The Internet is a real market for doing business and there are many possibilities that it offers to companies, although these are currently in a moment of expectation towards New Technologies in general and the Internet in particular.
Internet use is growing exponentially and this is confirmed by the current state and forecasts. In Spain, electronic transactions between companies amounted to 4.7 billion pesetas in 2000 according to the Spanish Association for Electronic Commerce. But beyond the figures, we must draw conclusions.
We must bear in mind that there is no point in trying to apply the same principles to a multinational as to a Small and Medium-sized Enterprise (SME). For this reason, each case must be analyzed and a line of work defined according to its needs and resources.
At least on paper, the Internet offers many opportunities:
1. Improvements in the marketing and commercial area:
- to. Communication actions at low cost because the costs of communications over the Internet are practically nil. We have to consider that we can use the Internet to communicate with current clients, with potential clients, with suppliers, with the personnel of our company, etc. Advertising on the Internet is much more profitable than in traditional media due to its lower costs and the great segmentation we achieve. Improvement of current and potential customer service, suppliers and workers, since through the website and email, we can interact with them 365 days a year, 24 hours a day.c. Greater knowledge of customers and their satisfaction: Due to the low costs of customer interaction and the possibilities offered by technology,we can get a lot of information about them at a very low cost. We can collect this information both actively and passively and know which products are the most consulted, what is the time spent on each of our pages, how many users visit us daily, what is the effectiveness of our different communication actions, etc.d. Improved communication to customers and information they have on products or services. Possibility of low cost international expansion and access to geographically dispersed markets. This point is a direct consequence of the possibilities of communication and segmentation that the medium offers us. Strengthening of the corporate image. Internet and the different supports it contains (email, forum, chat, electronic magazine, intranet, etc.),offers us the possibility of transmitting and reinforcing the corporate image of the company
2. Improvements in purchasing management
The improvements in this area are directly related to virtual markets (e-marketplaces) as well as the intrinsic communication possibilities to the Internet. They are also closely related to the information systems used.
The possibilities are very important as we point out below:
- to. Decrease in the purchase prices of purchases between 5 and 15%. This characteristic is the most important since it is directly linked to the price of the product / service. This reduction in costs is related to the possibility of access to more suppliers as well as the facilities in the negotiation process. B. Decrease in the costs of purchasing processes due to the improvement in their efficiency. This is a very important point for large companies, but not so much for small and medium-sized companies, since the costs of the purchasing processes are not high. Reduction of purchase costs due to the elimination of intermediaries: This is a factor to take into account since it achieves a significant cost reduction, although possible conflicts in the channel must always be taken into account.Increase in the number of potential providers and decrease in location time due to the ease of access to existing information on the Internet. In this case it is important to point out the provincial, national or international nature of the suppliers. Obviously, the less local the character of the providers, the more possibilities we will have.
3. Improvement of company processes
The introduction of new technologies is the right time to analyze and improve business processes. This project must be considered taking into account both the technological aspect and the business aspect.
4. Taking advantage of new business opportunities and new competitive advantages.
The Internet and new business models bring up a large number of opportunities, both in the short and long term, that companies must evaluate in order to take advantage of them.
At this point, the advantage of positioning yourself as a leader in a certain segment on the Internet is an important opportunity that brings interesting benefits both in the medium and long term.
5. Improvement of human resources management due to the improvement of effectiveness and efficiency that the Internet contributes in the recruitment, selection, training, internal communication, knowledge management processes, etc.
Due to all these possibilities that have been previously developed, there is a direct impact on business results that can be summarized as follows:
- Increased sales due to various phenomena: attracting new customers, increased loyalty, increased sales to current customers and cross-sales, increased knowledge of products and services by customers, reinforcement of corporate image,… Decreased costs due to improvements in communication and processes. Increased profit margins as a direct consequence of increased revenue and reduced costs. Customer loyalty thanks to greater knowledge of their needs and flexibility to meet them.
Until now, the important advantages that the Internet can offer the company have been developed, but now the question is, what is the reality?
The reality is that currently the company, in general, is not obtaining results using the Internet for the following reasons:
- Total or partial ignorance of the important opportunities offered by New Technologies, which leads to a lack of support from management. The opportunities offered by the Internet to the company are underestimated. Lack of personnel with a global vision of the project, both from the point of view from a business and technological point of view. The processes of the company are not remodeled for the correct adaptation of the business. Incorrect development of communication actions on the internet. Lack of methodology in the development of the project.
Of these points, the most important is training. There is a great problem of ignorance of the possibilities that the Internet offers to the way of doing business with what is considered a "fashion" and these advantages are not being used.
After having analyzed the current situation, the lines of action necessary to ensure that the company obtains results go through:
- Training in the area of Internet Business: It is not necessary a technical training but focused on how to use the Internet to do business. Plan the Internet as a way to improve business results and that should be the responsibility of the Company's Management. Need of internal experts or external in this area Strategic approach to Internet Business Being willing to rethink the business model and processes of the company
After this article, we hope we have managed to clearly reflect what are the real possibilities of Internet business (e-business), the current state of Spain and what are the lines of action to follow to ensure that the company takes advantage of all the opportunities that the Internet offers you.
