The seven pillars of cyber-wisdom

New Straits Times
02-21-2001
The seven pillars of cyber-wisdom
Edition: The City Advertiser; 2*
Section: Literary & Books
Column: Leong Pe Loon's microword
Type: Book review

WALL Street's romance with the Internet started with the IPO of Netscape in August 1995, at which US$2.6 billion was raised. This was in spite of the company having just reported a loss of US$4 million from revenues of US$14 million, and its Web browser was being given away for free (even if it was charging thousands for its web server software). The intent had been to start charging for the browser after listing, but it hadn't figured on Microsoft coming in from nowhere to start a browser war.

From 1995 until early last year, the Nasdaq spiralled to giddying heights, hitting an all-time high of 5,000 points last March. Today, it's a mere shadow of its former self, listlessly languishing around the 2,500 mark. Dot-coms have been particularly hard hit. From a high of US$250 just a year ago, Yahoo! is now trading at between US$25 and US$40. Amazon.com is faring no better - at below US$20, it's a fraction of its US$110 peak. Even Microsoft has taken a beating, the price of its stocks is barely half of what it was a year ago. Microsoft bashers - and there's never any shortage of them - rub their hands in glee after they've figured out how much less Bill Gates is now worth.
Still, just because you drove your car into the back of a lorry doesn't mean you don't drive anymore. And just because dot-coms are crashing all over the Nasdaq doesn't mean there's no future in doing business on the Internet anymore. Chuck Martin, even if he had written his book, Net Future: The 7 Cybertrends That Will Drive Your Business, Create New Wealth, and Define Your Future (McGraw-Hill, 289 pages), before the crash of the Nasdaq, will surely attest to that.

The e-business revolution is upon us, Martin cautions; for some, it's an issue of survival, for others, an era of unprecedented opportunity. The Net Future is not about selling T-shirts on the Net, but a whole new way of doing business on it. E-commerce is the buying and selling of products, information or services over the Net; it's only the tip of the e-business iceberg. E-business is what the author calls the "Netting" of the entire value chain, "from product conception and creation, all the way through manufacturing and production, distribution, and, ultimately, consumption".

To kick off, Martin tells us we've gone beyond the Brochure-ware stage, where companies simply reproduce on the Net what they were doing in their traditional businesses. Like putting annual reports and product brochures on their website, exactly as they appear in print. We've also moved on from the New Content arena, when Net-only companies like Yahoo! and Amazon.com created new products and services for the Net environment.

In the current wave of Business Transformation, technology is used to connect suppliers, distributors, customers and business partners. These close and quick connections streamline operations both inside and outside the enterprise. The true e-business wave of the immediate future goes another step beyond this: Netted companies will create and modify products to suit the needs of customers.

The seven pillars of cyber-wisdom, the Net trends that Martin sees and imparts to his readers, will make winners of those willing to undergo the transformation to become Netted. The cybertrends identified include the Net economy going Main Street to a new breed of consumers, a wired workforce altering the dynamics of the workplace, and the open-book corporation which eliminates the boundaries between itself and the suppliers and customers. In addition, products will become commodities, and the customer becomes data as new technologies for analysing customer behaviour in real time redefines the term "customer service".

The Net economy is going mainstream because everybody loves the convenience - and a bargain. The best bargains on air travel are the last- minute fares available over the Net. Books and CDs can be bought at prices below traditional retail outlets, even with delivery charges factored in - true for us here in Malaysia before the ringgit took up skydiving.

As it grows, the cyber-economy changes the way business is done. The 7- Eleven chain is installing financial kiosks in some of its shops in Texas to provide its customers banking and bill payment facilities round the clock. Shell Oil is considering to convert its credit card processing machines at petrol stations into full-blown ATMs.

Our own Maybank has unleashed a bleeding-edge online banking website, www.maybank2u.com, which is eons ahead of what it passes off as service in its bricks-and-mortar branches.

In the Net Future, dissemination of knowledge is power. In traditional businesses, the more information you controlled, the more power you had. This no longer works. Federal Express, the courier service company, opened up their databases to the world. Customers are allowed to query the corporate databases directly and can track the status of their deliveries themselves, ending up with helping to run the corporation.

Products become commodities; the information sitting deep in the recesses of mainframe computer databases of corporations may have value that can be sold. The Journal of Commerce was a newspaper which printed listings of cargo ship schedules. When the Net became popular, the ship owners, which are the lead advertisers of the paper, bypassed the print media and posted the ship schedules - which became a commodity - on their own websites. The newspaper was forced to restructure.

As consumers acquire unprecedented power to get what they want through the use of information and technology, so will the companies that sell to them. Corporations have always captured plenty of customer information but traditionally haven't put these to very good use. Now, through use of technology with ugly names like datamining and collaborative filtering, companies are able to forecast how consumers behave, what they want, and then recommend such products to them. Chuck Martin calls it "pre-emptive marketing".

Though such technology wasn't employed by Amazon.com when he was writing the book, its implementation is among the most impressive and efficacious. If you've bought anything from them lately, you'd find that on your return visit to the website, they'd know who you are, display the products that would interest you, and even invite you to visit a webpage which they claim YOU have created, where you'd be presented with products which you may consider buying. All through information gleaned from what you've bought from them, and what you've searched for at their website.

Net Future isn't a book which does everything for you. Martin presents his premises, illustrates them with real-life examples and case studies (some of which are all too brief, unfortunately) and leaves the rest of the work to you, stimulating you into thinking. In all, an indispensable manual to survive the onslaught of the Net Future.

A must-read for corporate leaders and entrepreneurs wishing to drive their business, create new wealth, and define their future on e- business, as the title promises.

(Copyright 2001)