To hear IBM tell it, e-business is destined to transform your organization. But isn’t the only difference between e-business and 1-800 customer service the length of time you spend on hold? Well, yes—and no! The driving force behind e-business is not the technology of the Internet but the market dynamic that wrings out every last ounce of excess cost from the economic cycle. That’s why e-business provides such a powerful vision of the future. It’s a future I call the “instant economy.”

An instant economy is a production and distribution cycle driven by flights of customer fantasy. Product conception, creation, marketing, and production are all affected by it. And IBM is well on its way to establishing market dominance in the creation of usable e-business tools. Here’s an example in the publishing world of how the instant economy operates today.

Let’s start with product conception. IBM and its Business Partners have developed tools that enable organizations to analyze the information contained within company databases. Using these tools, a manager can spot trends that cry out for new products or services. In publishing, these trends may surface as sales figures that point to a need for more book titles on the subject of Java or RPG. IBM calls the use of these tools business intelligence (BI), a sector of the software market expected to grow at an annual rate of 15 percent. One such BI tool is IBM’s DecisionEdge. It ties the back-end of several industry- standard enterprise resource planning (ERP) packages to efficient analysis software, allowing companies to develop new products based on real-world input.

After a new product or service has been conceived, it must be created. IBM offers collaborative tools (Lotus Domino and Notes being the prime examples) that let staff pull together to discuss, develop, and design new products. At Midrange Computing, we use Notes to conceive and create each issue and every book. Notes empowers our widely dispersed technical editors and allows us to collaborate efficiently.

It is after these publications have been created, however, that the new e-business model really starts to make sense. Traditionally, legions of workers mass-produce each new product. In publishing, this requires publishers to print and bind new books in optimum quantities, storing them until they are sold. Each production run is designed to minimize waste and maximize profitability. While a book is in production, teams of marketers canvass the market to drum up orders through expensive advertising. Their job is

to pull the books out of the warehouse and place them into the hands of customers at the same rate that the books are being produced. This is the riskiest part of the cycle: If the marketing campaign fails—if too few customers appear—the book is considered a failure.

But, in the instant economy, production and marketing can be reversed. Instead of creating the goods and filling the warehouse, books can first be advertised inexpensively on the Internet, allowing for more efficient production runs. As a product is conceived and created (but not yet produced), marketers can promote the product to gather orders for manufacturing. Using the Web, a company can tailor its site to meet the needs of the instant economy. Here again, IBM offers tools, such as Net.Commerce and an e-business site creator called START.

In our book publication example, IBM takes this one step further: on-demand printing. The company offers a system that transforms Web-generated electronic orders directly into physical books. As customer orders pulse through the Web site, the appropriate specifications are loaded into a laser printer. Then, a book is printed, bound, and boxed for shipment, enabling a manufacturer to produce one book at the same per-unit cost as 100 books. It is the epitome of the instant economy: If the customer wants it, the publisher will manufacture it.

More than just market hype, e-business is a new way to view the world, and you’d better believe it will affect your shop. Here at Midrange Computing, we see the advantages of the e-business cycle every day. That’s why, in months to come, you’ll see more articles on collaborative software, e-commerce, and BI.

So, write and tell me what you want from MC. We’re here to build our model to your satisfaction—instantly.

Thomas M. Stockwell is an independent IT analyst and writer. He is the former Editor in Chief of MC Press Online and Midrange Computing magazine and has over 20 years of experience as a programmer, systems engineer, IT director, industry analyst, author, speaker, consultant, and editor.  

 

Tom works from his home in the Napa Valley in California. He can be reached at ITincendiary.com.

 

 

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