E-Commerce

Many companies view e-commerce as a tool of defense rather than offense. They feel obligated to do business on-line to protect market share, but they doubt the venture will ever turn a profit. They envy the explosive growth and extraordinary stock multiples of the pure Internet players, but they are afraid of cannibalizing their existing businesses and rendering legacy assets obsolete. This contradictory mix of skepticism and envy, fear and complacency, slows them down in an arena where the early-mover advantage is substantial and where halfhearted efforts commonly fail.

In fact, established companies well positioned to succeed at e-commerce. They possess critical assets that can give them an edge over start-up competitors. But to take advantage of those assets, incumbents need to take the offensive-and quickly. They must carefully assess their strengths and weaknesses, build on the former, and rapidly make up for the latter. And they need to understand e-commerce not as an end in itself but as the cornerstone of an integrated business system.

Enterprise Resource Planning Systems

Throughout the 1990s, most large industrial companies installed enterprise resource planning (ERP) systems-that is, massive computer applications allowing a business to manage all of its operations. ERP promises huge improvements in efficiency-for example, shorter intervals between orders and payments, lower back-office staff requirements, reduced inventory, and improved customer service. By entering customer and sales data in an ERP system, a manufacturer can generate the next cycle's demand forecast, which in turn generates orders for raw materials, production schedules, timetables for shifts, and financial projections while keeping close track of inventory.

Next

* Contributed by -
Siddharth Mohan Patnaik, B.Tech. (Electronics),
Ravulpathi Janaki, B.Tech. (Mechanical),
II Year, IIM Lucknow.