A Small Case of E-commerce and E-Business Difference

About 15 years ago I was helping May Corporation to switch to e-Commerce (that was their request). It is a company that owned a bunch of big retail chains (Lord and Taylor, Filene's basement, etc.). They thought that it is just about putting a catalog on the web and allowing customers to shop there. I warned them that it is not what e-commerce is about. It is just a connection cable to the high-volume high-power processes that can either burn the company or make it shine like a light bulb.

In order not to be burned by the high-speed requests and the need to determine the whole supply, production, storage, distribution, and dynamic pricing chain (remember the textbook) the company has to respond to these online requests in fractions of a second (without meetings with all parties – as they used to have) - since customers will not wait at the shopping cart longer than a couple of seconds.  This means not just an e-commerce front catalog but changing the whole organization for e-business. Most of the business processes and decisions had to be done by various information systems and be automated (see Amazon as a very good example) to allow for the necessary speed and volume of decisions (topic of next half-week).

Also, such business will compete with their usual store business done in “brick and mortar” fashion (do the search on “brick and mortar organization”). This is why they needed first to get a totally different understanding of what they getting into and how this will change their highly controlled management pyramid (they were tightly controlling ALL the stores from their headquarters). Basically the whole organization had to be redesigned.  This could be done piece by piece with a very carefully designed steps of systems development in a way that all new parts will not make the already functioning automation break (live update).   

As a result, although developing of an online catalog with the shopping cart is a job for one week for an experienced developer, the whole process of putting the company largely under control of information and decision-support systems took years.