Long Live E-Business - It's Working!

by Ayman Abouseif, Marketing Director, Oracle Middle East and Africa.

To paraphrase Mark Twain, however, the recent reports of the demise of e-business have been mostly inaccurate.

First, discerning readers should note the important differences between the wave of failed dot coms, about which much has been written, and the true e-businesses that are continuing to succeed today.

The simple fact is that no organization can thrive today without a sound business model, regardless of the level of its hype and investor confidence. In the majority of cases, the dot coms that failed did so because they lacked a viable and sustainable business model, not because of the Internet, or technology, or the concept of e-business itself. Disgruntled investors, dismayed at their lost capital, were quick to place the blame unfairly on e-business rather than the lack of business model.

A recent report by GartnerG2, a new research service of Gartner Group, warned companies not to ignore e-business because of widely-reported dot com failures, calling avoidance of the Internet a "potentially fatal mistake."

GartnerG2 also highlights the possibility of misunderstanding the lessons of the dot com shakeout as another key vulnerability for businesses. "It is true that some companies misapplied the Internet, focusing only on price, while others rushed into ill-advised partnerships and some had no business value at all," GartnerG2 said. "But it's a serious growth trap to dismiss the dot com experience without learning from it."

Another important distinction is just as all dot coms are not true e-businesses, so there are many e-businesses that are not dot coms. Would you have guessed that a company like Emarat is really an e-business? Or that LG Electronics is also an e-business? The first of these examples, Emarat, is using e-business models and solutions to connect its entire network of convenience stores online. In partnership with Oracle, Emarat has streamlined its entire business process, integrating its stores with its back-office operations, and is looking forward to achieve same serious savings and increased efficiencies.

LG Electronics' e-business strategy in the Gulf has more of a dot com flavour, but it's a strategy backed up by a solid business model. The electronics giant has both a B2C and B2B website that enable LG's more than 60 partners, as well as customers throughout the Middle East and North Africa, to finalize orders, check the status of stock, request service, and obtain real-time account data, all on a round-the-clock basis.

The greater irony about dot coms and success e-businesses is that although their customer-facing side utilized the Internet, many dot coms had very large manual processes in place behind the scenes, and this cancelled out the time and cost saving elements of e-commerce. Similarly, many successful e-businesses are more "traditional" companies like GE and Boeing, which capitalized on the Internet either internally or through dealings with partners and suppliers rather than directly with customers.

This "behind-the-scenes" e-business strategy is one of the ways that Oracle itself has become a powerful example of successful e-business. The company has saved more than one billion dollars in one year by "eating its own e-business dogfood" and utilizing the Internet to streamline its business globally.

Oracle's financial results over the last six to eight quarters accurately tell the story of how positively Oracle's e-business transformation has impacted its earnings. Recently, the company released its Q1 2001 earnings, and while Oracle did not beat its Q1 revenues year-on-year, it did actually increase its profits because of the inherent efficiencies in its new e-business model. Oracle's own transformation proves the beneficial effect that e-business brings to an organization's bottom line.

So the next time you read or hear about the death of e-business, especially in the context of the dot com shakeout, remember that e-business is alive and well. In fact, it's working beautifully for companies in the Middle East today, and it can work for your organization as well.