Introduction:
For most working professionals, it is hard to remember what life was like before the Internet. It is difficult to fathom that this "commonplace" technology has only been used in most organizations for the past ten years or so. The Internet has certainly revolutionized the workplace and significantly changed how most people spend their time at work. Just take away Email, Intranet sites, and blackberries and see how much productivity is lost!
The Internet Economy:
It should come as no surprise then that by the mid 1990s the Internet captured the hearts and minds of many entrepreneurs and business executives as a means to really change the way business is conducted. The problem, according to Michael Porter and others, is that many entrepreneurs and business executives confused the Internet with strategy. Rather than thinking of ways in which the Internet could be used to enhance strategy, they simply adopted the Internet as their strategy. This turned out to be a fatal mistake for the vast majority of Internet start-ups and even caused some of the more traditional companies to lose their focus and make a few missteps.
The financial services industry provides a case in point. In the mid 1990s, many medium and large-sized banks decided to build Internet banks quite separate from their traditional "bricks and mortar" operations. The onslaught of such stand-alone Internet banks as E-Trade forced them into head-to-head competition. Within 5 years, almost all these banks had either closed the doors on their Internet subsidiaries or integrated them into the parent organization, offering a full suite of products and services online as a complement to what was offered in branches or through call centers.
As Porter points out, the key is not whether to use the Internet or not, no business today can afford to ignore the Internet technology. The trick is figuring out how to use the Internet in ways that build on sound business practices and strategies. In essence, the Internet has become a critical factor in how businesses position themselves strategically. Trade-offs between Internet and traditional approached will factor into every link of the value chain from inbound logistics to after-sales service.
The Invasiveness of Information Technology