Electronic Commerce in the Web-Empowered Enterprise

With the evolution of the Internet into a universally accessible totalBusiness-communications network, we are witnessing an eventmore powerful than any since the invention of the telephone. Thisreflects the broad scope and deep influence that the Internet willhave on the way we manage our businesses, present ourselves tocustomers, interface with our trading partners, and relate to ouremployees. Designing an Electronic Business involves the totalremaking of the enterprise as the Internet pervades its every formand function. And it then involves the total transformation of theway that we conduct trade. As we will demonstrate in this chapter,there is plenty of evidence that the change has begun.In mid-1997, United Parcel Service (UPS) claimed to haveimplemented the largest business-to-business electronic commerceapplication to date. The company converted to electronic managementits 60,000 vendors who collectively generate 7 million invoicesannually. By October 1997, General Electric's Internet-based procurementsystem had been used to purchase more than $1 billionworth of goods and supplies. During that same year, three companies,Cisco, Dell, and General Electric were responsible for $3 billionworth of Internet-based electronic trade. In mid-1998, whole industries were creating electronic-trading communities, extendingaccess to networks and services across the boundaries of competingcompanies. The Automotive Industry Action Group (AIAG) plans tolink the big three U.S. automakers with their suppliers, dealers, andother participants in the supply chain through the AutomotiveNetwork Exchange (ANX).

This Extranet is expected to result in cost savings of over $1 billion annually when all levels of suppliers in the industry are connected. Its most dramatic effect, however, may be its ability to facilitate cooperation between competitors in a way that has not been achieved before.Web-Empowering People and ProcessesThe term "electronic commerce" (e-commerce) is used to describethe automation of the processes by which we conduct trade. Thechallenges of e-commerce are many. Although it itself is not new, eCommerce on the Internet (ECI) is uncharted territory. Its commercialusers are its pioneers. This is not a role that most companiesrelish. Business executives are faced with a choice; begin to embracethe Internet now and risk its uncertainty, or wait until its impact isproven. We support starting now We believe that any enterprisethat plans to remain commercially competitive in the first decade ofthe next millennium must become Web-empowered. This requiresthe strategic integration of the Web into the business process atevery place in the enterprise where the Internet can touch it. "Thecorporation must become Web-Centric," says Steven Ward, Chief Information Office of International Business Machines (IBM), whois in charge of the mammoth task of converting IBM into an electronicbusiness. "You need to have faith. You must make a businessdecision that anything you do from now on will be Web-Centric."'The irony is that the Internet was not built for the job. It wasnot designed for commerce, but for free and easy communicationsbetween academics and researchers. Now, we are asking it to facilitatea business revolution. The question is whether it is up tothe task.This chapter will investigate the opportunities and the pitfallsof e-commerce. It will conclude that it is not the Internet Network

per se that is important, but rather the technical standards and business practices that will be built upon it. The vision is one of the globe cocooned in a virtual blanket of networks of many different types and technologies, linked together by a robust set of standards that will be the heritage of the Internet and the World Wide Web. It is this set of technical standards and business practices that, if truly standardized and adopted worldwide, will provide the glue to hold electronic business together.