The European e-business landscape has altered dramatically in the last few months. The fizz and marketing-led hype of the early part of the year has faded. The number of announcements of new ventures and start-ups has dropped dramatically while the focus has shifted to creating real value. In the coming months we will see more ‘Old Economy’ players integrating e-business into their core business and leveraging their existing assets in the New Economy. The time for buzzwords is over; the demands for hard business decisions are returning.

Initial rush
The early part of 2000 was characterised by a rush to announce e-business ventures. Whether the publicity concerned new dot.com start-ups, e-business operations of existing businesses or simply new partnerships, it was deemed important to announce some sort of e-business venture. Announcements counted far more than actual strategic value or actual business benefits.

Early tests - ‘I want e-business’
Many of the announcements in this phase were about pilot projects. Existing businesses often set up a separate e-business venture to test the waters and learn about it without involving (risking) the organisation’s core business. There was little thought about integrating e-business with existing business. This phase can be characterised by the demand from senior management to have an e-business just for the sake of having one. Moreover, merely adding an ‘e’ to anything had a positive impact on the share price of any organisation.

Looking for the value
Following the stock market tumbles of the spring, analysts and business leaders began looking for real value. e-business became more about leveraging existing assets and creating sound business cases – and less about marketing. Having an e-business element on its own is not enough; the leaders of tomorrow are the companies that are already looking at how e-business can combine with their existing strengths to create new value. The new demand from the boardroom will be to use e-business to support the core business and add value to it.

Over the next few months we will see the e-business divisions, which were set up in isolation, being brought back into the main organisation. The growing realisation is that e-business must permeate the whole organisation.

Evidence from SAP
SAP has seen a major shift in the demands of customers and prospects. The conversations have now moved to a much higher level, where the discussion centres around leveraging existing assets, what a company’s core competency means in the e-marketplace and how e-business can be used to add value.

Customers such as Princes Group are already looking at their core competencies and seeing how they map onto the demands of the New Economy. DigMedia is an example of a company that has taken e-business to heart as the basis for an entirely new business plan.

SAP is running workshops with a variety of customers to investigate these issues and also to help instil e-business into the culture of the organisation so that everyone benefits.

Europe’s attitude to e-business is changing - not only through the much-vaunted failure of dot.coms and cash crises, but also though a growing maturity.

The next few months will see larger bricks and mortar companies entering the market with e-enabled processes that capitalise on their ‘Old Economy’ assets and use the best of the New Economy.
The market will also see fewer, stronger, dot.com start-up businesses that have real business differentiation.
Reality has come back to the market. Businesses have known for some time that success in the New Economy cannot be bought with marketing dollars and buzzwords. They are well under way with investigations into how e-business can be integrated to add new value.