| IBM has come to the realization that business is entering a new era, an era where customers, suppliers, manufacturers, and every department in the corporation will need tighter integration, and greater information and application requirements to react to the new marketplace. At the other extreme, corporations must deal with limited or reduced spending, and greater review and control over internal budgets. Senior management and shareholders demand lower costs and greater efficiency each year. Speed and time to market are the driving factors. Customers once needed products in a few days or weeks. Now customers frequently require delivery in hours. Whoever delivers the best quality in the shortest possible time scale at the best price will win the business. There are no exceptions. This is the environment we discussed in the first section of this book. If corporations do not act accordingly, we will see a repeat of the dot.com bust where business failed to adjust to changing customers needs. To achieve this new business objective will require a transformation for almost all corporations. It will need the e-business on demand approach. As corporations need to respond to their customers' changing requirements, they will need the speed and flexibility of e-business on demand solutions. This new business model requires a corresponding on-demand technology environment that matches and is closely aligned with the business. If the business is moving fast, the systems and solutions must match in partnership. IBM defines e-business on demand as An enterprise whose business processes is integrated from end-to-end across the company and with key partners, suppliers and customers—can respond with speed to any demand, market opportunity or external threat. E-business on demand will not happen quickly, and many companies will need to rethink their strategies to move to this new business model. E-business on demand will be different from just e-business. IBM has identified four steps necessary for an e-business to be classified as on-demand. -
Responsive— Companies must have the technology and operating environment to be responsive to a new dynamic business model–to react quickly to unpredictable or unplanned changes in orders, supply, or demand, market changes, client needs, partner changes, supplier demand, or unexpected moves by competitors or new product entry. Companies must change in hours—not days, weeks or months. -
Variable— The new companies must have a flexible and variable structure to be able to respond quickly. This means creating new cost structures and business models that are driven by speed. This can increase corporate productivity, drive down costs, and managing risk levels. -
Focused— If corporations concentrate on core competencies that differentiate them from their competitors, they will increase market share. Tight integration with a set of like-minded strategic partners who think and act the same way will drive new sales and greater profit. -
Resilient— The new model corporations will need to be able to operate globally, 24/365 in all markets. However, when changes are made, they need to be implemented without any difficulties or delays. Robust procedures are necessary, to meet the unexpected changes that will drive the marketplace or to respond to threats, such as denial of service, floods, fire, or unusual spikes in orders. Corporations that concentrate on these essential core steps, shown in Figure 7.1, will need to manage the company as a whole—total holistic management. This means corporations that are geographically dispersed in different time zones. This is more than just operational efficiency; it is about opening up new value and profit. Figure 7.1. The four categories that make up e-business on demand capabilities—and, in turn, lead to profit. 
Corporations that enact and install e-business on demand operations will be able to react to new business opportunities in many new ways. -
A nationwide television news service can react to an overload of its Web site when a new or exciting story breaks. This means that millions of Internet users can quickly access the latest news events as they happen in real time. Organizations such as CNN would have benefited from an e-business on demand environment during the terrorist attacks on September 11, 2001, when the Internet traffic at their Web site was doubling every few minutes. -
Shifts in global stock markets could be analyzed in real time to provide banks and brokers the means to uncover new stock opportunities and recommend them to clients immediately by cell phone, email, pager, or other chosen method. Also, as an audit control mechanism, banks can monitor stock trades to ensure that they meet federal guidelines, thus preventing or uncovering fraud. -
In all types of manufacturing industries—large, medium, or small—from office staples to aircraft to automobiles to customized Chinese lanterns, inventory management could be driven by e-business on demand. This means holding inventory parts for minutes rather than weeks or months. The corresponding cost savings will be enormous. -
Supermarkets and megastores can order new products as the demand increases. If a product becomes popular overnight and thousands are needed, e-business on demand can provide the necessary order fulfillment. Thus, shoppers will not be disappointed nor will they see store signs saying, "On order—more expected next Tuesday—please check back then." When demand fluctuates and a store is vastly overstocked on an item, excess inventory can be quickly delivered to stores that need it. |
