Magazine article Management Today

Realise Your E-Potential

Magazine article Management Today

Realise Your E-Potential

Article excerpt

The supply chain is set to become one of the most exciting arenas for the development of e-commerce in coming years, and an area of competency that senior executives will ignore at their peril. This supplement - which is loosely based on the Ultemate new business model training programme that Accenture has devised for both internal and external use - outlines the key challenges that organisations will have to face in exploiting the new opportunities that lie ahead

Andrew Berger, partner at Accenture, has a ready metaphor to explain why companies need to connect with each other. 'If the business world was a set of airports, imagine how restrictive it would be if you were able to land only at the airport you had taken off from. Imagine then that you found a way to make it safe to fly from one airport to another,' says Berger, who with John Gattorna is co-author of the imminent book Supply Chain Cybermastery.

Connecting with each other is the essence of the complex network of interactions whereby companies in the business-to-business world sell to customers and buy from suppliers. In the past, such connections have been made in person to the salesman at the door or the customer in the showroom, over the telephone, over the fax machine and, to a limited extent, through computers talking to each other.

E-commerce changes all that. Buying and selling are becoming automated processes, carried out by your information system communicating with your customer's or your supplier's system; and every order placed or sale made will probably be one of a series of transactions with your customer's customers or your supplier's suppliers. Thus the extended supply chain becomes a series of electronic connections that not only facilitate the transacting of e-commerce but open up possibilities for an unprecedented level of harmonisation between those at different nodes along the chain, via a process of collaboration.

The supply chain is a blind spot for many senior managers and executives, but it accounts for about 60% to 70% of the transactions in any company, and a similar share of the company's ability to add value, according to Berger. As such, he believes it is where the lion's share of the gains from e-commerce will be realised.

The benefits that companies can expect to derive from e-commerce are already well known: access to a wider market, ability to provide superior service to customers and lower transaction costs, to name just a few. …

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