January 05, 2001, 9:27 AM — The trouble with the word e-business is that it has become the most overused and least understood expression in our lexicon of technology and business terms. From a technology standpoint, the e-business concept is a complex yet relatively straightforward undertaking. Throughout the last thirty years, a wide range of business applications constituting the enterprise have sprung up to address the four major aspects of e-business.
The most prominent of those applications is known as the ERP (enterprise resource planning) application, which typically applies to finance and human resource functions. Another closely related category of applications covers the supply chains created by companies to manufacture and distribute their goods.
The third major category, CRM (customer relationship management) software, traces its roots back to sales force automation software. And finally, we now have a wide range of e-commerce software for automating transactions.
The e-business concept is rooted in the fact that all these applications came into vogue in different time periods. As such they tend to be dominated by a wide variety of disparate vendors, resulting in a series of stovepiped applications that can't share data unless companies spend major cash on application integration tools. Integrating these applications was made less daunting, thanks to XML.
XML is not a magic wand to make the complexities of application integration disappear, but it does simplify the task such that most IT organizations can tackle it themselves.
The compelling benefit behind all this work is the ability to drive days' and weeks' worth of time out of the business process, making companies more efficient than rivals that fail to understand e-business. After all, the company that can produce a widget faster than its rival, that gives customers more control over process -- and gets paid for it sooner -- develops a sustainable competitive edge.
Alas, the technical challenges associated with e-business pale in comparison to the political challenges companies face as they move to this model. Business executives are political animals. And opening their domains to fellow company executives -- not to mention executives at their suppliers and customers -- is seen as a loss of control. The resulting loss of status associated with e-business deeply troubles many executives. You see, the difference between being a mere vice president vs. a senior vice president is in who owns the data and controls the process.
This is a pathetic, but all-to-human, state of affairs. So rather than take on the entire e-business issue, companies are embracing e-business concepts in a piecemeal fashion.