Building Successful Internet Companies With Sound Strategies

The Internet Economy seems to have emerged in the blink of an eye, with a few savvy businesses propelling themselves at rocket speed, while other companies are simply left in their wake. Competition is fierce, and traditional brick-and-mortar businesses must, reluctantly or not, embrace doing business on the Internet to stay competitive.

Clearly, many executives are still struggling to find answers to how their companies can compete in this fast-paced, highly competitive environment. The reality is that finding the right answers is not easy, especially when dealing with the multi-faceted challenges of transforming a company into an electronic commerce powerhouse, such as:

F Is such a transformation necessary to keep pace with competitors?

F What technologies, solutions and infrastructure tools are required to make the customer experience a positive one?

F Do I have the IT staff or experience to manage a Web business?

F What components of the framework will be outsourced, and which will be handled internally?

F What are the set-up and maintenance costs, both short term and down the road?

F What is the projected return on investment, and how long will it take for the enterprise to be profitable?

Obviously, there is a myriad of considerations to be made, but one major component is missing in this process: strategic direction, or what I refer to as the real “business behind e-business.” In the future, the “e” in e-business will vanish and will be referred to simply as “business.” And the same principles used to develop a business also apply to building an e-business.

While these issues are important, they are relatively useless unless they are driven by an overarching strategy, as well as integrated into a framework designed to achieve measurable objectives for the company.

This is not to say that all e-businesses lack a comprehensive strategy, since there are numerous success stories that have proven otherwise Yahoo!, Amazon.com, and America Online are a few of the industry stalwarts that come to mind. However, in many cases, innovative Internet companies are forced to close their doors or stumble badly in the marketplace due to flawed strategies, poor execution, or a combination of both.

So how does an e-business avoid such pitfalls? Here are 10 simple tips that we offer our clients when working with them on the development of an e-business strategy:

1 Secure the e-business environment.

Ensuring security is a critical concern when conducting e-business. These aspects include privacy, authentication of buyer and seller, message integrity and non-repudiation, firewalls, and intrusion detection.

2 Make online ordering and payment processing easy.

Catalogs and product descriptions should be concise, but thorough. For a site to be successful, users must be able to securely place orders and negotiate means of payment. Thus, companies need to adopt systems capable of handling both front- and back-office activities.

3 Efficiently fulfill the delivery of both soft and hard goods.

A successful e-business must handle the delivery of a customer’s purchase, whether soft goods (items delivered immediately over the network) or hard goods (items physically delivered to the customer’s destination). By automating as much of the order-to-delivery process as possible, businesses can dramatically reduce distribution costs and provide immediate delivery of goods.

4 Improve customer service by making full transaction records available online to users.

When customers have online access to the full record of their transactions, their questions are minimized, disputes can be efficiently resolved online, and on-Web goods can be required easily.

5 Cultivate solid customer relationships.

Comment forms, special offers, reward programs for repeat customers, and other tactics one might use in a traditional store to build relationships and brand loyalty with customers are necessary for online stores as well.

6 Integrate existing business systems into the e-business environment.

Electronic commerce must be integrated into existing systems, models and processes. While it is possible to handle the few orders that are generated today without strong automation or integration into a legacy system, full integration is critical to the success of businesses in the future, as transaction activity grows.

7 Build an infrastructure that can scale as your business grows.

This is the hardest, but also the most essential, part. Simply, when selecting a development framework and architecture, companies should choose components that will grow as their operations do. Without scalability, future growth, and therefore, success are suspect at best.

8 Create open systems and business processes.

Systems and processes must be adaptable to new ways of doing business, since the Internet is dynamic. Many new partnerships and opportunities are possible if systems are “extensible,” or can accommodate other things and be extended easily. Sticking with proven industry standards goes a long way.

9 Avoid site rollouts during the holiday shopping season.

Companies should plan marketing campaigns carefully and avoid planning site launches during the holiday season. Spend sufficient time in planning upfront and be conservative, but strategic, with spending.

10 Test the loading and security of the site before launch.

Make sure a site can handle at least three times the amount of traffic it is anticipated to receive. Also, load testing and security checks should be conducted to ensure the site’s integrity is maintained.

While the world of electronic commerce is rapidly changing the ways in which we approach business and operate our companies, certain Old Economy operating principles, such as the formation of strategies, are still applicable. Essentially, a company needs to “look before it leaps,” or it just might find itself plunging into the abyss of dot-com failure. It is not enough to simply develop a compelling product, service or technology under the assumption that it “will sell itself.” In today’s marketplace, nothing sells on its own, but rather, it is the strategy that creates and fulfills the sales proposition.

Zeb Bhatti is founder, chairman of the board and chief executive officer of WebVision, a full-service e-business solutions provider based in Torrance.