by Grégoire Depeursinge

Why companies need an Internet strategy

Boost creativity, morale and productivity within your company

The classical way to tackle the e-Business issue in a company is to have a dedicated team handling all issues related with the Internet. This is not satisfactory as e-Commerce increasingly plays the role of innovation vector and is becoming an essential part of all company functions.

A formal exercise in Internet strategy design involving people from all functions will result in innovative and customer oriented solutions and generate sales and productivity improvements far beyond those generated by actual Internet sales.

It will also boost morale throughout the company as people get the chance to participate in the creative process.

As a rule, a new development should only be approved if it can be financed with internal productivity or improved customer service in classic channels, the e-Commerce part then representing an additional profit.

The e-Commerce function can be a powerful catalyst to boost creativity, morale and productivity in every company.

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Why companies need an Internet strategy

Boost creativity, morale and productivity within your company

e-Commerce hype? 

New business models, killer apps, revolutionary concepts, empowered consumers… The world-wide-web brings us new buzzwords everyday, but most of what we hear is about start-up firms, niche players or global companies. What about e-Business for mid-sized, well-established companies? What should General Management look for when considering the role the Internet is going to play in their commercial strategy?

The limits of the classic approach

Most companies are present on the Internet but only a few have an e-Commerce strategy.

In many cases, it is either the marketing or the IT department who have taken the initiative and taken the first steps on the web. These pioneers start with a high motivation and manage to convince those around them that the investment they ask for will be worthwhile, but they are often left alone with the responsibility and may start feeling disillusioned as they see that other departments don’t implicate themselves actively and feel that the responsibility for a certain lack of success is laid entirely at their feet. They also can hardly fail to be influenced by their own group’s ideas and vision and might unintentionally not take into account all the company’s interests or not allow their colleagues the necessary time to understand and integrate their project.

Typical consequences of this situation are as follows:

• Problems to keep the site up-to-date
• Suboptimal integration of e-Business processes into the “classical” departments, the Internet-team as an island inside the company
• New tasks cancel out the productivity gains (e.g. produce 2 catalogues, web and print, instead of one)
• Customers are offered too many options and are unable to use the product correctly
• New and often untried technologies lead to frequent system breakdowns
• Important costs are generated against non-measurable benefits
• Employees might see e-Business as a menace and work against it instead of promoting it
• Etc…

What issues should the Internet strategy address?

Originally, the Internet’s main function was to be a new communication channel for presenting goods or services to the public, but with time, web applications have started to permeate all major functions:

• Marketing: communication is still one of the important functions but it has become interactive instead of one-way, making the Internet an invaluable source of information about one’s customers and a means to mass customise one’s offer
• Sales: from communicating, the next logical step was to sell goods or services through the net, thus increasing turnover and productivity
• Logistics: informing the customer as to the whereabouts of his goods and generating picking orders directly from customer inputs on the web has become common
• Procurement: EDI, sourcing and bidding platforms, Internet as a tool to find new products and suppliers
• HR: to better communicate open positions, process applications, build a talent database, train employees
• Finance: giving customers the possibility to consult their accounts, checking for credit risks in real time

And also:

• Partnerships: enhancing your service through interfaces with complementary products
• Internal use: faster information spread, better sales documentation availability, online supplier links for availability information and faster customer order processing, access to the workplace from everywhere, etc.

Boosting creativity and efficiency as well as e-sales

The spread of standard ERP’s like SAP has more or less suppressed the possibility of gaining competitive advantage through better IT. It has also standardised work processes and, in a way, dampened creativity or rather shifted its expression towards e-Commerce, where applications are not yet standard and a good platform can still be the source of great competitive advantage. We observe that the usual innovation process has been inverted in many companies: instead of employees having access to new systems first, the user interfaces designed for the customers slowly find their way back into the company and internal processes.

If this creative drive is not serving a well defined strategy, the results can be disappointing as new developments may not be in line with the company’s goals. However, a formal exercise in Internet strategy design, involving people from all functions and representing all the stakeholders, may actually result in the design of more customer oriented solutions, leading to sales and productivity improvements far beyond those generated by actual Internet sales and at the same time, boost morale inside the company as people are involved in innovation.

This exercise is also vital because e-Business is slowly becoming a part in everything we do, not replacing the old ways, but adding a new option. This is why e-Business needs to be owned by all the company’s functions.

Paying for new developments with internal gains 

Many examples show that the idea of financing the cost of developing an e-Commerce platform through Internet sales is mostly an illusion. It always takes longer than we think! This is why every function accessible to the customer should be used internally as well and not programmed twice: after all, if the process is so streamlined that any customer can understand and use it efficiently, it is probably well designed and should be used internally as well! As a rule, a new development should only be approved if it can be financed with internal productivity or improved customer service in classic channels, the actual e-Commerce part then representing an additional profit. Finally following this rule will also ensure that everybody in- and outside the company speaks the same language.

Conclusion

Every company should have an Internet strategy and respect a few basic rules:

• Examine potential benefits for all departments and involve all the company’s functions
• Put process before technology
• Pay for external systems with internal use
• Go for top usability, e.g. streamlined, simple processes
• Integrate e-Commerce platforms with in-house systems and use the same front-ends internally and externally

This will result in better solutions and higher morale, generating more sales and improved productivity.

If you would like to talk about designing an Internet strategy for YOUR company, do not hesitate to contact Grégoire Depeursinge.