RULE 1: GET ON WITH IT
With tens of billions of dollars in market capitalisation, the internet-based economy has, over the past five years, already triggered the biggest legal creation of new wealth in history, and will make up nearly half a trillion dollars in business worldwide by 2002.
Today, tomorrow, here, there and everywhere. This grand transition to digitally networked business is set to become pervasive in Western countries within the next five years, and will render meaningless the much-ballyhooed distinction between the New Economy and the old one. Indeed, the New Economy is being born like a homunculus from within the old, in the sense that it pertains not, as many imagine, exclusively to the glamorous 'information industries' of computers and telecommunications per se, but to the digital information processes that already make possible the inner workings of every manner of enterprise, from the humblest family-run corner grocery, with its electronic cash register and incoming telephone orders, to the sleekest, most up-to-date multinational, with its fully databased payroll and enterprise-resource-planning system.
Growing at the speed of information. One might almost say that the New Economy springs into existence wherever the in-house network jumps the corporation's firewall and begins to quicken and deepen information flows between that corporation and the outside world. This is something which is happening everywhere right now. So if your company has been napping on the sidelines, or chipping away at a dull little web site as its corporate tombstone, while waiting to see whether this New Economy thing was really going to take off ... then, good morning! This is your wake-up call.
Prepare for the future; it's already begun. There are a number of things that your enterprise should be exploring right now: redefining its industry and identifying new competitors from related categories. Focusing on its essential value-add, while letting everything else go to outsourcing by carefully selected partners. Planning for process scale, not physical scale. Looking past the mass market to micro-segmented strategies. Upgrading your conception of customer service, and assessing success in terms of each loyal customer's lifetime value rather than his or her annual bill. Setting up direct sales channels and extranets. Leveraging the new class of niche intermediaries online. Using high tech to develop 'high touch' for your best customers. Shifting from sales of products to sales of services based on those products. Making, pricing and delivering what you create in 'internet time'. Fully integrating the value chain from customer interface to back-end. Leveraging virtuous cycles for products whose value grows geometrically with adoption. Preparing for networked globalisation. And embracing for the era of sustainable disequilibrium.
One day this will all make sense. If your company isn't already well down the path on more than half of these topics - if, truthfully, you don't have much of a clue as to what I'm talking about here - then this new series, Survival Rules for the New Economy, is addressed to you. Please return here next month, so that we can both get on with it.