The Internet is e-commerce. So is exchanging vital information with a supplier or business partner. Electronic commerce can occur over means other than the Internet, but the Internet has emerged as the most cost-effective and widely used method for personal and business communication.

The transformation of business processes from paper to electronic form is occurring at a rapid pace. E-commerce is helping businesses streamline a vast array of transactions, including ordering, pricing, billing, payment and customer service. At companies where Internet technology has been applied most effectively, information flows without delay or human intervention between functions such as sales, manufacturing, shipping, accounting and customer support. The winners in the new Internet Economy are the companies who have taken a common process like order entry and reduced the time required from fours days to four minutes, and the paper involved from dozens of sheets to none.

Every function can benefit from Internet-enabled e-commerce. Marketing departments of any size can reach new customers regardless of distance at a dramatically reduced cost-per-lead. Human resources teams can recruit, train and support employees at sharply lower costs and with fewer staff members. The flow of information between suppliers, manufacturers, and distributors can be handled so smoothly that "I lost the paperwork" ceases to be heard.

Most importantly, customers can receive more choice, better service, and faster delivery thanks to e-commerce over the Internet

The digital economy. The air is thick with buzzwords about the impact of the internet on business. Beyond the talk, however, something big is happening. The Internet is not a fad, nor a curiosity. It is a revolution occurring on a scale and at a speed greater than any previous development in business history. But what does this revolution mean for the owner or manager of a small to medium-sized business? Is all the talk about electronic commerce only relevant to large businesses with big technical staffs? No, it is not. The Internet Revolution is affecting every company, no matter its size. Small- and mid-sized businesses can equally share in the benefits of electronic commerce. And, they are equally vulnerable to being left behind if they do not adopt new business models.

The Internet Revolution is for Everyone!
The key factors for success in business have been the same for centuries---satisfying customers with a valuable product or service, and doing so at a profit. The business imperatives of value, customer focus, competitive differentiation, and operational efficiency are still priorities today. What have changed---rapidly---are the tools available to help businesses achieve their objectives. Over time, tools such as the telephone, typewriter, fax machine and pager have become almost universally adopted by businesses of all sizes. Businesses that fail to capitalize on this change will not grow as fast as they wish; they may not even survive. That's the reality of the new Internet Economy.

Throughout most of the computer age, large businesses have been the first to use and benefit from new information technology. The primary reason they were the early adopters was that information technology was so expensive and complex that only an organization with lots of money and people could afford the investment. The Internet has changed that situation. The tools and benefits of the Internet Revolution are available to businesses of all sizes---from the sole proprietor, up through small- and mid-sized firms, to Fortune 500 businesses.

The Internet, like any technology, is only as useful as the applications to which it is applied. Connecting a business to the Internet is only the start of the process. Once connected, a company has to do something useful. One of the most compelling categories of Internet-enabled applications is electronic commerce, or e-commerce.

Thriving, or surviving, with e-commerce:
The old saying claimed that the three most important factors for a business were location, location and location. In the Internet Economy, location is being replaced by "agility." By agility, we mean the ability of a company to adjust strategy or tactics in response to a changed business environment. The most successful companies anticipate the need for change and act in advance of the competition. The least successful companies either adjust too slowly, or ignore the need for change altogether. Forward-looking companies have used e-commerce to enhance their agility and improve their competitive advantage. But with the rapid rate of change occurring in the Internet Revolution, e-commerce will soon become a requirement for survival, not a tool of innovation. Why? Because the benefits of e-commerce---reduced costs, faster time-to-market, greater customer loyalty, and broader market reach---are too compelling for a company to cede to its competition.

Today, it is impossible to imagine a large-scale manufacturer who doesn't use assembly lines, a consumer-goods company without a toll free telephone number, or a field salesperson without a pager. E-commerce over the Internet will become an essential business tool on this same scale---and probably sooner than you think.

E-Commerce in Action:
By automating many routine functions, e-commerce can save companies, customers and suppliers time and expense. But it can do much more, as the following scenarios demonstrate.

The Component Distributor:
The biggest problem for a small business distributor of electronic components is the highly fragmented nature of the market. A major customer might place an order for 5,000 parts in the morning, while a dozen different engineers might each place orders for 10 or 20 components in the afternoon. For the distributor, this can require having a large group of telesales staff on standby, as well as a field sales force with too much of its time taken up with small orders. An e-commerce solution provides a vastly improved alternative.

The distributor publishes its entire catalogue on a Web site, giving customers the ability to check prices, modify specifications, and place orders on-line. Through a password-protected firewall, customers can check their credit details and track the progress of orders. The sales force is freed to focus on servicing the biggest accounts. Customers large and small receive better service, and the distributor increases sales from all sectors.

The Logistics Specialist:
A global freight carrier connects 50 offices worldwide over a company network, and then gives its largest customers in each country secure access to parts of that internal network. When customers need to book space aboard an airliner or ship, they can log on to the carrier's network, check availability and make the booking. They also can track the progress of a shipment. This e-commerce application allows the carrier's customers to offer improved service to their own customers. For example, if an end-customer calls about a delivery, the person taking the call can log on to the carrier's network as if it was his or her own system and give an immediate answer.

For the carrier, the e-commerce solution also provides valuable management information about the way its customers are using the service. New services can be developed to exploit opportunities identified at the point of sale, and cross-selling of existing services is simplified.

The Virtual Factory:
A medium-sized engineering company secures a major new contract that will consume most of its production capacity for the year. By deploying an e-commerce solution, it can service the new customer and maintain supplies to its existing customer base. Though it is based in the Pacific Northwest, the firm partners with factories in Virginia and Texas to secure the extra capacity it requires. By linking both locations into its own network via a virtual private network (VPN), the production team can supervise production lines at all three factories.

The production manager runs the three factories as though they are one. From his desktop PC (or remotely from his laptop when he's on a site visit), he can monitor performance, check schedules, and maintain production using an Internet browser that presents data from the three separate production systems in the same way.

The financial transactions between the three partner organizations are also handled over the network. Orders and payments are processed monthly on the basis of data drawn from each factory's inventory and sales databases, simplifying what might otherwise be a complex and expensive accounting process.

The Home-based Enterprise:
A freelance advertising copywriter with an office in a spare bedroom wants to grow her business by promoting it as a full-service advertising agency. Normally this would involve partnering with or even employing an art director, taking on designers, and moving to a larger office. By supplying all partners with high-speed Internet connections, all files are exchanged electronically, and creative brainstorming sessions are conducted over a videoconferencing link.

Between them they create an attractive Web site that compares favorably with those of some of the world's biggest agencies. Prospective clients searching the Web like the creative work featured on the site and commission some lucrative campaigns. Using Internet technology, the copywriter makes contact with the publishers for help with campaign planning. She can check their Web sites for advertising rates and copy deadlines and---when dealing with the more advanced media groups---even book space.

The agency's clients make increasing use of e-mail and videoconferencing for routine briefings and become comfortable using electronic files to review ideas and approve text. Eventually, the agency grows sufficiently to warrant a move to larger offices and the employment of full-time staff. But the growth was driven by the strategy of using e-commerce to build the business.

The elements of e-commerce:
If you have computers installed in your business, you already are familiar with many of the basic elements of an e-commerce solution: computer hardware, storage and backup systems, applications software, printers, etc. A critical issue is whether the key applications on which you run your business are "Internet-enabled"---that is, are they optimized for conducting e-commerce over the Internet? Most of the leading providers of business-productivity software---used for functions such as supply-chain management, order-entry, billing, inventory management, have Internet-enabled solutions available.

An essential part of an Internet e-commerce system is connectivity to the Internet. In e-commerce, your Internet connection is your company's lifeline to the world. As such, it must be fast, efficient and reliable. Businesses that use an ordinary modem to reach the Internet put an essential business connection at risk of slow, unreliable service. The choice of networking equipment and Internet service provider are among the most important you will make in regards to e-commerce.

If you are going to seriously engage in e-commerce, you probably will need a high-speed, "always-on" connection to the Internet. ("Always-on" means the connection to the Internet is available instantly and constantly, as opposed to a "dial-up" connection, in which the connection is established and terminated for each transaction.) Telecommunications service-providers offer a variety of high-speed options, including ones that go by technical terms such as T1, digital subscriber line (DSL) and cable. These services transfer information as fast a 1.5 million bits per second, compared to a regular dial-up modem, whose top rate is around 53,000 bits per second. Some small- and medium-sized businesses may use a type of telephone service called integrated services digital network (ISDN), which is not always-on, but is about twice as fast as a regular modem.

Getting started:
If you run a small or medium-sized business, you want to know what it takes to successfully implement e-commerce. The good news is that plenty of help is available, whether you want to do it with your own staff, or hire outside experts. There are good arguments for either approach, although small- and medium-sized businesses need to be especially careful about the resources necessary to keep e-commerce systems up-to-date in the face of rapidly evolving Internet technology.

A recent development designed to help small and medium-sized businesses is the emergence of "application hosting" services. With an application-hosting service, a third party operates all the computer and communications equipment. Instead of your company buying and running its own computer systems and software, you "rent" the applications from the third party. For example, instead of buying and maintaining fifty copies of a word-processing program so each worker can have a copy on his or her PC, you contract with an application service provider to use the word-processing program for a set fee per user. The service provider handles all the system maintenance, upgrades, troubleshooting. E-commerce is one of the applications offered by application service providers, and can be an easy way for a small or medium-sized business to quickly and easily get into e-commerce.

The products incorporate the latest technology but also have features that make installation quick and easy, even for customers who are not networking professionals.

The Internet is becoming deeply rooted into the economy, fundamentally altering the way companies buy, sell, communicate, and collaborate. While small growing businesses once had to wait until new technologies became practical or affordable, today's Internet provides enormous opportunities for driving down costs, reaching new customers, increasing productivity, and getting new products and services to market faster.

Capitalizing on technology means more than networking a few PCs or surfing the Web on a standalone Internet account. To use technology to your competitive advantage, you need to build a strong foundation today and be able to accommodate growth and change in today's fast paced environment.

The Internet has been adopted faster than previous technological breakthroughs such as radio, TV, and PCs, reaching 50 million users in about five years. Today, it has nearly universal reach in businesses. In fact, working with customers and business partners via the Internet will soon become a necessity, not just an option.

The barriers to adopting Internet-based business practices are very low. At its most basic, gaining Internet access can be as easy as connecting a modem-equipped PC to a phone line and dialing a service provider. Small and growing businesses can begin integrating the Internet into their strategies today.

To an even greater extent than previous technologies, the Internet removes the obstacles of size, time, and distance. An Internet presence gives any business regardless of size a 24x7 channel to customers, suppliers, and partners anywhere in the world. Where you are and how many employees or locations you have matters less than how effectively you can connect with customers, meet their needs, and differentiate yourself through exceptional service.

Although the Internet can make businesses more efficient and profitable, it also increases the penalties for falling behind. 

Your technology plan is a strategic tool and should be tightly integrated with your overall business plan. Wherever appropriate, it should provide a technology- or Internet-based solution for key business challenges. These challenges include reducing costs, finding and serving new markets, streamlining processes, improving employee collaboration, increasing productivity without having to add new employees in a tight labor market, and improving customer service.

The ideal technology plan establishes a solid foundation for growing your business in the Internet economy, through electronic communication, collaboration, commerce, and business processes. Often, this requires taking a completely new approach to business activities such as sales, marketing, procurement, human resources, design, and distribution.

Competition is growing:
The Internet is allowing new businesses to launch virtually overnight and has established businesses to jump into new markets quickly.

Cost pressures are rising:
New e-commerce trading exchanges and e-marketplaces are making the procurement process more efficient, which can save time and lower costs. Companies leveraging these tools to become more agile and lower costs are in effect presenting an ultimatum to their competitors: adapt, shrink your profit margins, or lose your market share.

Businesses are collaborating more closely with partners--In the new economy, businesses need to be agile and move quickly to seize opportunities. This often means going outside the internal organization to partner with suppliers and other companies for expertise outside your own core competency. Technology planning and the Internet enable companies to form seamless links to outside organizations.

Customer expectations are rising:
Customers can shop, buy, bank, watch the news, check the weather, and review stock prices and sports scores any time, day or night, on demand. Is your business equipped to meet this new standard for constant availability and instant response?

Productivity is soaring:
Throughout the past decade, productivity improvements have accelerated, an effect economists attribute largely to technological advances. To keep pace, your company must deploy technology intelligently to streamline processes and enable employees to communicate and collaborate more effectively.

The Elements of a Technology Plan:
Every technology plan is unique, but most share several critical elements. You can build or design your technology plan on your own, but because technology changes so quickly and is constantly offering new opportunities to your business, you should strongly consider involving a value added reseller (VAR) or systems integrator (SI) in the process.

Here is a general, step-by-step guide to creating a technology plan for your growing business:

How do employees communicate with customers and each other? List all the options they have and how often they use each one: phone calls, faxes, visits to any branch offices, daily or weekly e-mail messages.

How do employees collaborate? How do employees access their own work or joint projects when they're away from the central location? How do employees at remote locations collaborate with colleagues?

• Find and win new customers? Outline your sales and marketing processes.

• Add new products and services to your company's offerings.

• Let customers know what is available.

• Manage inventory.

• Distribute products.

• Communicate policies and news to customers and employees.

• Pay invoices and collect receivables.

Financial and Administrative Management--automate administrative functions improve efficiency and reduce overhead

B2B E-Commerce--sell products/services, and improve customer and partner relationships

Your business needs determine which technologies to deploy, including DSL, T-1 lines, routers, switches, wireless networking, and so on. At this stage, it can be very helpful to involve a VAR. New technologies emerge constantly: a professional adviser can help you identify the most practical, cost-effective, and future-proof and scalable options for satisfying your business needs.

Access--who needs to be connected to your network and the Internet?

Applications--what software might you deploy to automate fundamental business processes (sales, marketing, customer service, shipping, accounting, design, human resources)

Performance and capacity--how fast should your central or "backbone" connections be to avoid slow response times at peak times (for example, at 9 a.m., when most employees arrive, check e-mail, and download the day's work over the network)? How will remote employees use the network, and as a result, which wide area networking (WAN) service (dialup, DSL, cable modem, T-1, and so on) should you choose?

Scalability--your needs are certain to change. Devise your technology plan with hardware, software, and services that you can migrate easily to higher capacity and performance.

Manageability--how will you manage your network going forward? Designing a network and getting it in running order is only the beginning. You need to devote resources--people, money and time--to the ongoing task of monitoring your network and Internet usage, configuring new systems, addressing problems as they arise, and continuously improving your technology infrastructure to continuously exploit emerging opportunities. Also increasingly important is control over traffic "policies," which will open the door to powerful new applications such as moving voice, fax, and video traffic over your network. If you outsource network management or applications, your Internet service provider (ISP) or application service provider (ASP) will help manage or identify these tasks.

Security--protecting your data is imperative, requiring both automated steps (such as passwords, firewalls, antivirus software) and physical security policies (such as controlled access to PCs, restrictions against downloading e-mail attachments from unknown sources).

Prepare for the future:
Choosing scalable hardware and software that can seamlessly add users or support new technologies and applications is only part of your long-term planning requirement. Your technology plan should encompass whatever your future business plans include, such as new locations, additional employees, new customers, new product and service offerings, or a completely new business model that relies heavily on network- or Internet-based processes.

Develop a budget:
In addition to hardware and software, budget for ongoing administration and maintenance of the network plus recurring expenses such as telecommunications charges. Typically, the initial cost of buying and installing networking equipment and software is about a third of annual technology budgets.

Design your initial network implementation or upgrade:
Working with your reseller or network consultant, design your initial network infrastructure, considering the following components:

Platform--the operating system that will serve as a basis for communications and applications (such as Microsoft Windows 2000, UNIX, and Linux)

Applications--office software, browsers, HR, accounting packages, and so on

Services--including Internet access (through your ISP) and wide area network (WAN) services (T-1, Frame Relay, DSL, cable modem)

Management and Security--including software for controlling access and protecting data as well as policies for responsible, secure network usage

Create a timeline for implementation:
Getting your network up and running can take anywhere from several weeks to several months, while upgrades can be completed more quickly.

Pilot your solution:
Before you deploy the network or upgrade across your business, it's essential to create a test environment or roll out the solution to a limited number of users for feedback.

Make adjustments based on pilot input:
This is your chance to make adjustments before they become large-scale issues for all of your employees, customers, suppliers, and partners.

Deploy the technology to all users:
Go live! A key part of this step is to train users on the new systems. Training is an essential measure for ensuring broad adoption of the technology--and one too often neglected.

Provide ongoing maintenance and support:
This ensures reliable operation and consistent availability of your strategic technology tools.

Monitor performance regularly:
Technology is a dynamic resource for your business. Making the most of your investment requires constant monitoring of performance as well as employee and customer needs. Remember how your technology plan began--with an evaluation of the business and its needs. Keep cycling back to your business plan and its objectives and make sure this still maps back to your technology strategy.

To protect the internal network from Internet-borne attacks, all transmission pass through the corporate firewall.
Your business plan is the foundation for your technology plan. As outlined in the step-by-step process described earlier in this guide, technology planning starts with knowing where you want your business to go.

You can benefit from our expertise through your choice of an ISP. A select number of ISPs qualify for  network designation, which marks companies who are committed to the highest standards of performance, reliability, and customer service and security. You can leverage relationships with hundreds of companies that install and support computer-networking solutions. These consultants, retailers, system integrators (SIs) and VARs  solutions and committed to delivering high levels of customer satisfaction.


ASP--Application service provider. A company that gives you access to a software package over the Internet, usually for a monthly fee. The ASP upgrades the software as needed and maintains the infrastructure to support it.

Bandwidth--The maximum amount of data that a network cable can carry, measured in bits per second (bps).

Browser--A software application used to search information posted on the Web; Netscape and Microsoft Internet Explorer are the most popular packages.

Cable modem--Cable modems use coaxial cable, the same used to deliver cable TV to homes and businesses, to provide Internet access at download speeds of 1-2 Mbps. Upload speeds usually are limited to 128 kbps.

DSL--Digital subscriber line. A high-speed access service that provides an "always-on" connection to the Internet at speeds 5 or more times faster than a 56K modem, using ordinary copper phone lines.

Home page--The main page of a Web site and the first screen that a visitor sees displayed when connecting to that site.

Host--The computer server or company that provides a platform, or a "home," for an application.


HTML--Hypertext Markup Language. The authoring language of the Internet; used to create Web pages.

Hyperlinks--Embedded "hot spots" in Web pages that allow users to jump from one document to another document anywhere on the Internet.

Internet--The global network of computers, routers, and cable connections that enables the world's computers to connect to each other.

ISDN--Integrated Services Digital Network. A telecommunications standard for sending data signals, digitized voice, and video over the existing public switched telephone network.

ISP--Internet Service Provider. A company that offers Web access and/or other services such as Web site design, hosting and security.

Kbps--Kilobits (thousand bits) per second, a unit of measurement for network bandwidth, or data-carrying capacity.

LAN--Local area network.
Workstations and computers that are connected in a specific work area in the same
general location.

Router--A device that connects two networks.

Server--A network node that provides services to client PCs, for example, file access, print spooling, or remote execution.

T-1--A high-speed network access line (1.54 megabits per second) used by many companies for Internet connections.

URL --Uniform Resource Locator. The standard way to write the address of a specific site or piece of information on the World Wide Web; for example, http://www.cisco.com.

WAN--Wide-area network. A geographically dispersed network that connects two or more LANs.

World Wide Web--The vast network of information and resources that is most widely used to communicate and trade via the Internet.