarding their businesses and the Internet.

Many businesses have already learned to use the Internet as a complement to their traditional ways of competing by not implementing a strategy that sets their business apart from its established operations. We have now seen that Barnes and Nobles, along with other companies who had adopted separate electronic eBusiness strategies, have failed. Today, the Internet is all about doing things better in an established business and not about just doing them differently.

The failed dot.com's have been a great indicator both of what's wrong and what's right on the Internet. The biggest lesson we have learned is that dot.com's are not going to disintermediate traditional business or, better said, they are not going to take away established business practices. Second, we have learned that there are many positive tangible capabilities if we see the Internet for what it is: an enabling technology. The Internet has consistently enabled three key elements of almost any business including attracting incremental business, providing reduced cost transactions, and finally, providing low cost, enhanced customer support. All of these can be implemented at a greatly reduced cost over traditional methods.

Along with these great benefits the Internet also has had a leveling affect on business practices. It can reduce the ability of any company to establish an operational advantage that can be sustained. If Internet strategies are poorly implemented the Internet can actually make you look more like your competitors and thereby reduce or eliminate your sustainable or distinctive competitive advantage. A prime example is price. The lowest price is not always the best business objective and a business that is based solely on price advantage is short lived. Differentiation of your business from the competition is extremely important. eBusiness participants will join the marketplace with the set of services that best fits their business objectives. Businesses must focus on doing things different and better than their competitors. This has certainly been a critical factor for success in all businesses over time.

Drawing upon generic "out of the box" applications offered by third parties causes the operational effectiveness to be too broadly shared by the companies using them. In turn, this causes different companies to present the same benefits to the same potential customers. Although Internet technology can have a leveling affect, it can also provide better opportunities for companies to establish distinctive strategic positioning than did previous generations of information technology. This is key since the Internet can have a homogenizing effect if you let it, but used from the right perspective, you can gain distinctive competitive advantage. It's the ability of enabling distinctive competitive advantage that is the objective of today's best Internet strategies.

Rather than moving towards the best breed of applications, more organizations are beginning to understand that with new Internet technologies such as "application servers", they have the ability to create custom applications into their existing infrastructure. Many application servers such as IBM's Websphere or BEA's Web Logic allow integration into IT infrastructure and legacy systems. This also means that core components of their existing infrastructure do not need to be replaced, but rather only improved upon. These custom applications can support a distinctive competitive advantage unlike previous generations of information technology.

Today many businesses are beginning to understand the Internet as a remarkable cost reduction tool. With today's new set of technologies, not only can custom applications be built to support a distinctive competitive advantage, but they can also concurrently deliver outstanding cost reduction capabilities. By using Internet applications to outsource to the customer as many functions as possible in an operation, a substantial cost savings can be obtained. Outsourcing to the customer can include order processing, allowing customers to check order status, adding online customer support applications, and gaining information that normally comes through the telephone and other company personnel. These methods create a tremendous cost savings benefit and another benefit is that customers want self-service and to be in control of their own information. This typically makes them much more comfortable.

Today's best eBusiness Strategies include complementing traditional ways of competing instead of segregating them, differentiating from the competition, not being homogenized by the best of breed applications, building custom applications that support distinctive competitive advantage, and the modification of internal business cultures to allow outsourcing to the customer.

During these economically turbulent times a comprehensive eBusiness Internet strategy is more important than ever. The creation of a distinctive competitive advantage through the use of Internet technology coupled with the inherent cost savings can provide the competitive advantage to take your business to new levels of success.