Strategic Preparedness: A Critical Requirement to Maximize E-commerce Investments

With all the hype surrounding e-commerce, a growing number of 'brick-and-mortar' companies are rushing to capitalize on the forecasted $7.29 trillion business-to-business (B2B) Internet market. However, in their haste to reap this benet, many companies have skipped forming an e-commerce strategy in favour of rst building their Web site. Evidence of this surfaced in two studies. The Cutter Consortium found that 65% of the companies surveyed did not have an e-commerce strategy in place, and that another 25% lacked any type of plan to implement basic e-commerce initiatives (Booker 1999). Business Communications Review also found that while 33% of their subscribers had an e-commerce plan in place, 45% were still working on it, and 22% never constructed a plan (Ritter and Walker 1999). One repercussion of rst building a Web site is that it has encouraged the use of 'tentative and fragmentary' tactics, which have produced disappointing e-commerce results (Gold-berg and Sifonis 1998, Hann 1999). For example, the consulting rm of Pittiglio Rabin Todd McGrath and Sales Marketing & Management found that 7% of executives surveyed indicated their e-commerce initiatives were very successful, 61% judged their outcomes as reasonably successful, and 25% considered their e-commerce results disappointing (Campbell 1999). Howard Rubin's Worldwide IT Trends and Benchmark Report covering 16,000 information technology professionals at 6,000 companies in 28 countries also found that 85% of the companies did not see any visible returns on their e-commerce investments (Hoffman 1999). Another survey by the META Group, a market research organization, found that more than 50% of 2,000 global companies ranked themselves 3–4 on a scale of 1–5, with one being most ready to launch an e-commerce strategy. Additionally, most of these companies were developing 'reactive' versus 'proactive' strategies (E-business Advisor 2000). This paper suggests that the most effective way to maximize the return on e-commerce investments is through strategic preparedness. That is, creating an integrated e-commerce plan before launching a Web site. The justication for this view surfaced after studying the state of e-commerce and exploring the current approaches to e-commerce. To facilitate 'strategic preparedness,' this paper proposes the use of an Integrated E-Commerce Planning Process© along with a list of managerial implications to successfully launch an integrated e-commerce plan for 'brick-and-mortar' organizations. A b s t r a c t As companies rush to capitalize on e-commerce, management often skips any form of strategy development to first build their Web site. While …