This outline of work is intended to provide distributor executives with enough detail to start their own E-Business evolution.  The secret is, "You will always be overwhelmed, feel behind, and be unsure regarding the next steps." Waiting for these feelings to go away will paralyze anyone into total inaction. Start now with steady and consistent investments of first time and then money.

This article will not solve the E-Business challenge, but it will provide distributor executives a solid place to start. Like everything else, this whole E-Business thing, at some point, must degenerate into real work. There is lots of work, some money to be spent, and a secret that must be shared. The secret is actually pretty easy and it is, "You will always be overwhelmed, feel behind, and be unsure regarding the next steps." Waiting for these feelings to go away will paralyze anyone into total inaction. Remember that a decision to study something or to wait is, in fact, a decision to do nothing right now. There is a simple and powerful lesson that can be taken from this that is, start now with steady and consistent investments of first time and then money.

It is just as bad to make the deadly mistake at the other end of the spectrum, spending too much money very quickly. Pioneers were the folks that got arrows in their backs. Many technology service providers sell a promise that if you spend gazillions of dollars and put our package in, then you will be caught up and win. This is a cosmic lie because the truth is that you will never be "caught up." As soon as your "solution" is in, there will be a better one.

A balanced approach is to imagine your business as a yacht running in fog. Your destination is 10 miles ahead, but the visibility is only one mile. To reach your destination you must have a compass heading. This is your E-Business Strategy which actually only defines where you want to end up when you are done. With this compass heading, you can set off and look for landmarks along the way. You can never see the second channel marker until you get past the first one.

The first and most important requirement for the E-Business evolution is real senior executive involvement and LEADERSHIP. Any senior executive who offloads this work to an IT (Information Technology) department will not achieve their objectives. Much of this work requires direct executive coaching, interpreting, and "cat herding." At the conclusion of this process the distributor executive will know and understand a great deal about technology design, tool sets, and other arcane subjects. There is no other way as this is the price to play.

There are five key pieces to this endeavor that include:

The second critical requirement is an understanding that this is a process, or a journey, and not a destination. Once the business starts down this path it will never be complete. Recognition of this pattern is critical to ensure that progress is actually achieved. The key to this is to set very short-term goals and deliverables around the most critical business functions. Think of this as a phased approach where phase one gets implemented and phase two is under development.

The third critical requirement is a trusted and competent technical leader who can both question business strategy and talk to the "technical geeks with tongue studs." The technical lead needs to be included in all strategy development discussions and continue to have open access to the senior team. The technical lead has primary responsibility to ensure a solid and reliable technical platform as well as the selection of technical tools and ongoing documentation of the system as it develops. The technical lead frames all the cost vs. benefit discussions so senior management can make informed decisions. It is absolutely critical that the technical lead is not responsible for ANY actual web content creation or maintenance of information. The content responsibility lies with each functional manager, i.e. marketing data is the responsibility of the marketing manager.

The fourth critical requirement is a real project management process that provides the foundation for continuity and success. Distributors tend to do large chunks of work in a crisis mode. E-Business development does not work in this method. It succeeds with consistent, steady progress when things are quiet or busy. Project management requires a very detailed project plan that defines a critical path along with specific deliverables, required resources, and deadlines. Maintenance of a current project plan is the lifeline to success in this effort. There are skills required to do this work and there are many classes available where these skills can be learned. Whether a distributor does this work for themselves, or decides to outsource it, attention to detail is an absolute requirement.

The descriptions that follow deal with the actual work required. These four requirements, leadership, recognition of this as a process, a solid technical leader, and good project management skills, are absolutely required for the work to be successful. Think of these requirements as the ante to play.

Before we hit the actual work, we need to take a small technology detour. This will be the first of the "how to" lessons that you need to learn. The diagrams that follow are from an Indian River Technology Forum. They describe the steps necessary to accomplish anything with technology. We came by this lesson by making many mistakes and wasting money in our own organization. We jumped right into "Doing It," i.e. web sites, intranets and so forth. Today we find that this approach needs to be ruthlessly followed to gain business benefit. If you want something of real business value, stick to and invest in the work other than "Do It."

EXECUTIVE EDUCATION AND LEADERSHIP

This process must be led from the front where the senior executive is actually out there becoming a "web head" evangelist. There will be frequent cases of the senior executive showing an internal manager new stuff from the web. There are two key components to this activity, one is education and the other is experience. They are interrelated but the winning executive will have their own powerful laptop, high-speed Internet access at both home and work, and they will spend an average of one hour a day on the Internet. In addition to doing their own e-mails, they will have developed strong research skills based on clipping services and other sources of information that they develop on their own initiative. Expertise in the use of search engines is critical, including Boolean terms.

Indian River recommends that if the executive is starting from scratch that they purchase a laptop for about $3,000 produced by IBM, Dell, Toshiba, or other mainstream supplier and that the full Microsoft Office Suite ($500) be installed along with the Intel videoconferencing services ($200). A digital camera and scanner should also be acquired ($600 for both). Roadrunner (cable TV) or DSL phone connections work well at home and even at work if the entire company is not yet on the Internet. The senior executive would also do well to get a local ($50/hour) consultant from the computer store to set up plug-ins and help with other hand holding so internal employees do not recognize the lack of competence in this area. The total cost of consulting services would be under $1,000.

Investment in these resources and the further investment of executive time are probably the single most important task in this entire process. It starts a learning and interest cycle that will produce the necessary energy to be successful. Specific educational tasks are listed below and should not be considered optional.

Documents that need to be read include:

CLARIFY BUSINESS STRATEGY AND DEVELOP THE E-BUSINESS STRATEGY

An E-Business strategy is actually a subset, or subordinate to, the company business strategy. In other words, it is impossible to build an E-Business strategy if a company strategy is not already in place. Most distributors actually don't have one. Their value propositions to their customers and suppliers are unclear with little to no hard data backing up the case. Most distributors are limited to talking about the quality of their people (un-quantified) or their service (unmeasured).

It is beyond the scope of this document to discuss how to create a business strategy but any distributor must be able to clearly and succinctly state their core competencies. This subject was examined in depth in the last NAW/DREF "Facing the Forces of Change" report. A Core Competency meets all three criteria listed:

As a point of information, service is not a core competency; it is a result of having core competencies.

From an E-Business perspective it is critical that the distributor have facts and data to answer the questions below. In our experience, if a distributor builds an E-Business strategy on long standing perceptions and opinions, the market will expose their assumptions in an expensive or painful fashion.

With an answer to the questions above and a real business strategy (even on a cocktail napkin) an E-Business strategy can be completed. The first and most important strategic issue is to always remember the Cosmic Law of the Web, "You must give before you get." An E-Business Strategy is about becoming a D.A.S.H. (Digitally Aligned Supply House). E-commerce, i.e. doing transactions on the web, is a small part of a real E-Business Strategy. The transition to a D.A.S.H. company involves integrating these digital tools into the company's day-to- day detail activities.

There are many external portals and E-Business communities that are in various phases of start up activity. All are promising a great deal and some have large potential benefit. Any distributor can feel overwhelmed by the array and new rules that each alternative presents. Most distributors will choose to participate in several as this marketplace develops. The decision process should be cautious, deliberate, and highly documented. The most critical thing to remember in this process is that none of these external alternatives is a substitute for a distributor defining and playing their own E-Business game for their own business. These alternatives must be additive to a distributor's own E-Business initiatives.

Distributor executives can participate in discussions with these external alternatives while their own internal initiatives are being resourced and implemented. In fact, these discussions will continue for the next several years as new alternatives, channels, and business models evolve.

ESTABLISH A SOLID BASELINE ARCHITECTURE

Implementing an enterprise-wide standard for hardware and software toolsets is the keystone to success for any E-Business. There are three main reasons for establishing a solid baseline architecture. First, companies save on cost by purchasing hardware and software in bulk. Many vendors offer corporate licensing programs that are more affordable than purchasing products individually. In addition, the corporate licensing programs usually offer preferred technical support for corporate accounts. Second, companies will improve the efficiency of the resident IT staff. The IT staff now has to only manage and support a small range of tools for all users. This results in gaining more local expertise in the operation of applications and systems, which also produces a more reliable information system as a whole. Third, companies will improve the efficiency of its knowledge workers. Common toolsets allow for fast collaboration by avoiding compatibility and conversion issues between applications and systems.

Indian River does not endorse a particular hardware or software vendor. We have chosen the Microsoft family of Office, Exchange Server, and their Internet tools due to their wide acceptance. Whatever solution is accepted, it must be deployed across the enterprise and usage policies must be enforced. A "best of breed" approach can be taken in the selection of hardware and software. However, it must be used judiciously because it can violate the above reasons for establishing common toolsets.

ESTABLISH AN INTRANET POLICY

Think of your intranet as a web site for only your internal employees that normally connect over a Local area Network (LAN). The information on your intranet is normally not accessible to outsiders. Building an E- Business infrastructure is a relatively easy thing to do. The difficult part is incorporating the use of E-Business into everyday business practices. Since it is tough to change established business methodologies to fit shrink-wrapped applications, and it is tough to change shrink-wrapped applications to fit established business methodologies, a compromise between the two must occur. This hybrid business model can only exist after a universal embrace of technology. This universal embrace is called a PC literate workforce. This portion of the effort must be driven by your core business strategy, i.e. the ways your employees need to collaborate in order to meet key customer and supplier commitments. The first processes to move to the web are those activities that you fail to perform well. Think of those areas of performance where you apologize the most, e.g. failing to expedite a special order. These activities will provide very quick paybacks in your investment.

BUILD THE COMPANY EXTRANET

Most companies want to jump right into the "Do IT" phase when it comes to building an extranet or web presence. Bypassing the first steps of Think IT, Design IT, and totally forgetting about Test IT are the worst mistakes a company can make.

In reality, Do IT is the least important phase! Without Think IT, there is no way to determine what the company really wants and what is the cap for the scope of the project. Without Design IT, there is no way a company can architect for a robust and scalable system. Without Test IT, there is no way to ensure predictable results from the company site and online applications. These are no small follies and can cause a company to quickly lose credibility with its customers.

This process needs to focus on increasing customer intimacy and seeking to create imputed value in your core value proposition. Any company needs to really detail customer classes and job titles in your core group of customers.

FINAL THOUGHTS

This outline of work is intended to provide distributor executives with enough detail to start their own E-Business evolution. It is obvious that the scope of the process is much larger than the detail encompassed in this document. The intent is to provide a solid starting point to do some actual work and make some actual progress.

Indian River is engaged in the same quest and has interest in learning from and supporting others on the same path.

Enjoy the journey.

Indian River Consulting Group is an experienced based firm specializing in Distribution. Started in 1987 by Michael Marks, a current DREF Research Fellow, IRCG's specialists consult with distributors and suppliers to make the changes necessary to maintain competitive advantage. You can contact them by calling 321- 956-8617, or visit www.ircg.com for more information.

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