Have you been subject to jargon that vaguely resembles terms like B2C, B2B, C2C or any other variants? Over the past one-and-a-half years, these terminologies have nearly vanished from the IT thesaurus, to be replaced by e-business and related terms. But there still exists confusion about what exactly e-business connotes. Does the definition of e-business include paying bills over the Net or using the Internet to source information and then purchasing in the physical space? For this survey, Dataquest defined e-business as the "process of conducting transactions using the Internet".

This moves beyond mere buying and selling on the Internet and includes the extended extranet being used by the likes of Tech Pacific, Cisco Systems India and Intel—to include distributors, resellers and customers to form part of the ebusiness. To check the status of e-business readiness in Indian corporates, Dataquest conducted a survey in the four metros (see Methodology).

The results were clear—the banking, financial services and insurance (BFSI) segment led the pack on the e-biz front. The other finding was glaring—that strategizing and rolling out of e-business initiatives still falls under the domain of IT heads or CIOs, and is yet to find a place in the corporate boardroom.

Less than a year back, DATAQUEST had opined that unless top management got involved in the taking of IT decisions, the real e-business goal of India would remain far from being realized. A report by QNB Intelligence second this dictum—"The ultimate e-biz goal must be vision-driven enterprise transformation. E-business transformation shoudl be driven directly from the corporate vision, and only this will deliver rewards and benefits of a different order of magnitude."

Less than 20% of the companies surveyed had top management driving e-biz strategies. An interesting find was the expansion of e-business to incorporate B2B activity. Of a total of 78 companies which had e-business initiatives, 54 (about 70%), indicated that SCM would be part of their plans. SCM continues to attract new project investments: 88% of potential users plan further investments in SCM, against 89% in CRM solutions.

One finding was unanimous—e-business is here to stay...

Do you have any e-biz initiatives in place?
This straight question elicited answers along expected lines. In all, 35% of the sampled companies had e-business initiatives in place, while others had just kickstarted the process—with actual rollout expected in the next 6-24 months. As expected, the BFSI segment led the pack in terms of implemented e-business initiatives, with 71% respondents from this space already having moved ahead. Most FMCG respondents said they had started the process, but rollout was expected only in the next 6-12 months. It was manufacturing which was the eye-opener, having steamrolled into the e-business arena. By the year-end, over 80% of the sampled companies from this space would have rolled out their e-business initiatives.

If not, why haven’t you embraced e-biz?
Price points and infrastructure issues were the two primary reasons thwarting quick deployment of e-business initiatives in corporate India. A miniscule 6% (only three of the sample) of the companies not into e-business cited "No Industry Relevance" as the cause for not implementing any initiatives. The swing on this front, from an identical survey two years back, was palpable—at that time, there were hordes of companies that cited absence of relevance as the reason for not implementing e-biz initiatives. Today, with cost and efficiency pressures dominating, most have taken to e-business in order to stay in the running.

Who heads your e-business initiatives?
E-biz initiatives continue to fall under the domain of the IT head. In all, 67% of respondents said the CIO was King. However, this trend is a bit of a letdown, underscoring as it does the fact that while IT has established itself as an essential part of any business strategy, it is yet to enter the boardroom. Dataquest had opined a year back that the sooner top management got involved in IT decisions the better, but that trend hasn’t happened just yet.

Did you rethink your e-business initiative after the slowdown?
Bless or blame the slowdown? Due to the slowdown, a majority of the companies did a rethink on their business plans and included IT initatives as an added element to their overall gameplan. A few slowed down initiatives too. Overall, 70% of the respondents admitted that they changed their IT plans during the course of the year due to the slowdown. Around 80% of companies with e-biz initiatives already in place said they revisited their plans, while of those companies that were still rolling out their initiatives, 64% said they had rethought their initiatives due to the impact of the slowdown.

What benefits do you expect your e-business initiative to bring you?
While e-business proponents would claim many reasons and advantages for a shift, we checked with the IT managers on what their expectations were. ‘Improved sales’ bagged a majority of the votes at 94%, followed by ‘improvement in the supply chain’. Remember, these two are related. By getting the supply chain in the ‘e-loop’, companies can reduce overheads associated with administration and paperwork by eliminating repetition, leading to better planning of inventories and delivery.

Interestingly, the reason why e-business got global acceptance or wide geographic coverage did not figure very high on the list of expectations. Companies have realized that merely Net-enabling businesses does not ensure opportunities from new markets. The marketing philosophy does not change and e-business is just another channel—and that’s the current state of affairs across the globe. A pan-European survey carried out by QNB Intelligence for EDS said the drivers which underpin business strategies tend to be "defensive and operational", rather than "market- and customer-centric". 55% rated ‘operational efficiency’ as a crucial driver, whilst just 26% rated ‘increasing marketshare’ as a key factor. Only 20% rated ‘increasing shareholder value’ as important.

What are the key hurdles/barriers to e-business?
While the preceived high price point of e-business solutions is a key deterrant to companies embarking into this space, legal issues emerged as a bigger hurdle. Another important issue was the absence of concert between the e-biz initiative and the overall business plan. The survey also threw up a clear trend—e-business is not form of most companies’ core business strategy. This is also corroborated by the low involvement at the CEO/MD level in IT decisions in general and e-business decisions in particular.

Why are you adopting e-business?
Who drives decisions on a company going the e-biz way? Customers, vendors and suppliers would be safe to place bets on. Remember that we are not talking about the typical amazon.com kind of retail business model, with consumers at the business end. We are looking at the business-to-business side of e-business. While big companies are embracing e-biz due to the sheer efficiencies it brings in (even a 1% improvement in efficiencies translates into a crore of increments in net profit), second-tier companies are being forced onto the e-biz bandwagon by customers, vendors and suppliers. For example, Intel and Cisco do not deal with companies which are not e-biz ready. The same holds good for giants like Maruti Udyog, IndianOil and Reliance Industries. Interestingly, e-business is not driven by the fear psychosis of the "competition is doing it, we have to do it too" syndrome.

Has your e-biz initiative had an impact?
This is where everyone agrees, and the resounding answer—YES! As many as 26 of 28 companies which had e-biz initatives in place said it had changing the way they did business and increased efficiencies manifold. The only two who didn’t say ‘Yes’ to the question were certain on one aspect—the impact would come in next year.

YOGRAJ VARMA

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