Editor's Page

Dec. 21, 2004
Your guide to e-commerce failure

Every manufacturing CEO I meet is trying to figure out how to turn his or her company into an e-business, if only to bump the stock price (and his or her options) into the dot.com stratosphere. Yet in talking to these CEOs, I'm finding at least as many things not to do in launching an e-biz as I am best practices. A quick list of ways to make sure your e-commerce initiative fails: DO make a splashy announcement that you will be turning the company into an e-business, even as you cut funding for Internet ideas that don't turn a profit within 12 months. Even better, demand that employees generate a significant percentage of overall revenues from e-commerce within the next three years, even though you don't have a clue how that will happen. DON'T make e-commerce a significant part of your personal development and management emphasis. DON'T insist on it for your senior executives, either. DO make e-commerce a part-time job for several people, without shifting their current responsibilities to colleagues. Under no circumstances dedicate your best staff to e-business initiatives; you need them to run your core business. DON'T think broadly about how the Internet can reinvent all your processes. Focus exclusively on marketing and procurement, completely ignoring the areas of your company where e-business can make a real difference, such as collaborative product development and integrated customer management. DO keep your compensation system exactly as it is today, especially if you don't reward initiative and innovation. Refuse to offer ordinary employees a share of the savings and successes they bring to your company through their e-business efforts. After all, what kind of company are you running, anyway? A dot.com?

Speaking of building an e-business, there's no better way to reinvent your business online than by focusing on value-chain management (VCM), a discipline that synchronizes the flow of product, information, processes, and cash from raw material to end customers. Done well, VCM optimizes the profitability and productivity of the entire value chain, from the supplier's supplier to the customer's customer, and of the individual business constituents that make up the chain. This issue offers VCM help in the form of the results of IndustryWeek's value chain survey. Sponsored by Ernst & Young and compiled from the responses of more than 2,000 senior executives at firms representing all links in the value chain, the survey details overall VCM metrics as well as the best practices of firms in high-performance value chains. The survey was the result of months of effort by a team of professionals too numerous to mention from Ernst & Young and IndustryWeek. Let them (and me) know what you think of their efforts. Send e-mail messages to John Brandt at [email protected]

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