SMM  Strategic Marketing Montreal

[Newsletter #16a]

Money-saving News on E-Business

Within the past days, some important information has appeared about E-Business, which you should be aware of. SMM Newsletter #16 appeared on April 10. By chance, it dealt with the very same issues. It's not required pre-reading for what appears here. However it does expand on some of the themes.

The Industry Canada Strategis Newsletter of April 11, 2002 noted an interesting business supplement from the Canadian E-Business Opportunities Roundtable. This Government-supported booster of E-Business said that SME's (Small and Mid-sized Enterprises) in Canada were far behind their US counterparts in adopting E-Business. The theme was that SME's must bite the bullet on cost in order to get the productivity gains that come from E-Business and the Internet. For the record, the co-chairman of the E-Business Opportunities Roundtable was John Roth, ex-CEO of Nortel.

Then on April 16, MSI hosted a webcast with Jack Welch, ex-CEO of GE, who discussed the role IT had in transforming GE's business and production processes. Welch is very strong on using the Internet to outsource company functions to improve productivity. As Welch said, "outsource the hands, keep the brains".

It is true that the Internet can improve productivity on key company operating functions. But it may well be expensive and is not always risk-free. It is a coincidence that the same day's headlines had distressing news on both the flagship companies of the two ex-CEO's cited above. Nortel is selling nearly 4000 lots of surplus computer and office equipment on the web. It had to play hardball to get a $ 1.175 billion US credit line extended, given its $ 5 billion US debt. GE plans to eliminate 7,000 jobs this year at GE Capital as it seeks to cut costs by $1 billion at the financial services division. In both cases, analysts suggest that these companies' problems are linked to their aggressive use of financial resources, rather than their E-Business initiatives.

As Michael Porter, the strategy guru, said in SMM Newsletter #16, improving operational effectiveness is a no-brainer. But before improving operational efficiency, you must look at strategy first. Thankfully, improving Internet strategy may not involve you in major expenditures. Indeed, it may mean that money you intended to spend anyway is many times more effective.

The strategy implications of the Internet must consider:

Buyers and sellers now have a fundamentally different relationship because of the Internet.
Your competition may well be exploiting this already.
You must develop your competitive advantage for your target customers in this Internet age.

Once the strategy is defined, then your pro-active program to contact new potential customers and to maximize your sales to existing customers will be very much clearer and much more effective.

Unfortunately, Internet technology is complex and costly. Time is of the essence because things move faster with the Internet. Yet you need to be fighting all the other alligators, which may chomp away at your company's results. An experienced, connected and savvy executive can help refine your company's Internet strategy.

If you wish to use this approach, SMM will be happy to work with you. Our help can be configured to meet exactly the needs you have. Our strengths, experience, creativity and practical common sense can complement those of your company. So write us a Fast Message today, , on what you're looking for.

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