Magazine article The CPA Journal
Companies Must Adapt to the Internet to Survive
In a short time span, the Internet has rendered many business models obsolete. Despite highly publicized setbacks for many Internet-related companies, the broad category of web-enabled business models continues to advance.
The success or failure of local and global businesses may be determined by how well they adapt to the new electronic business paradigm. Factors such as timeto-market, customer retention, and operational efficiency will define the chances for survival, and customers will control the value chain for just about every product and service.
The emergence of electronic commerce will lead to the convergence of technology and products, less-predictable customer demand, shortened product life cycles, and price transparency. To meet these challenges, businesses must improve operational efficiency, report channel activity on a real-time basis, and build strategic partnerships and alliances.
The process by which a company implements these changes and acquires e-business capability is often called a digital transformation. On one level, digital transformation encompasses the conversion of all information-text, images, audio, and video-into digital formats that can be exchanged, stored, and indexed. Digital transformation also means profound changes in the very structure of business operations.
The transformation process involves the four Cs:
Commerce: how businesses conduct transactions;
Content: the information businesses use;
Community: the people that businesses interact with; and
Collaboration: how a business interacts with those communities.
The process also encompasses two small Cs: cost and culture.
To fully realize the benefits of speed and efficiency that Internet-enabled operations offer, companies must integrate their value-added partners and suppliers into an e-business system (community and collaboration), while the customersupport system moves information (content) online. As this happens, the enterprise should expect to sell more goods and services via the Internet.
Many companies are concerned that a transformation into an e-business means having to replace their entire employee base. In fact, if employees are willing to embrace change, they may be trained to handle the new operating modes, and management can decide how to implement that changeover. …