E-Commerce Hype or Hope?
The majority of the respondents acknowledged that e-- commerce is the trading medium of the future and 74% confirmed that they did not believe that the current level of hype is overblown. Interestingly, as many as 56% believed that their own organisations are already well equipped to survive the dot.com revolution.
The optimism behind the medium stems from the youth of the industry and the fact that while few actually profitable models of e-commerce operation exist, evidence of new and successful dot.com companies is announced each day. Mark Thomas of the DUBS Opinion Panel commented: 'The dot.com revolution is absolutely not over blown. I believe paradigms in developed societies are going to go through an immense shift in the economic, political and social environments. Sure there is hype out there, but within it all there are strong indicators that e-commerce is part of a revolution bigger and more farreaching than the industrial revolution.'
However, a quarter of the panel did express doubts that the current level of hype could continue at its current rate. Ray Brown said, 'E-commerce is being overblown right now because of the Internet, which is, after all, just providing one more communications medium which is currently free and universally available. It is also open to abuse, and has no ownership or accountability. It's another example of the 'market' jumping on a bandwagon which it does not necessarily understand'.
CIMA Council member Professor Roland Kaye, Dean of the OUBS, added: 'The optimism behind the dot.com revolution in this survey stems from the confidence the Alumni Opinion Panel have in their own ability, gained from undertaking the MBA programme, to encourage their organisation to adapt to meet successfully the opportunities presented by this technology. However, the very reasons for the optimism behind the dot.com revolution also give rise to the doubts. The relative youth of the industry and the lack of profitable operating models, with many start-ups being worth more on paper than in reality, mean that the worth of the medium is unknown, as well as extremely difficult to value. Of the thousands of start-up dot.com companies in existence today? it is likely that almost half will have disappeared within the next five years.'
While 56% of respondents believe that their own organisations are ready to meet and survive the dot.com revolution, they also recognised that to compete it is not enough for an 'e-commerce department' to be established and that a whole organisations' structure, strategy and logistical operations have to be revised. Russell Marchant, OUBS Opinion Panel stated: 'The next ten years will see the reconstruction of many institutions we have taken for granted over the last thirty years. We cannot afford to be left behind as there may be no chance to catch up at a later date'.
Those who expressed concern that their companies or organisations were unprepared, in their present forms, to respond to the demand, highlighted competitive edge, security and distribution as potential pitfalls. Particular reference was made to the instantaneous reaction to competitor strategies required by electronic markets, something which at present most companies, and in particular large corporations which tend to be less flexible, cannot do.
Kaye stated: 'Many companies are seeing the e-commerce bandwagon as a way of regenerating flagging fortunes, when what is actually required is a soundly based strategy to meet the changing demands of the marketplace'.
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