The Real World:
The E-Business RevolutionFaster Than a Speeding Bullet
Janine Waclawski
W. Warner Burke Associates, Inc.
Electronic Commerce will radically change every business process from
marketing and customer service, to accounting, payroll, order management,
distribution, and procurement in almost every industry from media to machine
tools.
Michael Taylor, Director, Arthur D. Little
E-business (e' biz' nis) The transformation of key business processes
through the use of Internet technologies.
IBM E-Business Website
Within 10 years, to be a member of society and not be online will be a
little bit like living in Los Angeles and not having a car.
Paul Saffo
Happy E-New Year!
First things first, I want to wish each and every one of you (I am assuming
that at least two other people besides the editor actually read this column), a
very happy New Year! Yes, I would like to wish a Happy New Year to you all as I
sit here writing this column in October! One of the inalterable realities of
life on this planet is that in the world of print media copy must written far in
advance of one's actual date of publication. Which brings me to my topic for the
first column of 2000e-commerce. As I said, things in the world of the printed
word move pretty slowly. Of course, the Internet is changing all of this.
Nowadays you can put the great American novel up on the World Wide Web sooner
than you can say F. Scott Fitzgerald. So, what am I getting at here? Basically
the Internet and all its applications are rapidly changing the way things work
in this world. Another case in point, online stock transactions. Now you can buy
and sell more shares of AOL faster than you can say "day trader."
The Internet is changing not only how fast we can communicate with one
another either by e-mail or by electronic publishing but more importantly it is
increasing the pace of business. And as the saying goes, the business of America
is business. So, in a nation such as ours with an economic system built on the
principles of capitalism and free enterprise, doing business on the Internet
(e-commerce) has massive implications for our way of life.
Are You Ready for Some E-Business?
So what is an e-business? Basically it's doing business on the Net. One
interesting thing about it all, as always, is the hype. For example, is it just
me or has anyone else out there noticed the profusion of e-business and
Internet-related commercials on TV these days. Finally, football season has
become interesting to me. After 33 years of watching (first I was forced to
watch it by my parents and now by my husband), there is finally something that
grabs me. It's not whether or not any given team's offense can establish a
consistent running game, and no, it's not whether or not Mike Ditka will finally
get fired, and no, it's certainly not whether Dan Marino will ever make it to
the Superbowl. About these things, I care not. What I do find compelling are all
the new Internet commercials! It used to be when one turned on a football game
the most intellectual commercial to be found was either a bunch of frogs and
lizards talking about beer or a bunch of sportscasters talking about beer (I
guess those are the same commercial, aren't they?). Well, no longer, now there
are only four types of ads: Lenny Kravitz singing "I want to get away"
to sell SUVs; investment ads featuring well-known sports figures who berate
their opponents by saying "I bet you can't even spell Dow Jones;"
e-trading companies who all guarantee the lowest cost per trade (some will even
pay you) in the fastest amount of time; or commercials about how using XYZ
systems to maximize your use of the Internet or help launch your e-business can
give your company that much needed competitive edge.
So, while I certainly do welcome the diversity that these Internet ads bring
to my Sunday afternoons and Monday nights, what I find so ironic about all this
is that these commercials would lead you to believe that everyone in the world
and their grandmother is not only on the Net but doing business on the Net. The
fact is, this is not so. Did you know that only 32% of the U.S. population (80
million people) is on the Net (internetstats.com,
1999)? Not even every household in America owns a TV, let alone a computer.
Moreover, the number of people on the Net gets much smaller when you look at the
world population. Specifically, estimates show that only 3_5% of the entire
world is on the Net (200 million to 300 million people). However, just to give
some perspective on the rapid growth of the Internet, if we look back only 6
short years ago the number of people on the Net was significantly smaller.
Specifically, in 1993 only 3 million people in total were on the Net. That
equates to less than 1% of the world population. So, what am I getting at here?
Well, I think it's obvious that if the current trend of increasing usage
continues, within the next decade the Internet and e-business will explode and
become primary modes of communication and commerce for the mainstream (at least
in the U.S.). However, we aren't there yet. So, as my football-loving husband
has been smart enough to point out to me, it's all about establishing a presence
in the marketplace now to gain dominance in the future. Simply put, those
companies that can success-
fully promote themselves as Internet leaders today will be the ones that survive
and thrive in the world of e-commerce tomorrow. Even if they don't turn a profit
for the first few years like amazon.com_talk about a loss leader.
It's Christmas Time and There's No Need to Be Afraid
Personally, I love the Internet. It's the perfect communication and shopping
medium for a misanthropic hermit like me. In fact, last year, I did at least 90%
of my Christmas shopping online. Of course given my aforementioned antisocial
tendencies, I didn't have that many gifts to buy anyway. Seriously though, the
real reason I love online shopping is because I hate the following 3 things more
than just about anything else in the world (a) crowds, (b) getting up early to
avoid the crowds, and (c) shopping because of the crowds or getting up early to
avoid crowds_see points a and b. So, as you can tell, Christmas shopping used to
be a big problem for yours truly. But luckily, online shopping has changed all
this. Yep, no more fighting crowds, waiting in line, swearing at your fellow
holiday shoppers when they cut you off for a parking space, getting bumped,
pushed and shoved in jam packed shopping malls, screaming kids, whining parents,
and listening to bad renditions of your favorite Christmas songs over and over
again until they are no longer your favorites. All in all, I think online
shopping has very positive implications for fostering more holiday cheer. I know
it has for me.
Further, I don't know about other parts of the country but shopping in the
New York metro area at holiday time (for the very reasons mentioned above) is
enough to turn even the most good-intentioned, generous, congenial, pro-holiday
person into a bad-tempered, ill-willed, pernicious scrooge! It's the time of
year when we are supposed to wish for peace on earth and goodwill towards men
(and women, too) but instead, often end up having thoughts that would rival
those of the unibomber (well, maybe those are just my thoughts). However, with
online shopping there is no need for this negativism and thoughts of genocide. I
can stay at home snuggly warm in my house and amass alarming amounts of
credit-card debt without even speaking to another human being. Life is good.
An E-Business, an E-Business, My Kingdom for an E-Business:
Some Internet and E-Commerce Factoids
So, friends (if I haven't scared you all off), it is easy to see why
e-commerce is such an appealing idea. You can shop for all sorts of products and
services (personal and business-related) in the comfort of your own home,
office, airplane seat, yacht, or whatever. The only traffic you have to fight is
on the Net and you can communicate, buy and sell with people and organizations
all around the world in nanoseconds! Hence, all the hype and genuinely deserved
excite-
ment about the Internet and e-commerce. Given all this, below are some factoids
that may interest you.
According to Forrester research, U.S. online retail sales for 1999 will
total $20.2 billion. By 2004, sales will hit $184 billion.
According to Media Metrix, the six largest e-commerce sites are Amazon.com,
Beyond.com, Barnesandnoble.com,
Buy.com, CDNow.com,
and Egghead.com.
The leading online language is English (92 million people), followed by
Japanese (9 million), French (7.1 million), German (6.9 million), Chinese (4.6
million), Swedish (3.3 million) and Korean (3.3 million).
Five years ago, a new Wharton graduate with experience in e-commerce
could expect a starting salary of $62,000. Today, those offers start at $80,000,
about $10,000 more than other business fields.
At Bentley College, a new MBA concentration known as E-Business and a
graduate-level certificate in e-business are offered, bringing in $500,000 in
additional tuition this fall along with at least $7 million in grants and
contributions for program support and development.
Georgia Institute of Technology has received $1 million from corporations
to establish e-commerce research centers and will offer e-commerce certificates
or concentrations next year.
The average projected estimate for online advertising spending in 1999 is
$2.61 billion.
The average projected estimate for online advertising spending in 2002 is
$8.9 billion.
In 1999, there will be 39 million Americans buying online. By 2002, there
will be 67 million Americans buying online.
Net Future: Seven Trends in Cyberspace
Recently, while poking around online to do my "research" for this
column, I came across an interesting book. In case you hadn't figured it out by
now, the primary input for most of my columns is stuff I find on the
Internetso this is pretty normal for me. Basically, I am a lazy person. As an
aside, I think laziness must be correlated with online activity. As a further
aside, I think we need a new term similar to couch potato but for people who are
always online. I guess the appropriate moniker would be an "e-potato"
but I don't think that's clever enough. Anyway, back to my book story. I placed
my express checkout order on Barnesandnoble.com
and it arrived at in my office mailbox 2 days later. Now, that's my idea of
shopping. Interestingly, I also had the option of buying the book in electronic
form instead of hard copy. However, that's a little too advanced for me. If I
ever get around to getting a Palm Pilot then maybe, but for now I like having
something tangible to read. The book called, Net Future: The 7 Cybertrends
That Will Drive Your Business, Create New Wealth, and Define Your Future, is
chock full of factoids, stories, and trivial statistics (all the stuff I love)
about the Internet and e-commerce. For example, according to the author Chuck
Martin, the "Internet is the fastest-growing medium in history. It took
radio 38 years to acquire 50 million listeners. Television took 13 years to get
50 million viewers. The Internet achieved 50 million users in just 4
years." Now of course this doesn't take the earth's geometrically
increasing population into account, but it's a pretty impressive factoid
nevertheless, certainly worthy of a nod in this humble column, if not CNN.
However, for those of you who want more substance, the book also has some
predictions about how the Net will change the future of business, so it does
have some meat to it.
In order to provide you patient readers with some actual substance beyond my
inane ramblings about why I hate Christmas shopping, below is a brief definition
of each of his trends, followed by examples I came up with for most of them.
Although the trends are a bit high on the jargon scale, I think the ideas
expressed in them are valid. In any case, read these and make up your own mind.
The Seven Cybertrends:
1. The cybereconomy goes Main Street. Traditional businesses will go
online and will need to provide their customers with fast and easy service.
Companies like Barnes & Noble (barnesandnoble.com),
and BlockBuster Video (Blockbuster.com)
are good examples of this.
2. The wired workforce takes over. Everyone will eventually be on an
Intranet at work and will be linked to many other people thus creating virtual
work communities which will change the nature of the workplace for both
individuals and companies. Telecommuting is a current example of this.
3. The open-book corporation emerges. Boundaries between the
corporation and the outside world, including customers and suppliers, will be
erased.
4. Products become commodities. A shift to real-time, flexible pricing
as product value is established moment by moment. Ebay,
Yahoo auctions and Priceline.com
are good examples of this. Priceline is a service where you can determine the
price you want to pay for grocery items online.
5. The customer becomes data. New technologies for analyzing and
predicting customer behavior in real time will require companies to reorganize
to be more customer-centric.
6. Experience communities arise. People will access and use global
communications and therefore will be able to amass large amounts of information
instantly.
7. Learning moves to real time all the time. Electronic networking
will create a new generation of empowered and independent learners. Online
distance learning, user groups, and listserves are good examples of this.
The Employee Becomes Data:
Surveys and Feedback in E-Business Companies
In an effort to bring all this discussion about the Internet and e-commerce
back to the world of I-O land, I thought it would be a good idea to focus on
something that a lot of I-O people can relate tothat is, data. More
specifically, anything that has to do with e-commerce and the Internet is about
data of some sort. For example, collecting data from multiple people about
preferences, purchasing behaviors, sites visited, attitudes, opinions, and so
forth, are all vital to doing business on the Net. I-O practitioners work with
this same kind of information but in a different context in the form of
organization surveys and multirater (i.e., 360-degree) feedback. So, I thought
it might be interesting to know how companies that are e-businesses, or those
that might be entering the e-business arena in the future are using their
advanced knowledge of technology to collect and use these types of behavioral
and attitudinal data in their own organizations.
Beyond my own personal interest in surveys and 360o feedback,
these are also good I-O topics, considering the predictions of some of the 7
cybertrends. In particular, if you consider cybertrends Number 3 the
open-book corporation emerges, and 5the customer becomes data, an
extrapolation of these is that the employee (who is now also the customer)
becomes data. Just as organizations will build databases of individual customer
preferences and buying behaviors, they will build employee databases as well.
Why employee databases, you may ask? Well, in the information age, we are all
data points comprised of a series of other data points (e.g., likes, dislikes,
preferences, skills, abilities, experiences, etc.). These data points are a
commodity that will be harvested and harnessed by organizations whether they are
our employers or providers of services and products. In the world of e-commerce,
the process of examining databases to construct predictive models of consumer
behavior is what is known as datamining and is one of the key strategies used by
e-business organizations to understand, better serve, and sell more to their
customers. By developing a profile of buying habits and preferences, these
organizations can anticipate customers' needs and meet them even before they
have been articulated. I think this process of datamining will be applied to
employees as well.
Similar to customer databases, employee databases will consist of many types
of information from date of birth, employment history, and educational
background, to performance appraisal ratings, performance measures, behavioral
assessments, personality factors, learning preferences, and workplace attitudes
and opinions. This information will be critical to organizations in the
recruiting, selection, promotion, and termination process. Just as organizations
create customer profiles, they will create employee profiles. To some extent,
this is already beginning to happen. As the saying goes, knowledge is power.
Therefore, assessing the behaviors, preferences, and attitudes of employees
(things typically done in any survey or 360o effort) will be an
essential part of most companies' HR strategies. In order to select, retain, and
develop the right people, companies will need to make use of this kind of
information. Hopefully, we as I-O psychologists will be involved in this
process.
So without further ado, here are my questions for this issue:
1. How would you describe the nature of your organization's business? Is it a
high-tech company, a computer company, an e-business or something else?
2. Does your organization use surveys or multirater (360-degree) feedback? If
so, for what purposes (e.g., executive development, organization development,
culture or climate assessment, performance management, human resource planning,
etc.)?
3. In your opinion, what are the primary benefits of using organization
surveys and multirater feedback systems?
4. What methods does your organization use to administer surveys and 360o
feedback (e.g., paper and pencil, online, disk-based, voice response unit, fax
back, etc.)?
5. What (if anything) is different about conducting a survey or implementing
a feedback system in a high-tech or e-business company than doing so in a more
traditional organization?
***
From: colihan@us.ibm.com
To: J9151@aol.com
Janine, here are my responses. Regards, Joe
1. We are a high-tech computer software, hardware, and services business.
E-business is our mantra these days, and in fact, IBM coined the term.
2. We use surveys for organizational assessment and change. We also use
360-degree feedback for performance assessment for all employees, managers, and
executives.
3. With a very large and complex organization, online or e-business methods
for gathering such data are the most viable cost-effective methods available.
Surveys can help drive organizational change providing facts and data for
decision making, and formalized performance feedback helps for individual
development as well as facts and data to management to make fair and accurate
performance assessments.
4. We use online or e-business administration methods for nearly all such
data gathering efforts.
5. There may be more trust and acceptance of online systems within an
e-business company as many more employees will be familiar with using computers
in their day-to-day work. Also, in an e-business company, there would appear to
be more tools available to make remote/mobile working possible. This makes a
formal feedback system even more necessary to give managers an accurate view of
their peoplemany of whom may be working remotely.
Joe Colihan, Ph.D.
IBM Global Employee Research
***
From: Thomas.Norman@corp.sun.com
(Tom Norman)
To: J9151@aol.com
1. We are a computing company. We sell hardware and software to support
e-business and e-lifestyles.
2. Both employee surveys and 360-degree feedback instruments (managers only)
are used.
3. Organization surveys give employees another voice in an organization. Sun
uses employee input to eliminate the things inhibiting them from performing in
their jobs. The data has been used to make several improvements to worklife at
Sun over its 4-year history.
4. Web-based surveys and 360o feedback.
5. Participation rates in the survey are about 25%. Everything at Sun is
voluntary verses mandated from above.
Tom Norman
EQI Program Office
Sun Microsystems
***
From: Jennifer_Hutcheson@Dell.com
To: J9151@aol.com
We are happy to respond. As an aside, I am just finishing up your new book
(with Dr. Church) on organizational surveys. I've really enjoyed it.
1. We are a computer company/high tech.
2. We use 360o surveys for employee development. We also do
employee attitude surveys annually.
3. Allows the individual to get objective, constructive information about
his/her strengths and developmental opportunities.
4. Online.
5. I really don't have any experience in a non-high tech company, so I'll
have to pass on this question.
Jennifer Hutcheson
Dell Corporation
***
From: franz.deitering@sap.com (Deitering,
Franz)
To: J9151@aol.com
Dear Janine, thanks for your mail.
1. SAP is a high-tech company in transition to e-business.
2. We use all kinds of surveys: (a) SAP Employee Survey as an Intranet- based
census survey every 2 years as a strategy, alignment, involvement and change
program; (b) Feedback Survey interim to SAP ES focusing on strategy and
leadership with a link to bonus; and (c) 360-degree feedback for leadership and
team development.
degree feedback for leadership and team development.
3. The benefits are SAP (i.e., better Satisfaction And Performance).
4. We use mainly online formats.
5. More speed and a high tech approach.
Franz Deitering
SAP University Human Resources Development
***
From: salvatore.v.falletta@intel.com
(Falletta, Salvatore V)
To: j9151@aol.com
Janine, Attached are my responses for your survey project. Cheers.
1. Founded in 1968, Intel is a global high-tech company. It supplies the
computing industry with the chips, boards, systems, and software that are the
"ingredients" of computer architecture. Intel's mission is to be the
preeminent building block supplier to the connected computer industry (e.g.,
original equipment manufacturers, PC users) worldwide.
2. Intel uses surveys and multirater feedback tools. Surveys are used for HR
research and to assess various aspects of organizational life and behavior at
both the corporate and business unit level. 360-degree feedback tools are used
to measure managerial and leadership effectiveness. Similar multirater feedback
surveys are also used for performance appraisal/management purposes. Below is a
brief description of how surveys and feedback are used at Intel.
Organizational surveys
Employee Opinion Survey. 100+ item survey administered annually for
corporate strategic and HR planning purposes; attempts to measure various
aspects of organizational health and behavior (e.g., culture, work group
climate, leadership, management practices, and overall organizational
effectiveness); stratified sampling approach is employed (usually 15% of
population).
Business Unit Assessment Surveys. Shorter, customized surveys
administered quarterly, bi-annually, or annually for an overall organizational
assessment (i.e., a pulse of work group climate) within each respective business
group. These assessments vary in methodological approach and focus from business
group to business group. The business groups drive these assessment
effortshowever, we (the HR Research group) do provide consultative and other
services.
360/Multirater Feedback Tools
Survey of Management Practices. A survey designed to obtain
360-degree feedback on a manager/supervisors' overall effectiveness. The results
of this survey are used for coaching and training/development purposes
Survey of Leadership Practices. A survey designed to obtain
360-degree feedback on a senior managers/leaders' overall effectiveness. The
results of this survey are used for coaching and training/development purposes
Performance Appraisal System (i.e., FOCUS). The FOCUS process is
Intel's annual performance appraisal/management system. As part of the FOCUS
process, employees are responsible, in collaboration with their managers, for
obtaining multirater feedback on their overall job/work performance.
3. Surveys and multirater feedback systems are beneficial because they
provide: an economical way to gather information and data; an effective method
to measure employees' and/or customers' attitudes, opinions, perceptions,
beliefs, intentions, and behaviors; a quick way to reveal individual, group and
organizational strengths and opportunities for development, change, and
improvement; an effective way to provide feedback for coaching, decision making
and planning; a preferred method for identifying/pinpointing areas of concern,
and an effective and common method/approach for conducting HR and organizational
behavior research.
4. Surveys. Primarily Intel uses web-based/on-line survey tools for
administration and collection; some optical scanning technology is utilized for
those who do not have access to the web.
Multirater feedback: optical scanning technology is used for the Survey
of Management Practices and Survey of Leadership Practices
instruments. Data administration, collection, and analysis are handled by a
third party vendor. A traditional paper-and-pencil survey is used to obtain
multirater feedback as part of the process.
5. I think the key difference is the rate of change high-tech companies
experience. High-tech companies, in particular, are in perpetual state of flux
(e.g., rightsizing, acquisitions and mergers, talent wars, turnover, etc.). As
we know, a source of competitive advantage is its human capital. Thus,
attracting, developing, and retaining top talent is critical to the success of
any high-tech firm. In short, we must be able to design and implement
technologically sophisticated survey and assessment systems to provide timely
and accurate data for human capital decision making and planning.
Salvatore V. Falletta, Ed.D.
HR Survey and Assessment Manager
Intel Corporation
So, it appears from my contributors that companies in the e-business
and high-tech arenas are, as one would suspect, taking advantage of electronic
technology to administer survey and 360o initiatives. As for the uses
of these interventions, obviously they range from collecting attitudes and
opinions to providing facts for decision making and making changes to improve
the quality of worklife.
Online response rates also seem to be an important issue. I certainly agree
with Joe's observation that employees in e-business organizations are probably
more comfortable with the online processespecially with respect to using the
technology and confidentiality. Often, clients I work with are interested in the
possibility of online implementation. However, when we get closer to the
administration of the survey or 360o process concerns about their
employees' e-literacy, the confidentiality of online responses, and the
compatibility of the organizations systems, lead to a decision to go with more
traditional methods (i.e., paper-and-pencil). I think this too will change in
the very near future given the potential cost savings of electronic data
collection methods and most people's increasing reliance on and facility with
online applications. Once the barriers of technology and confidentiality have
been removed, this method makes the most sense. For example, questionnaires can
be sent to the entire organization in a matter of seconds and responses can be
collected online and analyzed immediately, thus removing a lot of the costs
associated with paper-and-pencil formats (i.e., printing, collating, mailing,
returning, entering data, etc.). If the wired workforce does truly take over, as
Chuck Martin has predicted, then this will surely come to pass.
As ever, I would like to thank my contributors Tom Norman, Joe Colihan, Franz
Deitering, and Jennifer Hutcheson for their time and effort. I would like to
give special thanks to Sal Falletta for his thorough comments and for helping me
select the right contributors for this column. Finally, thanks to AHC for his
willingness to review my draft and provide feedback. If you have any feedback
for me, please feel free to contact me either by email at J9151@aol.com
or at W. Warner Burke Associates, Inc., 201 Wolfs Lane, Pelham, NY 10803 (914)
738-0080 (tel.), (914) 738-1059 (fax). I would love to hear from you!
References
Cohen, A., & Kushner, D. (1999). E shopping spree, PC Magazine, 18(20),
101_118.
Martin, C. L. (1999) Net future: The 7 cybertrends that will drive your
business, create new wealth, and define your future. New York: McGraw-Hill.
www.emarketer.com/estats
www.internetstats.com/estats
www.nytimes.com/library/tech99/09/biztech/technology
January 2000 Table of Contents | TIP Home | SIOP Home