Sun, 13 Aug 2000

The dummy's guide to e-business

So, you've heard about this thing they call the Internet, and you've found out that billions of dollars worth of business is transacted through this electronic medium each year. You want your share of the cyber pie, but don't know how to go about it. Read on.

OK, despite the hype of the Internet and dot-coms over the past few years, recently we've seen what some analysts are calling a downturn in e-tailing, the business of selling on the Web. The bubble everyone had been waiting to burst seemingly has been doing just that over the past months., the online bookselling giant even laid off a couple hundred of its staff last month. Other, smaller and more specialized dot-coms have bit the bullet and closed their electronic doors as fast as they sprung open.

But fear not. E-business, like any other form of trading, is here to stay (Internet ad revenues doubled to almost US$2 billion in the first quarter this year), and as e-business solutions specialist at IBM Indonesia Ari Pratiwi says, the most important aspect of e-business is having a sound business sense. "IBM looks after the technical side," she said, cautioning, however, that the main difficulty with online trading was that the majority of banks in this country were not yet ready to make credit card authorizations over the Internet. "Currently, most online transactions in Indonesia are paid cash on delivery," adding it was possible that by next year, more banks would be in a position to facilitate card payments.

After enduring a slide in PC sales over the past couple of years and losses in billions of dollars, (IBM chairman Louis V. Gerstner has said the age of the home computer is over -- last week Reuters reported that in Japan, for the first time sales of laptops had overtaken sales of PCs), using the same vision and initiative that made it the market leader, before Microsoft entered the game, is turning toward e-business with the mighty roar of massively powerful servers, software and services.

As an e-business solutions provider, Big Blue offers to lead you through what many see as a confusing wired world.

So, now that you know there are firms and corporations out there trading chips for bucks, telling you to sit back and let them do the work while they get you into e-business, I hear you ask what all this is going to cost.

Akin to the world of bespoke tailoring, in that no two people are of the same dimensions and have different requirements, setting you up in e-business depends on the needs and size of a company. What do you want? To e-tail, provide customer service or just have your firm on the Web? And how much are you willing to pay?

Back to Ari at IBM. Though reluctant to say there is an average cost, she did relate a recent example. A trading company wished to get into e-business, and wanted 1,000 hits (number of people viewing the site) each day. IBM proposed a UNIX-based server, together with what they call "outsourcing", where IBM owns and maintains the equipment. With the server worth US$600,000, the client is paying $1.2 million over three years for the service. And if the number of hits increase, IBM says, that cost could go up.

Those of you who are netsavvy enough to know that the World Wide Web contains more information about more topics than any set of encyclopedias ever could, would do well to check out If e-business is your goal, then this nifty U.S.-based site has a useful responder as a starting point. Simply fill out an online form (questions range from expected budget to your e-business strategy -- if you have one) and, as the page says, "a genuine e-business consultant can get back to you by e-mail or phone ... to connect you with the resources you'll need to keep your online move in line with your main business objectives." The site may not offer all that you require locally, but it can give an you an idea and point you in the direction of e-profits.

IBM e-business country manager for Indonesia Ivandeva Irwantoro says payment gateways are the key to the development of the Internet in this country: "It's a chicken and egg situation, because the Net cannot develop without it." Saying there currently are ways for customers to pay with plastic, "it is not clear as it requires infrastructure".

Companies that want to get into e-business come in two types, says Ivandeva: Brick-and-mortar (established firms) and pure play (starting out as a purely e-business entity) companies.

Web services director at Agrakom, an e-business enabler and the holding company of online news provider, Nukman Luthfia says there are many traps littering the road to the successful use of the Internet in everyday business practices and that only a small number slip through the traps. As Indonesia's oldest professional Internet services company, Agrakom provides the following solutions: E-business strategy, e-business development and implementation and specialized services consisting of hosting and maintenance, as well as cybermarketing.

Agrakom, according to Nukam, is currently developing two e- tailing projects -- one with a shopping mall developer, the other with a multinational corporation. And there are other projects on the horizon, he says.

Nukman maintains the average cost of getting into e-business is anywhere from $500,000 to $1 million, pointing out that it varies depending on the company in question.

But Jakarta-based e-business enabler Jatis says a simple website to sell products is much less expensive than a fully integrated site. Jatis advises "now that the dot-com bubble has burst, the key thing to remember is that like any other business (sector), one must weigh the costs against the benefits of the investment".

The company says it currently has a secure payment gateway "up and running at five of the major banks" and it sees this trend continuing.

The main points to watch out for are to focus on what you can do -- subject matter expertise is the key; partner with the right e-business enabler -- one with a proven track record for delivery; and make sure you think through the end-to-end e- business model and that it makes sense, the company recommends.

Despite, therefore, the difficulties some see in e-business in Indonesia, there are solid companies here offering practical solutions -- and with both Bank Internasional Indonesia and Bank Bali providing payment gateways (Bank Central Asia and Bank Mega are due to come onstream later in the year), the future seems cyber-bright.