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Thursday, September 19, 2019

e-Business or out of Business
by Mark J. Barrenechea. New York: McGraw-Hill, 2001.

"Before the Internet, the level of competition in business was such that few CEOs would have wished it higher. But the advent of the Internet raises the bar another notch. Some pre-Internet companies that have survived into the Internet era now confront competitors that sprung into existence in order to exploit the new medium; other pre-Internet companies have established a Web presence to realize the savings it promises or to avoid losing business to traditional competitors and now must grapple with the challenge of reconciling the new channel with their traditional modes of business." (page xvii)


"…the Internet will come to be recognized (if it is not already) as a revolution in the history of technology and as the culmination of the history of business…future advances in technology and in business will enhance and reinforce - not replace or supercede - the Internet." (page 2)


" No one can foresee the full impact of the Internet on the markets that it is creating. But, to the extent that competition in these markets is fair and free, one consequence to be expected is that seller's margins will be driven relentlessly down."

"This trend will ultimately benefit consumers - unless, of course, so many companies are actually forced out of business that the survivors can manipulate the markets to their own advantage." (page 7)


"The Internet: Key Advantages - Cost-Effectivity"

"The Internet is astonishingly cost-effective, for four main reasons."

"First, moving paperwork online speeds communications and reduces material and administrative expenses."

"Second, transaction costs plummet. Too many companies have only vague ideas as to how much it costs them to handle an order. Ray Lane, former president of Oracle Corporation, estimated that processing an order, pre-Internet, cost $100 on average, but only $10 when using the Internet - and that the average cost of processing a payment declines in proportion, from about $10 to less than $1. Lane quoted figures from Xerox Corporate Strategic Services to the effect that purchase-order processing at Xerox has fallen, on average, from $150 to $25, after implementation of Oracle Internet Procurement…"

"Third, capital expenses and expenses for business processes and human resources are sharply reduced."

"Fourth, improved availability of more comprehensive information enables it to be used more effectively (pages 54-56)


"Permanence - The Internet is here to stay. Not only has it been around for thirty years, it has been accumulating more popularity with every year, and it is now far too massive to be dislodged. There will be an Internet2, and a Next Generation Internet, but neither is intended as a separate network. To the extent that these come to 'replace' the Internet, they will do as the skin is said to - once every seven years, cell by cell, mostly imperceptibly, and with backward compatibility. The result will be that the network will extend its accessibility to a greater variety of devices, and that it will grow faster, more reliable, and (even) less expensive." (page 58)


"The influence of the Web will transform all business processes, effecting pervasive reconfigurations of resource pools of labor and skills in many industries." (page 59)