The net is full of own goals

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One way of analysing e-commerce take-up is to examine the possible range of so-called business models and then worl out if businesses are actually using them.

One way of analysing e-commerce take-up is to examine the possible range of so-called business models and then worl out if businesses are actually using them.

To some extent, this assumes that using more solutions is better than using fewer or no solutions. It also assumes that e-business can be developed incrementally.

A completely different approach was that taken by the government of Singapore, which looked at a desired end state 10 years ahead - in this case for the public policies and practices of Singapore. Energies were then devoted, top down, to bring about all the changes necessary to achieve that end. This approach assumed a holistic perspective, and challenged the scope for incrementalism.

A more resource-based view of e-business adoption would predict that since organisations at any given point have varying degrees of resources, they start at that point with varying abilities to innovate and change.

Some will gain advantage as they can, due to their superior resources, and set developments in train that competitors with insufficient resources have no hope of being able to achieve.

One peculiarity of e-commerce is that many players have suffered from a prolonged period of loss-making activities. Part of the reason for losses is the investment in competencies which can increase future capabilities. But much of the loss-making can barely be regarded as an investment so much as a cost, and therefore many of the early adopters will have simply wasted their money.

Governments around the world are pushing their small and medium-sized busin-esses to "go online". There are big initiatives in the UK, Australia and Canada, for example. But there appears to have been very little analysis of how important e-commerce is for any given sector. We have also noted how the support materials produced by consultants as part of the propaganda tend to emphasise the benefits but not the risks or even the real need to engage in e-commerce.

There is now an increasing need for both large and small organisations to understand the "map" of e-commerce so they can decide what is an attractive or essential destination, and what is dangerous ground. We have developed a two-dimensional map based on the extent of the strategic e-commerce threat posed by competitors, contrasted with the cost of meeting that threat.

Simplifying the grid to high, medium and low threat, even this very stylised approach enables us to reach early conclusions on actions needed. For high threats and low or medium costs, we propose that businesses have little option but to invest in e-commerce. In the high-cost response, it may just be questionable whether the benefits will outweigh the costs.

Equally, where there is low threat from e-commerce, there is little incentive to invest. But if the investment is low, it may be worth it. For a medium threat, low and medium investment may be justified, but probably not high investment.

While government ministers exhort businesses to innovate and update, a basic tool such as this would help those companies gain some sense of perspective in the midst of all the propaganda.

* Clive Holtham is Bull Information Systems Professor of Information Management at City University Business School. Email: c.w.holtham@city.ac.uk

Professor Holtham writes each month in 'eB-21', the new magazine for e-business strategists from TBC Research. To register for a free copy, go to: www.eb-21.com

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