InformationWeek

March 13, 2000

Business Relationships:
A Template For E-Commerce
Gather E-intelligence, then apply E-management strategies, and offer customers E-assurance that their data will remain private. The result: a streamlined marketplace.

By Patrick B. Stewart

Patrick B. Stewart lectronic commerce has transformed the global business environment by creating a new market. If you don't understand it, integrate it, and exploit it, your competitors-or a future dot-com-will. The challenge is to analyze how marketing in cyberspace will change your distribution channels and internal business systems, and how rapidly and effectively you can manage those changes.

In the process of helping metals companies reengineer their business from traditional models to E-commerce, MetalSite has developed a template featuring what we call the "three E's": E-intelligence, E-management, and E-assurance.

Leading business-to-business companies seek to broaden their E-intelligence about their markets, their internal business systems, and their customers' business environments. They apply strategic E-management tools to recruit and train staff specialized in customizing marketing campaigns and product lines to suit their customers' needs.

But E-intelligence and E-management can succeed only in a business-to-business environment that customers believe can protect their privacy and accommodate their human and technical needs. We call this confidence E-assurance. MetalSite has endeavored to keep our customers' proprietary information private and to anticipate advances in the electronic marketplace for their goods and services.

But don't let the ease and efficiency of business-to-business E-commerce persuade you to career into what appears to be a glittering online bazaar. Your company will not dominate the electronic marketplace unless you first complete a critical business analysis.

Jack Welch, General Electric Co.'s chairman and CEO, directed every GE division manager to "build a cannibalization strategy" by figuring out how competitors might destroy GE's profits. Welch then instructed the chiefs to restructure their business, from production to sales, to thwart electronic competition. To re-create their core industry, the GE managers had to understand the strengths and weaknesses of the marketplace.

The metals market is fragmented. In North America, the largest steel company controls barely 10% of the total market. Buyers and sellers maintain files on hundreds of production, marketing, and distribution strategies.

The metals industry mirrors other sectors of the economy. Your company can transform itself into a network that streamlines your customers' marketplace.

The first step is to develop E-intelligence by anticipating the impact of the new online market. Will it deepen the supplier base? How will a richer supply base influence pricing? How will price changes affect inventory levels and management?

Next, define the information your customers need from you as their critical supplier. You can provide rapid order confirmation, let them monitor production, and notify them of market changes that influence their sales and purchases. AMR Research, an Internet study group, urges companies to provide immediate and real-time information to their customers, around the clock. Effective managers streamline their own companies to capture and brandish all critical product and market information online. To do so, you must strap on your virtual headlamp and mine your internal business structures.

E-management begins with identifying which systems to rebuild and which ones to jettison as you convey your customers into the E-business marketplace.

MetalSite offers sellers an online showroom where they can display their products and capabilities. We offer buyers a one-click shopping mall where customers can place orders from a growing list of metal products. We make certain that customers' financial records remain confidential, even from our own managers.

By blending E-intelligence with E-management strategies and building E-assurance by nurturing privacy, your company will become a streamlined marketplace for your customers and their business clients. Any less, and your clientele may leave you in its wake as it surfs the Web for better business solutions.

Patrick B. Stewart is president and CEO of MetalSite in Pittsburgh, and can be reached at info@ metalsite.net. He was a featured speaker at the InformationWeek Spring 2000 Conference at Amelia Island, Fla. For more information on upcoming conferences, point your browser to informationweek.com/events.

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