UK: KPMG Consulting's Seven Deadly Sins of e Commerce

Last Updated: 22 August 2000

Consulting 21 August 2000

Companies Must Not Be Tempted Into The Pitfalls Of The New Economy

Many companies are committing ‘e-business sins’ that threaten to limit the effectiveness of their online operations, according to KPMG Consulting. Paul Baker, Head Partner for e-business at KPMG Consulting, has developed a list of the seven deadly sins of the internet, claiming that the path to ‘e-virtue’ lies in avoiding these deadly sins:

  • Sloth: The key to e-business is innovation and speed – being ahead of competitors in launching a ground-breaking service or way of delivering that service. However, KPMG Consulting's research shows that, in Europe, companies are still clinging to the traditional rules of business, making them slower at decision-making and more risk-averse than their US counterparts. Too many businesses may be losing competitive advantage because their planning processes are too lengthy. The e-business winners will be those companies with not just vision, but the courage to act upon it!
  • Envy: Of course, sophisticated web-based products and service offerings can be enormously successful and beneficial. However, there is no point in simply copying web-initiatives from other companies. Before investing in any e-business initiative, companies must think very carefully about exactly what they are going to implement, who it will appeal to and what it will achieve.
  • Greed: The internet offers exciting opportunities for companies to collaborate and develop profitable e-ventures with other key industry players. However, companies are often too short-sighted to recognise the benefits of this type of collaborative approach, feeling that the best way to gain market share is to go it alone. The successful players in the new economy will consider collaborative ventures as part of their strategy to satisfy customers.
  • Pride: Many companies are simply too proud to share data outside the organisation. Some feel uncomfortable about sharing information with suppliers, for example allowing them remote access to selective stock data. This access would enable suppliers to provide a better service, as it would automate re-stocking. Other companies are so proud of their own facilities and research that they fail to make sufficient use of external knowledge, such as market research on the Net, to inform their decisions. Given that businesses have been trying to convince employees of the benefits of knowledge sharing, in future, they will have to lead by example.
  • Gluttony: Consumers can't seem to get enough of online food and drink suppliers at the moment, but before a company decides to pander to this gluttony, there are certain things that must be considered. Delivering fresh goods – not just groceries but all other perishables, such as flowers - brings a whole host of unique problems. For example, refrigerated vans are needed, as is an impeccably organised supply chain. Moreover, there is the issue of the customer being available in person to take delivery of the goods, which does not apply for most other products bought over the web. Companies must be aware of these special needs before embarking on any scheme to deliver perishable goods.
  • Lust: The majority of employees will admit to browsing the internet, but with online porn sites clocking up impressive hits during working hours, many individuals are doing more than buying books over the Net! Obviously, surfing the internet for these sort of non-work related sites can cause offence, and with this in mind, companies must develop clear policies outlining what constitutes permissible personal browsing. This not only discourages employees visiting from offensive sites, but also limits the time wasted overall in personal browsing.
  • Wrath: The ubiquitous e-mail has caused a revolution in itself, but the ease of this method of communication should not detract from the nature of the message itself. As messages can be typed and sent in the blink of an eye, far too many are sent without sufficient thought or even in anger, causing irreparable damage to important customer and supplier relationships. Companies need to have e-mail codes of practice that point out to employees the importance of treating e-mail as a formal business letter, and provide guidelines for drafting such messages.

Copyright © KPMG International 2000. All rights reserved.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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