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Follow UsBANGALORE: GartnerGroup has predicted that up to 75 per cent of e-business projects will fail their objectives due to fundamental flaws in project planning. The research agency has said in a release that its analysts have highlighted the pitfalls facing organisations planning and implementing e-business strategies. Recent research by GartnerGroup has shown that many enterprises do not grasp the characteristics of an e-business, often confusing e-commerce and e-business, leading to a fundamental lack of understanding on how to approach e-business strategies.
In one report entitled CEO and CIO Alert: Five Mistakes'that will Derail an e-business Project, GartnerGroup has warned senior management of five key dangers that could disrupt e-business projects if e-business was not viewed in the wider context of the business. In the report, analysts strongly recommend that organisations appoint an e-business senior manager ideally at board level so that e-business gains and maintains focus within the enterprise.
"If you believe the current "e" hype, all e-business initiatives have an equal probability of being successful, just because they are e-business projects. This is simply untrue," comments Alex Drobik, Research Director at GartnerGroup. "Whilst there is no doubt that the Internet is changing the rules governing business, it does not give organisations a license to engage in poor planning practices. Organisations need to wake up to the complexity of becoming an e-business."
The five key dangers
According to analysts, one of the biggest basic mistakes that organisations make when implementing an e-business strategy is to completely re-design their business in order to become an e-business. E-business is not a binary switch from traditional to e-business. The key to success is Mix Management, where the traditional business model and the e-business business model co-exist, and are tailored to fit the market they address. The agency has advised enterprises to develop an e-business roadmap to be implemented in stages and to look for ways to build innovation into select processes. This way, learning from step-by-step initiatives can be used to constantly evaluate the end-point goal and adjust strategy accordingly.
Another fundamental error is organisations suspending good project management rules simply because "this is e-business". GartnerGroup has found that most projects overestimate the potential benefits and underestimate the time needed to realise e-business benefits. GartnerGroup's advice to enterprises is to carefully analyse the cost associated with each project and ensure that they employ personnel who have the requisite experience and time to devote to the effort. Only by adopting this step-by step approach will organisations be able to truly track progress and ensure that organisational barriers are not hampering project advancement.
The third point highlighted points to a belief in some organisations that technology can do all the "heavy lifting" in e-business implementation. GartnerGroup points out that despite the ubiquity of the Internet, technology is only meant to serve the business need and can at worst, be misapplied and drain critical enterprise resources. Organisations must ensure that each e-business initiative has a sound business goal at its core, with technologies being selected based on their "fitness" for the job intended. Those ultimately responsible for e-business strategies should be wary of letting technologies become too entrenched and should be prepared to replace installed technologies as the e-business product market matures. The report goes on to underline the importance of using e-business to attract new markets and customers as part of the overall e-business strategy. According to Drobik, "Enterprises that focus solely on who their customers are today will miss the opportunity to explore who their customers could be. Business plans need to be aligned to address the threat of cyber competition and explore new sources of revenue."
The final warning points to the need for companies to be alert to new competition. GartnerGroup points out there will be an increase in the rise of agile and aggressive new enterprises that have no fear of doing whatever it takes to go to the top of their markets. Drobik cautions, "A company that develops its e-business plan using a list of existing competitors runs a substantial risk of being blindsided. You only have to look at the mistakes that Barnes & Noble made in not recognising the threat that Amazon.com posed to see that." GartnerGroup advises organisations to develop a comprehensive e-business survival plan that anticipates the actions of their top competitors and embraces the radical changes necessary to beat them in this new game. A "dot.com" subsidiary or enterprise should be considered if the enterprise is moving too slowly for the e-business plan. According to Drobik, "In the past, the big ones ate the little ones. In the future, the fast ones will eat the slow ones."
*GartnerGroup defines e-commerce as, using the Internet, digital communications and IT applications to enable the buying selling process. It defines e-business as, the continuous optimisation of an organisation's value proposition and value-chain position through the adoption of digital technology and the use of the Internet as the primary communications medium.