Do Business Well

The Internet ties all information systems together regardless of their physical location. In effect, it has enabled a company’s internal computer network, its local area network (LAN), to extend its reach on a global scale. Organizations are therefore no longer constrained by the information systems they can build or buy and install on their own physical premises. Every computer is connected to every other computer on the Internet. This simple truth changes everything. What used to be “internal computing resources” at a company have now become external resources that the engaged organization makes available to all its constituents. The reality of the Internet is that everybody is connected to you and you are connected to everyone else: your customers, your vendors, your suppliers—even your competitors. It doesn’t matter where a particular network function is physically located or who operates it, just as long as it’s secure and reliable and provides the right functionality to solve a particular problem.

In the old days of client-server computing, the classic model for adding new functionality to your corporate network was to purchase server hardware and software—complex, heavily specialized systems which the IT department would have to install, operate, upgrade, and maintain. If, for instance, your marketing people requested new functionality that would allow them to access information in the central customer database (assuming that the organization had one), you’d probably have to buy and install new servers and customize your software. You’d also need to install specialized client software on the desktop computers you were planning to use to access the information. And, of course, all this software would need to be maintained and frequently upgraded. Maintaining such seemingly simple solutions could be incredibly expensive.

Today, the engaged organization looks to the network for solutions to its information technology needs. Accounting, sales, marketing, and many other services are available online, hosted and maintained by various service providers. As a result, adding new functionality to a company’s network is becoming a function of selecting the right service provider. The benefit: A department such as marketing no longer needs to wait for IT to install or build its own technology solution. Instead, it can get outside support.

IT’s role in an engaged organization is still to develop and manage the mission-critical core components of an organization’s technology infrastructure, but it also includes an equally important yet very different set of responsibilities: IT must evaluate, help select, and support a variety of virtual resources, all of which are hosted and operated by outside service providers on the network. Much of the work in supporting these virtual resources involves coordinating data flow and ensuring data security and consistency across all network services.

Imagine that you want to use the 350,000 email addresses in your customer database to develop an email marketing program. The traditional company would approach this in terms of software and servers. It would ask what software and how many servers were needed to deliver 350,000 emails to its customers. The engaged company would ask very different questions: Which service provider on the network can accept an automated data feed from our customer database? Can the service provider design, deliver, and track—on an ongoing basis—a personalized email campaign and monitor the complete history of our interactions with every individual customer? And finally, can we get “phase one” built and launched in two weeks?

We need to take business back to the way things operated a hundred years ago, to a time when several new technologies—the railroad, the automobile, and the telephone— disrupted traditional ways of doing business. They also enabled the growth of retailing as we know it today. Today, the Internet is having a major impact on the way companies conduct their business and structure their organizations. The disruption caused by Internet technologies is enabling us to reintroduce some of the benefits of the personal relationships we once had with neighborhood storekeepers.

How customer marketing and communication impacts your organization is something you’ll have to manage by restructuring your traditional organizational functions and by leveraging the new infrastructure and new technologies. Although reorganizing, reorienting, and refocusing an organization almost always involves some pain, you really don’t have a choice. Online customers have learned to expect the companies they do business with to recognize and integrate their actions across all systems, divisions, departments, and functional groups. When customers tell you something, they expect you to listen and respond promptly. They also expect you to remember what they’ve told you in the past and to take that into consideration the next time they interact with you. If you don’t engage with them on these terms they won’t engage with you. If you do, they’ll give you exactly what you want: their repeat business and loyalty.

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