According to Bill Gates, Michael Dell and Craig
Barrett (chief executive of Intel), possibly and arguably three of the most powerful men
in the IT industry, anyone who is not doing business on the Internet within five years
will face ruin. Yes, well, they would say that wouldn’t they. They have businesses
which rely almost entirely on uptake of the Internet and really really want e-commerce to
become all-pervasive. It’s in their interests to talk up the benefits and talk down
the risks.
The perils of email
The conference where the three demi-gods were talking on the same platform took place a
few days before Microsoft had to close down Hotmail because hackers who allegedly wanted
to prove a point exposed almost 50 million email accounts to intruders, malcontents and
rogues. It was unfortunate timing, for Gates et al. While they were bullishly talking
about the imminent rise and rise of e-commerce, one of the world’s most popular email
systems was under threat. The only safe businesses were those who had not relied on
Hotmail for their communications. Those still using pen and paper, telephone or fax were
safe. It was a classic reminder that although these new technologies are wonderful in
theory, they are still new and vulnerable. The insinuation was that anyone who rushes into
e-commerce risks exposing their most valuable commodity - their data - to damage. Caution
is still the name of the game.
However, email is already indispensable to most companies and many individuals. As Steve
Pendrous, UK marketing manager of mailroom software vendor Neopost says, "One in
three companies has growing concerns over the confidentiality of business email. The
situation has prompted man to re-evaluate his use of traditional post mail and the vast
majority of business documents are still sent by post." If email, a reasonably well
established and proven technology, is still invoking such doubts and fears, what hope is
there for e-commerce to reach the kind of penetration levels that Gates and his ilk are
hoping for?
Firm foundations are essential
Peter Bye, Web enablement manager for Unisys recognises that the technology that underpins
email and e-commerce needs to be robust and trusted before more enterprises take the
e-commerce plunge. He says, "The core technology required in e-commerce is online
transaction processing, and the systems need to be able to deliver continuous availability
and high performance, as well as the embedded security that people and businesses
need." Bye says that the hardware and software required for such systems is much more
difficult to find than the specific interfaces and firewalls.
There is definitely a wave of herd instinct currently passing through the IT community.
The feeling is that if companies don’t get on the Internet and start trading
electronically they will be in deep business trouble, a flame of fear that Gates, Dell and
Barrett are happy to fan. But as Unisys’ Bye says, "Any decision to use new
business channels, processes and routes to market needs to be based on sound business
reasons and be properly researched and thought through, as should any other investment
decision." The trouble is separating the ‘me too’ emotion from the cold
business reasoning.
There is already an assumption that any IT company worth its salt must have a Web site and
a Web address. Already there is a complex web of e-commerce relationships between many
vendors, resellers, integrators and their customers, but this is fairly unique. There is
no other sector, with the possible exception of the retail sector, that uses the Web and
e-commerce so widely. Bye says, "Companies get caught up in a feeling that they 'must
do something with the Internet' and already there is a view that if an IT company does not
have a Web site then it cannot exist. However this is a dangerous pressure and can lead to
more trouble and expense, and ultimately danger, than a temporary absence can."
Teething troubles
There are many problems associated with e-commerce that beginners fail to take on board.
There are issues around product delivery and support, and the dangers of disintermediation
which a manager first building a Web site for e-commerce can fail to recognise. Jeremy
Sindall, VP Europe of Interleaf adds that many early implementers of e-business solutions
have made a major oversight – the content management. "It may be very easy to
hide the fact that all your product information is out of date when you run a business in
the traditional way," he says, "but over the Internet everything is
visible."
Sindell says that the importance of intelligent and topical content, preferably which is
interactive and dynamic, is greatly undervalued. "I believe that e-content management
systems are the backbone of a successful e-business application. They allow businesses to
deliver individually tailored access to data and information in every possible format to
the growing range of pervasive Web devices, not just the PC." If this is successfully
achieved, the company engaged in e-commerce can develop true personal relationships with
its customers, suppliers, partners and employees. "It can use Web technologies to
build and improve relationships and also benefit from real competitive advantage,"
says Sindell. "Without investing in the backbone of your e-business initiative, it
will fail to deliver," he adds.
There is also a lack of awareness of the need to integrate systems, both with other
e-commerce companies and with internal legacy and existing systems. Steve Law of Lincoln
Software points out that there is a world of difference between traditional business
systems and processes, the existence of a Web site, and a fully transactional e-business
model. "Application integration is vital," he says. However, he recognises that
most firms will want to adopt a ‘step-at-a-time’ approach rather than a
‘big-bang’. "Many companies are more likely to first adopt a lightweight
e-commerce solution where a front end is manually operated or only vaguely integrated into
the rest of the business. But gradually, over time, they will extend the e-commerce into
the back office, and move from intranets and extranets to the Internet and full
e-commerce."
Market confidence
An iterative approach is desirable, according to Daniel Showering, MD of Instil, a
developer of online auction software. "And there will be a period of adjustment to
cope with Internet-centric business models," he says. One of the main ones will be to
convince the wider world, and customers who currently do business in traditional ways,
that the Internet-centric models are safe. Jane Roberts of Toplevel believes that this is
a huge task, not made any easier by bugs like Melissa and the Hotmail incident. The fact
that both have Microsoft products at their core will also cast great doubt on the
robustness and potential security of all Microsoft products. "People are still
sceptical about providing credit card details and even firms who trade together regularly
have doubts about the security of the data." She suggests a solution which locks data
fields once they have been authorised with an e-signature. But if people still lack
confidence in simple transactions involving credit cards, it is unlikely that they will
entertain the possibility of full-blown e-commerce for their businesses.
Ensuring that the reputation of e-commerce is enhanced, and the wider world trusts the
systems is incumbent on the industry and those who are building e-commerce systems now.
The trouble is that many systems are being developed which are inherently weak and will
inevitably lead to trouble. Gareth Evans, marketing director of software vendor Cyrano
says, "Anyone who deploys a site that is not comprehensively tested for
functionality, performance, scalability and security is pouring money down the drain. We
contacted a company last week that is spending $10m on marketing hype for its new
e-commerce site, but has no strategy for managing the number of hits that they are
anticipating. They had no plans to test the system before it went live."
Fools rush in
Such irresponsibility reflects on the whole industry, and the impact of a few disaster
stories will be that e-commerce, and the potential benefits for the majority, will be set
back by years. The Government has made a commitment to make every public transaction with
a government body electronic by 2008, and will also encourage the business community to
adopt e-commerce. However as Nigel Brown, e-commerce marketing manager for JBA points out,
it is necessary to support such a strategy with a programme of training and information,
and that is not currently evident. "By simply encouraging people to rush into
e-commerce, a disjointed solution is most likely to be achieved," he says. "This
will neither meet the customer’s long term requirements for trading online nor the
trading company’s long term interest in providing excellent customer relationship
management." For this reason Brown thinks that those companies who are taking
e-commerce implementation slowly at this time will have the advantage in a few years time.
"For UK Plc to become a global enterprise in the midst of foreign trading, British
companies have to accept and understand the benefits of e-commerce-based trading. However
they must ignore some of the hype and avoid being tempted to invest in graphically complex
sites, and concentrate on integrating the Web system with their business processes."
However, Richard Coppen, managing director of Internet marketing company Bluegrass
believes that ironically, UK Plc may become obsolete if e-commerce achieves its global
potential. "Although traditional business is governed by a clearly defined set of
rules, e-commerce, by its very nature, is crossing geographic, tax, employment and
legislative boundaries. Unless the UK government supports the IT industry and e-commerce
it will drive companies offshore to run their e-commerce business from Europe or the
US." That would not be good for anybody and could result in little or no protection
for end users in sourcing goods and services over the Internet.
The final bill is due to go before Parliament this autumn which should determine the final
direction of e-commerce within the UK. It needs to address the concerns of the industry
and be flexible enough to cope with the ever changing shape of e-commerce without being so
restrictive as to force companies to rethink their commitment to e-commerce. Philip
Flaxton, chief executive of InterForum believes that the Government has the necessary
commitment and understanding of e-commerce to make sure that it delivers the necessary
support to industry. "It is very heartening that the Government’s economic
advisors have made the connection between reducing inflation and increasing economic
growth and e-commerce." However, Flaxton says that there needs to be a Government
appointed ‘e-envoy’ to really drive e-commerce forward. "At the point when
an e-Minister is appointed and a senior civil servant is earmarked as the e-envoy then it
will be apparent that the government is truly taking e-commerce seriously and not just
talking lip-service."
There are several key technologies that need to mature before e-commerce can be as widely
adopted as the pundits predict. One is standardisation across systems and protocols, and
this has been made possible by the almost universal adoption of Wintel. The growth of
implementation of Windows NT and standard Unix systems is also helping standardisation
become a reality, another is the availability of high bandwidth nationwide. Roger
Rawlinson, head of business information systems at NCC services believes that
communications technology is falling into place now. "The past five years have seen
costs come down and speeds increase, and this trend will continue. High speed bandwidth is
already available on some networks, and will extend to all homes and offices."
However, Rawlinson says that there is a potential problem of expectation and consequent
disappointment. "The government, vendors and resellers involved in the IT industry
are risking promising a service and process that is more expensive and complex to
implement properly than people are led to believe," he says. "There is also a
danger that companies who invest in a Web site and e-commerce technology to back it up
promise their customers a faster cheaper delivery of product but are unable to back it up
with the systems and processes that actually deliver."
People power
However much commitment to e-commerce there is from the Government and the IT industry,
and even with deep penetration of Windows NT and 2000 into the user base, and however easy
it is to build a Web site and integrate it into the other business processes and
applications, the technology itself is not going to make widespread e-commerce a reality.
Windows cannot work miracles on moving UK plc towards becoming an e-commerce enterprise
unless the people within enterprises and government have the necessary confidence in it.
Richard Sykes, chairman of Morgan Chambers says, "The IT industry likes to talk of
‘technology driven change’ but the reality is that technology has never driven
anything – it is the people, teams and organisations that drive change using the new
capabilities at hand. If people don’t do it, it won’t happen, and Windows NT is
powerless to make it happen."
