Electronic Commerce in the Web-Empowered Enterprise

With the evolution of the Internet into a universally accessible total

Business-communications network, we are witnessing an event
more powerful than any since the invention of the telephone. This
reflects the broad scope and deep influence that the Internet will
have on the way we manage our businesses, present ourselves to
customers, interface with our trading partners, and relate to our
employees. Designing an Electronic Business involves the total
remaking of the enterprise as the Internet pervades its every form
and function. And it then involves the total transformation of the
way 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 have
implemented the largest business-to-business electronic commerce
application to date. The company converted to electronic management
its 60,000 vendors who collectively generate 7 million invoices
annually. By October 1997, General Electric's Internet-based procurement
system had been used to purchase more than $1 billion
worth of goods and supplies. During that same year, three companies,
Cisco, Dell, and General Electric were responsible for $3 billion
worth of Internet-based electronic trade. In mid-1998, whole industries were
creating electronic-trading communities, extending
access to networks and services across the boundaries of competing
companies. The Automotive Industry Action Group (AIAG) plans to
link the big three U.S. automakers with their suppliers, dealers, and
other participants in the supply chain through the Automotive
Network 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 Processes
The term "electronic commerce" (e-commerce) is used to describe
the automation of the processes by which we conduct trade. The
challenges of e-commerce are many. Although it itself is not new,
eCommerce on the Internet (ECI) is uncharted territory. Its commercial
users are its pioneers. This is not a role that most companies
relish. Business executives are faced with a choice; begin to embrace
the Internet now and risk its uncertainty, or wait until its impact is
proven. We support starting now We believe that any enterprise
that plans to remain commercially competitive in the first decade of
the next millennium must become Web-empowered. This requires
the strategic integration of the Web into the business process at
every place in the enterprise where the Internet can touch it. "The
corporation must become Web-Centric," says Steven Ward, Chief
Information Office of International Business Machines (IBM), who
is in charge of the mammoth task of converting IBM into an electronic
business. "You need to have faith. You must make a business
decision that anything you do from now on will be Web-Centric."'
The irony is that the Internet was not built for the job. It was
not designed for commerce, but for free and easy communications
between academics and researchers. Now, we are asking it to facilitate
a business revolution. The question is whether it is up to
the task.
This chapter will investigate the opportunities and the pitfalls
of 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.