Brick-and-mortar companies looking to compete with startup dot coms will have to do more than put up a thin E-business storefront, Peter Solvik, senior VP and CIO of Cisco Systems, said during his keynote address at the E-Business Conference in New York today.
To become Internet enabled, companies must adopt a comprehensive inside-out approach to their Internet strategy, he said. "Brick and mortars need to develop a broader view of the Internet," Solvik said. "It's rare to find companies looking as comprehensively as they should."
Four elements are critical to the success of any Internet strategy, he said. First, companies must have leadership from senior management to make sure that E-business development is one of the top five company priorities. They must also have a structure in place to define roles and responsibilities within the company. Next, a scalable and reliable infrastructure based on standard tools is necessary to keep up with business demand. And finally, recruiting, retaining, and cultivating personnel are critical to maintaining success.
Solvik recommends using a financial portfolio approach for building an E-business strategy. This approach separates initiatives into a value matrix ranging from low-risk to high-risk investments. "Using a portfolio approach, companies can balance their E-business strategy based on what they want to accomplish," he said.
Within this model, E-business strategies encompass basic internal processes such as streamlining human resources as well as larger online endeavors such as launching a separate Web site. "If you focus only on breakthrough strategies, you will fall behind your competitors," Solvik said. "You need to transform everything you do."