Convergence of technologies is secret behind e-businesses

by David Kelleher in London

The convergence of Wireless Application Protocol (WAP), interactive TV, e-commere, e-procurement, employee self-service and portals are the building blocks of tomorrow's e-businesses.

"A successful company will be such that chooses the right building blocks and sees that there is synergy between the business and the client. Ultimately success depends on offering customer value," Ian Wallace of Unisys said on Tuesday.

Addressing a Financial Times World E-commerce conference workshop on "e-customers: The rise and rise of the customer", Mr Wallace said that the growth of the Internet was there for all to sees, statistics were not required.

"But why is this happening? Basically due to three factors. Customer demand and what is known as the four As: anything, anytime, anywhere and anyone. Customers want convenience and a good price. There is competitive pressures from new entrants (dot.coms) and "clicks and mortars" (established companies who are venturing online)," Mr Wallace said.

"However," he added, "the key issue is the convergence of all forms of technology to such an extent that the customers sees them as one single device."

The customer, he said, was always looking for increased value, and this could only come about through the transformation of businesses.

"This is the definition of e-business - the total transformation of a business, its functions, its economy. All this will ensure increased customer value," Mr Wallace explained. And it is this total transformation that many companies have to adapt to. "Traditional companies must take stock of markets changes and Internet development and move fast to meet the challenges of e-

commerce, the vice-president of United Technologies Corporation, said. "Traditional companies must change their mindset," he added.

Addressing delegates on Monday, Mr Ari Bousbib stressed that traditional companies had to move fast or it would be too late. "Traditional companies must take action now and not wait on the wayside seeing what is happening in the market. They must take a bit more risk and stop over-analysing what is going on, Mr Bousbib, adding that there were three approaches that companies could choose from.

"You can either take your present business model and improve upon it by using the Internet as a tool. Or else you can use the Internet to change your business processes completely. Finally, and what is the most risky and which few traditional businesses are ready to do, is to completely change your business model and seek new ventures," Mr Bousbib said, yet warning that seeking to go public was not always the right solution. However, getting a foothold in the e-commerce marketplace does not solely depend on a company's presence there.

"E-commerce is for real, but customers want to be fulfiled. And this can only come about if e-commerce is fulfilled," Ad J. Scheepbouwer, chairman and CEO of TNT Post Group NV said.

"Eighty-five per cent of firms can't fill international orders because of the complexities of shipping across borders," he said, quoting Forrester Research. "Twenty per cent of online purchases are delivered late, even with the relatively modest level of e-commerce activity," he added.

Mr Scheepbouwer said that to meet demand, fulfilment solutions needed to be fast, flexible and responsive.

Service providers, he said, must meet new requirements. "End-to-end logistics, flexible and multi-currency payments and a localised and superior customer service," he said. Last year over US$31bn were invested by venture capital companies in 1999. By the first quarter of this years, US$17bn had already been invested.

Ronald Cohen, chairman of Apax Partners and Co. Ltd, a leading capital investment company with over US$7bn in institutional funds, said that the Internet had attracted a huge amount of venture capital and although Europe was still behind the US in investments, the phenomenon was not limited to the US alone.

"Although figures for 1999 are not available, venture capital investment in Europe will be substantially higher than the US$1,253bn reported last year," Mr Cohen said.

He said that markets were already global and today's trends were not the same as during the PC revolution. "The Internet revolution is much faster. Today, people are thinking globally and acting locally," he said.

While investment over the past two years has focused on infrastructure, software and services, content and retail/commerce, "the next few years will see investment being focused on the convergence of old and new economy, media convergence and new infrastructures," Mr Cohen said.