E-Business Software

Moving toward the virtual corporation.

E-business is becoming the watchword for a new generation of applications intended to provide a platform for helping businesses reinvent the way they communicate and buy and sell products and services. Over the coming decade, the organizational model for companies will change from a traditional structure to a virtual business structure. Today, there are no true examples of a virtual business. In the next few years we will see businesses that are a combination of several strategic partners that present themselves to customers as a self-contained entity. Products and services in the e-business space are beginning to address this new business model. Will all companies evolve this way? No, business models will primarily continue to be traditional. However, there will be many examples of traditional businesses that have a virtual flavor to their models.

To achieve success as a virtual business, organizations need to use an e-business model to provide their customers with a seamless interface to all critical back-end systems and information. In building this e-business model, organizations face the challenge of deciding which technologies to use and how to determine which products will help them achieve their e-business goals.

An evaluation of different e-business tools will help organizations understand how to quantify their technology needs based on both the level of complexity of their e-business applications and the types of customers the applications will serve. Organizations can select tools and technologies that will help them implement a comprehensive e-business strategy.

Electronic business is the technique that lets a company provide seamless interaction between itself and its customers, partners, and suppliers. E-business is different from e-commerce because many applications of e-commerce technology extend beyond transactional capabilities and include business processes, functions, and customer services. Organizations need to keep in mind that a customer or partnerıs desire to continue doing business with an organization often depends on how well its application meets the customerıs needs. Designing and implementing a sound e-business application is critical to conducting business on the Web successfully.

Organizations are quickly realizing the benefits of an e-business model because it lets them provide their constituents with value-added, customized services and immediate access to relevant information. With an e-business model, organizations can build stronger relationships and provide one-to-one marketing to their customers.

This is a critical time for companies considering using the Internet to conduct part or all of their business. Organizations need to determine what their customers are demanding in terms of e-business and then plan and implement an e-business system that will meet those demands.

Using a combination of technologies, such as Web-usage analysis tools and knowledge management tools, organizations can learn their customersı patterns and needs and add enhancements to their e-business applications that will meet their customersı ever-increasing expectations.

Letıs take a closer look at e-business using two perspectives: the complexity of the application and the audience to which the application is focused. (See Figure 1.) An applicationıs complexity and focus are two of the most important factors an organization must consider when determining the scope of an e-business project. Once an organization identifies these two factors, it can begin to select the tools that will help build a successful e-business application. (See the sidebar "Vendor Offerings," page 12.)

Level of Complexity of the E-Business Application

Organizations design and develop e-business applications according to the type of services they offer. These services can range from the low complexity of content publishing to the maximum complexity of a virtual enterprise that incorporates all aspects of a companyıs operation into an e-business model. The level of complexity of the application is illustrated in the vertical axis in Figure 1. Solutions at the lower end of the vertical axis concentrate on providing methods of publishing content for the application, whether it is for an intranet or the Internet. Solutions at the upper end of the vertical axis enable the creation of a virtual enterprise, incorporating all business functions into a seamless, global e-business system. The very upper end of the complexity axis has not yet been tapped because the tools to support it are not available today.

Organizations should consider several different types of e-business applications.

Publishing applications. The process of publishing applications includes tools that enable conversion into Internet-based document formats using HTML, Dynamic HTML, XML, and Java. Organizations with Internet, intranet, or extranet applications that are content rich and require constant and immediate updating benefit most from publishing tools. In addition, organizations with large amounts of content that can be sold to customers will benefit from choosing a comprehensive publishing solution that adds an e-business component.

Community applications. One of the greatest hopes for the Internet was that it would provide a way for companies to develop a community with customers, partners, and employees. Organizations understand that by building a forum for customers to interact more directly and personally with them, customers will feel their needs are better served. This could lead to a powerful competitive advantage for the company. These technologies can include a bulletin board area, messaging capabilities, white boards for shared discussions and shared documents, and audio and video conferencing software.

Catalog and dynamic catalog applications. Electronic catalogs offer companies a structured way of organizing a variety of data. Catalogs can range from static applications for products or services that are simply online versions of their paper counterparts to interactive, dynamic applications that combine content from a variety of sources and deliver it to users in a customized fashion. Similarly, catalogs can focus on information needed by internal groups (such as a sales department) or on external consumers. When considering catalog technologies, organizations need to understand what they want their applications to do.

Hurwitz Group believes it is important that e-business applications reflect their medium by taking advantage of the technologies the Internet offers. Adding capabilities such as transactions, content searching, dynamic page presentation based on user-defined criteria, and special, personalized agents can enhance a catalog application dramatically and serve as a competitive differentiator.

Transaction (vertical core productivity) applications. Organizations that want to use an e-business model to create specific applications for their business processes need to address this next level of complexity. These applications, which are often an extension of existing internal systems, link the systems through a browser interface to give access to a large number of users. One example is an internal trading application for a financial services firm. This type of application typically involves transactional capabilities as well as back-end database integration and workflow processes.

Business-to-business (procurement) applications. One area of e-business applications receiving a great amount of attention is business-to-business applications. This type of application lets two different organizations conduct business electronically by offering electronic versions of their business processes. An example of a procurement system, which is one type of business-to-business application, is the service that Staples, an office supply chain, provides to Boston Edison. Through this application, Staples provides Boston Edison with next-day delivery directly to the employeeıs desk.

Virtual storefronts. Organizations that use the Web as their primary method for conducting business will have applications that fall into the virtual storefront category. These applications are often a combination of one or more of the previous categories, and they help an organization present an entire business via the Web. An example of a virtual corporation is Amazon.com, which built a business model based on a complex e-business application. Since its inception, Amazon.com has grown to include several distribution centers in addition to its main administrative headquarters. These physical components complement the virtual storefront. However, Amazon.com remains the manager of the business, using its partnerships and contracts with book publishers to round out its e-business model.

Virtual storefronts must combine a number of services into one cohesive application that can be presented to customers. Publishing, messaging, catalog, and transactional services can all be part of a virtual storefrontıs e-business application. It is important to note that for the most part no single tool currently exists that can let an organization build a virtual corporation. Companies like Amazon.com have built their e-business applications from scratch. The availability of tools to build virtual storefronts are further off in the future because of the complexity of the applications.

Application Focus: The Intended Audience

An important component of any e-business application is the applicationıs intended audience. The audience will differ considerably based on the focus of the application. For example, employees are the main audience of e-business applications focused internally within an organization, also called intranet applications. The user profile of an intranet e-business application differs from the prospective and current customers that use an e-business application focused externally. Internet applications that have customers and the general public as their intended audience will have a much different structure from those with internal focus. One way in which this is true is the complexity of the user interface. While it is important to create the most intuitive user interface possible, intranet developers have the advantage of understanding the technical skill level of the applicationıs audience. Also, the ability to offer training sessions for intranet applications is a more realistic possibility than training for Internet applications.

Intranet applications. In many respects, internal e-business applications are very similar to their client/server and legacy application counterparts, with the exception of the method of interaction: an employee uses a Web browser to interact with the application. Intranet e-business applications (such as a sales force tracking application) can focus on one department within the organization, or they can be dispersed throughout the enterprise (such as an employeesı benefits application).

Extranet applications. Extranet applications can extend the intranet beyond the corporation. The audience of an extranet application differs from that of an intranet application; users can come from sources such as partners, suppliers, and valued customers who are outside the organization. Extranets also lie in between intranet applications and Internet applications in terms of security measures and knowledge of the intended audience. Ensuring the security of extranet applications is very important because an organization often lets outsiders with approved access interact with business-critical systems. Therefore, security measures beyond the firewall, including authentication and granular access control, are critical to the success of an extranet application.

Internet applications. Internet applications have a vastly different focus from intranet applications because of their prospective audience. Internet applications are for the most part public; any user with a Web browser can access at least parts of the applications. Examples of Internet applications are online retail sites such as L.L. Bean and the New York Times, which offer basic services to all public users and may offer additional services to subscribing members or customers. The security requirements of Internet applications differ greatly from those of extranet and intranet applications. Basic security in the form of a perimeter approach is essential to prevent outside visitors to the application from entering internal systems.

A Look Into the Future

So where is e-business development headed? We believe that organizations will jump on board the e-business train at different stops, whether they are virtual communities or electronic catalogs, and slowly move toward the most complex of e-business applications: the dynamic virtual enterprise. The virtual enterprise application will comprise a number of separate organizations that add pieces of their businesses to create an entirely new, virtual enterprise on the Web. Not all organizations will move to this upper end of the spectrum of e-business applications. However, those that do will combine a number of the lower-level e-business applications to create a new business paradigm. Although the virtual enterprise is still several years off, organizations can begin to implement e-business applications today that will offer immediate financial rewards.

Figure 1. The spectrum: complexity vs. audience for business applications.

Heather Ashton is an electronic business analyst at Hurwitz Group Inc. You can reach Heather at hashton@hurwitz.com.