Where's the Beef Online? It's Right Under Your Nose

Each time we read about another dot-com company being formed, we find ourselves thinking back to that famous advertising line in the Wendy's hamburger commercial ... "Where's the beef!"

Many business-to-consumer companies are struggling to stay in business, especially now that the investor frenzy has cooled toward "B2C." Investors no longer value companies that produce no profits. And that is spelling doom for many pure Internet retailers who require millions of dollars to build market share and distribution.

This is a great opportunity for traditional retailers who already have a strong "bricks and clicks" infrastructure in place. But we continue to be amazed at how many companies look upon ecommerce as a separate business. They fail to recognize that the real value in their "B2C" offerings comes from linking the customer seamlessly to both their "physical" and "virtual" stores, and expanding their retail franchise to give customers even greater selection and choice.

Of course, we all know that when one thing goes out of fashion, another takes its place. Now we have the business-to-business frenzy, with hundreds of electronic marketplaces coming out of the woodwork.

We have a concern that many of these exchanges are focused on "wrong-headed strategy." The goal seems to be for the retailers to band together to get a better price from suppliers. Following this strategy only leads to widening the gap between retailers and suppliers, and where is the value in that?

In our estimation, the real "win-win" B2B opportunities are in retailer/supplier collaboration and joint planning to take inefficiencies out of the supply chain model, and forge new partnerships in product development and promotion.

So "where is the beef?"

It's in business-within-business (BWB), or e-enabling your own enterprise, where leading companies are finding the real "gold."

Cisco Systems puts more than $1 billion on its bottom line each year by making its entire company e-enabled. Microsoft has saved millions in just e-enabling some of its personnel processes (such as filing and paying expense accounts). IBM, General Electric, Boeing and hundreds of other companies are realizing huge operating efficiencies by e-enabling their day-to-day business processes within their enterprises.

How is the retail industry faring with its BWB initiatives? Not very well. Many retailers are focusing only on B2C and B2B initiatives. These retailers are ignoring the growing body of evidence that demonstrates that there are significant opportunities to generate substantial operating efficiencies and "bottom line" profit improvements by spending time to make their own internal process e-enabled.

And we are not just talking about your accounting, management reporting and human resources functions. There are many other time-consuming and data-intensive tasks that can be significantly simplified through e-enabling. Take training, for example. Retailers spend hundreds of thousands of dollars building a training infrastructure and establishing training centers in each store. It doesn't make sense to spend those dollars when the Net makes it so easy to e-enable this activity.

It's another one of those common sense ideas. "Why not take the training to the trainee, instead of the trainee to the training."

There is "beef in the Internet bun." It just needs a few more companies in the retail industry to recognize and take advantage of it.



Ken Fobes is chairman of Strategy Partners Group, a retail consulting boutique specializing in Demand Chain Optimization and the e-Enabled Enterprise. His email address is kfobes@spgusa.com..