Cyber Rules: Strategies for Excelling at E-Business
Thomas M. Siebel and Pat House, 1999
New York: Currency/Doubleday
ISBN: 0-385-49412-2
"[A]t the heart of E-business growth is an interesting paradox... E-business has been built on technology, but it's not about technology. It's about the same thing that solid business growth has always been about: the satisfaction of individual customers' needs. Charles Schwab (p.vi-vii)."Reviewed by Pawan Vora
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@ the reviewer |
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Pawan Vora is a user interface designer at NexTag.com.
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Thomas Siebel and Pat House consider the advent of the Web as a watershed event - similar to the invention of writing, appearance of metal currency, the adoption of arabic zero - in that it is "an abrupt and irrevocable turning point, one that signals a shift in historical direction by obliterating an established set of business practices and replacing them with a new commercial paradigm." Don't we know it! Since its introduction in 1993, the Internet and the Web has been at the forefront of almost every aspect of how business is done. Starting with having a Web presence to brochureware sites to offering customer self-service applications on the Internet to full-fledged e-business. To use the cliché, the Web has changed everything.
And it's not surprising. According to Forrester Research, the business-to-consumer market is expected to grow from $7.8 billion in 1998 to $108 billion in 2003. Whereas, the business-to-business e-commerce is expected to grow from $43 billion to $1 trillion in during the same period. As more businesses go online, should they be doing "something" that will make them more successful online? The authors, Thomas Siebel and Pat House, outline just those "somethings" -- the Cyber Rules -- which will give these business a fighting chance of becoming successful online. To achieve success in E-business, the authors claim, you need to be aware of dual sets of rules. One set of rules that apply to all businesses (including non e-business) such as identifying target markets, assessing and meeting your customers' needs, and providing reliable service. The other set of rules, the cyber rules, is what the authors focus on in this book.
Cyber Rules is divided into three parts:
Part I: The first five years (where we've been)
Part II: On the Horizon: E-Business's Cyber Rules (where we're going)
Part III: Getting There for Here (how do we get there)
Part I describes the first five years of the e-business on the Web and demonstrate the suitability of this virtual marketplace to streamline and customize the buy-sell process (Ch 1). They show how the automation of business processes and their integration with the Net affords increases in operating efficiencies through economies of scale and economies of scope. They also explain why the "middleman" function on the Net is becoming to those of infomediaries who add value to the buy-sell process. Finally, they demonstrate how the boundaries between companies are beginning to blur with creation of electronic "marriages" and virtual enterprises. In Ch 2, Problems and Prospects, the authors identify two fundamental problems with e-businesses: data access and security. The data access problem has roots in the fact that there are no standards on how data should be categorized and displayed, which limits the marketers' and customers' ability to find the information they need. Security problem has two main aspects. From the business viewpoint, it is how businesses can secure the data so that it is not vulnerable to hacking and that business and customer data are not compromised. From the customers' viewpoint, on the other hand, the concern is privacy - that is, how they can ensure that the data they provide to conduct e-business transactions are not misused and/or used for businesses' benefits without their explicit approval.
The authors wrap-up Part I by concluding that e-businesses can't be ignored: "Increased revenues, increased operating efficiencies, lower costs, happier customers. Whatever your business and whatever your size, that's a blueprint that no savvy company can ignore (p. 94)." and conclude with the 10 lessons of the first generation of the 'Net (Ch 3), which include, for example, "Zapping" is the way of the Web, Direct traffic aggressively, Be seen at the front door, Give more than "brochureware", Think convenience, and so forth.
In Part II, the authors concentrate on the trends that will become increasingly important in the Net's "second generation." This is where the author's introduce the "cyber rules" for success in E-Business, which briefly can be summarized as:
- Focus on customers
- Focus on synchronized processes
- Focus on customer service
The authors argue that the Web is emerging as a global and quintessential business medium from what was perceived to be a medium for private infotainment. The authors also introduce the notion of "frictionless commerce" -- that is, making the shopping experience easier for consumers -- as the key ingredient for success on the Web (Ch 4). Using the success stories of Amazon.com, Preview Travel, CDNow, and Dell Computers, the authors demonstrate that the willingness to try something new and pioneering construction of new business models is probably one of the fundamental cyber rules for success in e-business giving those industries the first mover advantage (Ch 5). The authors argue that these new business models are not about technology, but about "using technology to empower yourself and your customers." Despite the potential of the Web, the authors argue against relying solely on the Web channel for success. They show that many of the successful businesses have used the Web for "prelimination" -- that is, to allow customers to gather product information on the Web (pre-shopping filtering) that can be used in making better informed purchasing decisions, which may well be implemented in a "brick-and-mortar" venue. The authors also suggest that the Web should be used for complementing rather than canceling other retail sales channels (Ch 6).
For online companies, it is also important that they include the rest of the enterprise (intranets) and extend the reach to include its business partners (extranets). The authors call such companies "para-enterprises": "A corporate communications model that weaves your front and back offices, your supplies, your strategic partners into a single, seamless, and profitable business network." Creating para-enterprises involve reengineering of internal processes, elimination of human intervention that do not add value, and an electronic coordination of "intra" and "extra" operations that eliminate the impediments to the real-time exchange of information. All the rules discussed so far enable what the authors call "customerizing" the experience -- that is, allowing the customers to have it their way. Customerizing also suggests price elasticity (different price to every customer for every product every day) and self-service (where customers are better able to serve themselves).
The emergence of e-business will also require some rethinking on part of the "middleman" and sales and marketing functions. The middleman function will become that of infomediary and digital matchmaker, who brings buyer and seller together without seeing either of them. Whereas, for Sales and Marketing organizations, the focus will now shift from sales efficiencies (to help people do more) to sales effectiveness (to help people do more better). With all said and done, the authors conclude Part II by asserting that the ultimate lesson or cyber rule for e-businesses is: service prevails.
Finally, part III is a practical guide to doing e-business. As a first step, the authors urge the managers to outline a digital strategy as a first step to ensure success of their e-business (Ch 10). They also outline the basic steps to get your business online: Registering an Internet Service Provides (ISP), registering a domain name, developing the Web site, managing the site, and measuring its effectiveness (Ch 11). To summarize, not becoming Internet-compliant is not an option for the corporations that want to survive in tomorrow's marketplace (Ch 11). And, to survive and to become successful, the companies should heed the following suggestion by the authors:
- Become technoliterate
- Be patient
- Remember your customers
On the surface, this book may seem relevant mainly for business managers and marketing professionals. Yes, it's useful for them. Yet it is also useful for anyone interested in getting involved in e-business. It offers sound priciples for becoming successful in e-business. It also will help you identify, if you are already in the e-business, what might be hindering your success online. And, as you might expect, it is those human factors issues that determine success or failure of an online presence.
[A]t the heart of E-business growth is an interesting paradox... E-business has been built on technology, but it's not about technology. It's about the same thing that solid business growth has always been about: the satisfaction of individual customers' needs (p.vi-vii).I have to warn you though. Although this book will improve your understanding of the e-business landscape, you may not find the book very insightful and thought-provoking. But as Charles Schwab points out in his foreword: "[A]t the heart of E-business growth is an interesting paradox... E-business has been built on technology, but it's not about technology. It's about the same thing that solid business growth has always been about: the satisfaction of individual customers' needs. Charles Schawab (p.vi-vii)."
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