E-Business today and tomorrow (page 1 of 2)

What Is E-Business?
Hundreds of companies claiming to offer the same thing - software that will turn your company from a business into an e-business. But wait a minute. Look closer at those advertisments. One company makes a piece of software that allows customer services representatives to chat to customers online. Another makes a piece of software that lets employees buy office supplies on the web. This one makes an enterprise portal. That one sells firewalls.

Sure, all of these things are elements of what makes a successful e-business. But buying any one of them won't turn your business into an e-business. Buying all of them - and others - might, but it wouldn't happen overnight. It wouldn't even happen over a year, because once you'd bought the bits of software, you would then have to make them work together. That takes a long time, and it costs a lot of money. And by the time it was finished, you can guarantee that at least one of the companies whose software you'd bought would have come out with a new version, which would then have to be made to fit with all the other pieces all over again. It would be a complex, mutant system, which would never be finished and never quite work properly.

The term e-business has been maligned, misunderstood and misappropriated over the last few years. A firewall isn't e-business, neither is an online help center or an e-commerce storefront. E-business is the complete reorientation of a company's business - both its internal and external operations - around the internet. It's a simple idea, but people keep trying to make it complicated. What can be simpler than having one single data centre running one complete and integrated set of business applications, which everyone can access through a browser? No more incompatible software packages, no more isolated pools of data, no need to install a new data centre here, a new departmental server there, no more uncontrollable IT admin costs.

Save, Don't Spend
E-business is about saving money, not spending it. Buy all the different bits of software from the magazine advertisers, and you generally end up spending 80% of your IT budget on integrating all the pieces together. This is not what e-business is about. It's about simplifying and centralising IT operations for more efficient business. It's no secret that Oracle saved $1bn internally by doing just this, but we've seen plenty of other organisations doing the same. The UK National Health Service, for example, is currently replacing a staggering 67 separate personnel and payroll systems with one single system that will manage all of its 1.2 million employees . This means that the NHS will know for the first time where all of its employees are and what they do. The Department of Health estimates that the new system will save £400m, which can be channelled straight into frontline patient care. When your data is all locked up in little parcels here and there, distributed throughout your company, not only is it difficult and time-consuming to get a global perspective, it's also a very big waste of money. Centralising IT systems on an e-business model can save huge sums that can be much better spent elsewhere.

Automated Economies
That's the beauty of e-business inside the enterprise. But what we're seeing now is companies extending e-business outside of their own operations to encompass their customers, their partners, their suppliers, their suppliers' suppliers and so on - what you could call a company's whole economy.