In the Internet world we have gone through several stages:
Stage 1 The internet was going to be the revolution. Nothing was going to be like before. Both B2C (consumer trade) and B2B (business to business) were going to be a success not comparable to anything that happened before. The only important thing was to be fast. You bought a domain (business.com) for $ 7.5 million and everything was going very fast and possibly very wrong.
Stage 2. After the first «scares», it is concluded that B2C is a disaster although B2B is going to revolutionize the world between companies. A large number of «.com» portals focused on intercompany e-commerce begin to emerge and B2C companies (boo.com for example) begin to close.
Stage 3. After the second "scares", it is changed and it is said that neither the B2B nor the B2C will work. The Internet has been a hoax. It is just one more medium like mail and telephone.
So, is there nothing more to talk about? Of course it does… The Internet is only being born as a tool for doing business.
Some of us defend that the reality is that the Internet is going to revolutionize the way of doing business, although that is not going to be creating pure Internet companies "without feet or heads" but so that companies that already operated in the physical world use the Internet to improve their results reducing costs and increasing income.
The Internet and information systems will modify the cost structures of companies, the way they relate to customers and suppliers, the concepts of customer and employee loyalty, etc.
But of course, no revolution has ever been or will ever be easy or fast. When James Watt discovered the steam engine, hardly anyone could have imagined the changes it would bring about. At that time many people said "we will never stop using horses" and in the 21st century we thought where are the horses now ?.
In fact, Internet penetration is being much faster than the rest of the technologies that we now know and widely use. If we calculate the time it has taken to reach 50 million users of different technologies, we have that radio took 38 years, television 13 years, computers 16 years and the Internet only 5 years.
The problem and confusion that has been with the Internet have been the deadlines. It was thought that the revolution would be done in a year.
Thinking about the impact on companies, three major groups could be distinguished:
Multinationals
For multinationals and large companies, the Internet is a strategic priority since it is a way to radically improve their results.
In these companies, in which the number of suppliers, customers and employees is very high, the Internet offers them great possibilities due to the significant reduction in costs of interaction with these groups.
Following the formula
Total communication cost = Number of communications x communication unit cost
In large companies, since the number of communications is very high, the only thing they can do to reduce the total cost of communication is to reduce the unit cost of each one of them.
Let's think of a case as simple as asking the price of a specific product. Getting these queries through the Internet means that the thousands of queries that are made to know the price of this product are carried out at practically zero cost.
Similar reasons can be made for sending information to customers, internal communication to their employees, for material requests to suppliers, for the generation and delivery of offers to customers, etc.
Therefore, the investments made by all multinationals and large companies on the Internet have been very important. From the Covisint e-marketplace, created by DaimlerChrysler AG, Ford Motor Company, General Motors, Nissan, Renault, Commerce One and Oracle to the initiatives of each of the companies citing the famous cases of Cisco, Oracle, IBM, etc.
At the Latin levelFor example, the estimated investment of four of the 10 largest Spanish companies on the Internet has amounted to no less than 600 million euros in the last 18 months. Telefónica, Repsol-YPF, BBVA and Endesa have invested this figure in infrastructure, the creation of intranets, the implementation of payment systems and customer service online, corporate communication on the internet and exploration of new business models, according to Emarketeer. Latin, for example, the estimated investment of four of the 10 largest Spanish companies on the Internet has amounted to no less than 600 million euros in the last 18 months. Telefónica, Repsol-YPF, BBVA and Endesa have invested this figure in infrastructure, creation of intranets, implementation of payment systems and online customer service,corporate communication on the internet and exploration of new business models, according to Emarketeer.
Small and Medium Enterprises (SMEs)
Regarding SMEs, in a study carried out by the Improven Consultores team, it was concluded that organizations are not managing to improve their results using the Internet for one or more of the following causes:
1. Total or partial ignorance of the important opportunities offered by new technologies in general (and the Internet in particular), which leads to little support from management.
2. Unclear return on investment.
3. The possibilities offered by the Internet to the company are underestimated.
4. Lack of planning in the Internet integration process.
5. Lack of qualified personnel for this area.
6. The processes of the company are not remodeled for the correct adaptation of the business.
7. It is not a priority.
8. Resistance to change.
9. Lack of methodology in the development of the project.
With which, as can be seen, there is still a long way to go, although many of them have already started. SMEs have a multitude of possibilities on the Internet, with a different approach than multinationals, with much smaller investments, but they have many possibilities.
Pure Internet companies «.com»
Although these companies are a minority, it is important to review them because they have been the flag of this new revolution and more at a time when a classic of.com, Amazon.com has given benefits for the first time. And this is almost normal in any company, in the case of Amazon it is great news. Based on a very clear vision of the possibilities of leadership and positioning on the Internet, Amazon has launched a career towards this leadership based on investments and expenses without measure and at the cost of the "almost blind" confidence of its investors.
After some hard years for Amazon.com, it seems that it is currently close to achieving a position that can give it a few decades of profitability. Although the market and investors will always have their last word.
