E-Commerce & Imperatives for Business Survival and Success

• Global e-commerce revenue now reaches nearly $50 billion dollars, with an estimated $200 billion in revenue by the year 2003. Other sources estimate that the $200 billion mark could be hit in the next year.
• In 1998, businesses spent 1.9 billion dollars advertising on the Internet, while only spending 1.6 billion on traditional outside-public advertising.
• According to Active Media Inc, most business to business (hereinafter "B-to-B") commerce sites are turning a profit within three years, an additional 27% turn a profit from B-to-B commerce activities within twelve months.
• First year B-to-B sites realized on average $94,000 in 1998. B-to-B sites established for three or more years took in $30 million on average. That amounts to an extraordinary 30,000% increase.

The value received from using Internet technology in business planning is both sweeping and multi-faceted, from improved internal communication and business to business relations, to more efficient customer relations and human resources channeling. Marketing and sales on the Internet comprise an essential correlative of such benefits, with more honed direct marketing possibilities and better ends-means convergence for marketing campaigns. The Internet further enables a company to achieve all its essential functions with both ease and comprehensiveness. Connectivity is truly realized. The result is dramatic improvement in efficiency, cost-savings, unparalleled access to real-time data for analysis and decision-making, superior inventory management and progress in business relations. The list of benefits is extensive:

• Effective Marketing and Sales
• Improved Efficiency
• Supply Chain Management
• Real Time Data Retrieval and Decision-Making
• Better Planning
• Unparalleled Execution
• Control Systems
• Resource Management
• Cost savings
• Customer Responsiveness
• Ease of Use

The importance of the Internet to solid business strategy is readily apparent for virtually all business-minded executives and companies. As Newsweek appropriately wrote, every CEO "now knows that job No.1 in the firm, no matter what the company does, is to figure out how to become an Internet company, because he can be damn well sure that his competitors are." In effect, in the next two years it is estimated that Internet based e-commerce will amount to 42 percent of a typical company’s revenue. Within three years, more than half of a company’s revenue will be generated through the web—what company can afford to allow the competition to enjoy such a prized commodity, while losing out on the opportunity itself?

The beauty of implementing a business-to-business solution may be plainly cognizable and, yet, vision alone may prove insufficient for many companies hoping to enter the web-hub of commerce. As recently reported by Computer Resellers News, a publication for providers of technology and information solutions, "$1 million—about 80 percent of which is labor-related—will get a company only an ‘adequate site,’ while an investment of between $1 million and $5 million should give companies a site on par with the bulk of E-commerce sites." Because the labor and overhead costs of large Internet companies can be so high, the cost of the creating effective internet/intranet/extranets can become prohibitive for many medium-to-small companies—this can mean a significant loss in terms of future revenue and competitive health, and, even, possibly obsolescence. At least partially, the cost is a consequence of manpower and supply chain integration requirements. A good system is in fact a complex balance of inputs and outputs:

• The B-to-B Solution must complement and converge with the Manufacturers existing business processes, products, rules and systems.
• The Solution must allow the Manufacturer to quickly and conveniently communicate with its Resellers, Distributors, VARS, etc.
• Access to manufacturer data must be restricted to specific users and remain secure in transit.
• Data retrieval must be tailored to meet business demands and end-users must be able to easily comprehend and utilize information recovered.
• Intellectual property must be developed using a highly trained labor force with complex tasks in expedited work schedule.

For companies that can make a meaningful entrance into the business-to-business dimension the benefits can be incomparable. Instead of sending sales representatives on costly marketing trips or forcing clients to blindly speak with a company representative on the phone, companies can conduct electronic transactions through a network, allowing the consumer to see what you see from the comfort of their own office or home. Customers can tap into the business partner's Extranet site or submit purchase orders directly and all such information can be archived and analyzed for perfecting of business goals and policies. Clients and business partners have certain expectations about the manner in which you conduct your business both on the Net and otherwise, are you meeting their expectations? Is someone else?

Consider the impact e-commerce has had on businesses in the last few years and you will see why it's important that companies move now—if they haven't already—onto the Internet. Launching a successful e-commerce presence requires thorough planning, structured implementation and a good Internet company, but the results are without equal. What other business tool can even have the potential for effecting a 30,000% revenue increase in three years? The Internet is fundamentally and rapidly changing the way commerce is being conducted. Early entry into e-commerce gives a company an essential competitive edge, while late entry may prove problematic. Consider what it would be like to compete against someone with such an invaluable resource and then make your choice.

• Number of venture capital deals for Internet-related companies, in the first quarter of 1999: 208 Companies
• Average financing in those deals: $10 Million Per Company
• Average financing for Internet venture deals in 1998: $7.9 Million
• Estimated number of Internet users living in the U.S.: 52%

CodeGrinders builds, deploys and manages powerful Business-To-Business E-Commerce Solutions that will allow clients to migrate their business to the Internet. CodeGrinders creates custom Internet/Intranet/Extranet business solutions that free the client from the need for a webmaster.