A working definition of e-commerce would describe it as the conducting of business activities using networking technologies and in particular the web. Even though e-business might still be considered as a new field, any Internet company with no real world business experience such as having experienced management team, physical presence or efficient processes capable of making profit, is hampering its chances to succeed. The real potential for succeeding on the Internet is by having a well thought out plan and a good definition of your business model. Here are a few issues to consider when planning your e-business.

Self Diagnosis

Decide what is your value proposition? What capabilities needed to create rich user experiences? How do your business differ? Can you challenge industry assumptions to create innovative product and come up with news ways of doing business? Is your plan flexible and adaptive enough under current market conditions as well accommodating future trends?

Know your Competition

Know their product, their budget, their value proposition, their costs structure, their strengths and weaknesses. The more you know about your competition, the better you can develop your own business.

Choose a Narrow Focus

Select excellence among the following:

1. Service: give superior value to a small target niche market and make a concerted effort to serve them well by anticipating customer’s needs. Principles: self-service, relationship marketing and value.
2. Operations: provide quick, error-free and cheap services or products. Principles: customised solutions and meeting customer expectations, outsourcing, speedy transactions and effective use of resources to reduce operating costs.
3. Continuous Innovation: push performance boundaries, which results in product leadership. Principles: risk oriented, acquisition of new products, culture of innovation, market education and constantly delighting the customer.

Reverse the Value Chain

You reverse the value chain by understanding customer needs and making them a priority. Decide what they need and then make it happen. “In an outside-in approach, the strategy revolves around the customer.” (Kalakota and Robinson, 1999)

Decide on a Business Model

Simply put, a business model is the method of doing business by which a company can sustain itself—that is, generate revenue. It should include a statement of the organisation’s direction, and the means to get there. It is a description of the roles and relationships between all the entities in the business’ supply chain, for example suppliers, manufacturers, partners, wholesalers, retailers, and consumers. To learn more about e-business models, check out Michael Rappa’s Digital Business Models.

Furthermore, before you get going, prepare thoroughly to prevent unnecessary delays and failure to deliver visible results.

Quality vs. Price

It is important to decide how you want to be perceived by the marketplace; either as “quality” leader or as a “price” leader. Don’t confuse the audience by swapping and changing from one to the other. You can also add service into the mix but you cannot deliver all three. You will need to select two out of the three: quality, price or service.

Customer Management

“In conclusion, a customer relation is the single most decisive factor for success for e-business and subsequently must be the core tenet of an e-business model.” (Owens, 2006). In addition, trust is the second most important factor for business success. Be sure to establish trust between you and your customers and don’t abuse it.

Establish e-Community

The use of web-based arrangements to allow customers to support each other is not only good public relations move, but it also takes a considerable load off the company’s support staff. By providing users and developers with information and contacts, it builds loyalty to its brand name and promotes collaboration between its customers. Ask yourself:

• Would your customers benefit from interacting with each other and with you?
• Would their use of your product or service be enhanced by them learning from one another?
• What might you discover from them?

Relevant Affiliations

Try to obtain support from industry associations as they understand the needs of their members and you can draw on their expertise to test and build a good product. Additionally, it is better to have market operators??? cooperation than competition for resources and knowledge sharing. Any e-business developed in isolation risks being limited in its application.

Fast Changing

“The creation of an e-business is inextricably linked to the management of change.” And “In the fast-changing chaotic environment of the Internet, the controlled and regulated systems of the Industrial Age are like the Titanic” (Kalakota and Robinson, 1999). They will sink if they are not ready for the changes.

The Internet allows quicker feedback on experiments with specific strategies in a very controllable market segments. On the Internet, everything happens quicker, with higher quality, bigger transparency and quicker feedback.

Business Challenge not Technology

“…new technologies rarely change the mission or values of the organization; they just offer new ways to carry out the strategies designed to fulfill company goals.” And “Technology determines what can be offered; consumers determine what will be accepted.” (Blackwell and Stephen, 2001). The technology is only there as a support tool to improve your business. Do not concentrate on the technology only and choose it carefully for good IT governance.

Select a Good Project Manager

A good project manager will keep the project moving forward and on track. Clear and effective communication, developing trust, support and good interpersonal skills are paramount for project success and team collaboration.

Know your Team

It is not good having a great idea if you do not have the skills or knowledge within your team to execute it. Make sure you can cover all the bases within the team. Lock in key roles and responsibilities—basically who will do what by specifying respective roles and associated contributions.

Develop Detailed Project Timeline

Without a plan it is impossible to measure progress and ascertain whether you are on track. Develop a well-documented project plan complete with timelines, milestones and performance indicators for each of the key project members as well as associated budget. It is important to document progress and communicate this across the team. It also gives you an excuse to reward your team when reaching a milestone.

Establish Sufficient Funding

Voluntary contribution is insufficient to maintain commitment and continuity. Don’t forget to develop a contingency plan to ensure adaptive path and appropriate resources to be able to continue with your project.

Closing Words

E-businesses have the advantage of not being bound by physical or geographical locality. Furthermore, the threshold to start a new e-business is a lot lower. Most of the time, as a minimum you will need a good idea and a computer. This still does not mean that it will succeed without good preparation but in our virtual world, the sky in the limit.

Resources:

1. Australian Government Department of Communications, (2002) Information Technology and the Arts, Guide to successful eBusiness collaboration
2. Blackwell, R.D. and Stephen, K. (2001), Customers rule: why e-commerce honeymoon is over and where winning businesses go from here, The E-volution of Commerce. New York, Crown Business, Ch. 1
3. Chaudhury A., Kuiwboer J., (2002), E-Business and e-Commerce Infrastructure Technologies, Supporting the E-Business Initiative, Boston, McGraw-Hill Irwin, pp. 3-36
4. Kalakota, R., Robinson, M., (1999), e-Business: Roadmap for Success, Addison-Wesley
5. Morath, P., (2000),Know your competitor in Success @ e-business: profitable internet business and commerce. London: McGraw-Hill, Ch. 5, pp. 79-96.
6. Owens J. D., (2006), Electronic Business: A business model can make the difference, Electronic Commerce, Management Services.
7. Rappa, M., Business Models on Managing the Digital Enterprise, (accessed on July 16, 2007)