E-Commerce: The HR Dimension

This article was published in the SAPPHIRE newsletter in 2000.  

With at least three dotcom companies starting up every week and advertising on the web heating up, more and more companies are getting on to the e-commerce bandwagon. Companies, who traditionally followed the physical chain, are trying to reengineer their business models to respond to the change.

E-commerce is not just for the 'big' business houses anymore. A small business operator with a few employees can cash in the opportunities to increase sales via the Internet. Competitors are getting online; customers are asking if they can buy from the web site. Accepting and managing Internet orders and inquiries without implementing new contact and accounting systems is the new business drive.

Then, there are the members of “Generation Y,” also known as the “ Millennium Generation” or the “Millenniums” who are making their presence known as techno-savvy consumers. Studies predict that reaching them will provide the competitive edge to businesses. Since their outlook - "A decision for today, not for a lifetime,” - influences their buying choices, the new mindset is that of embracing change and flexibility. As a generation brought up with computers and instant communications, they are comfortable in careers that call for an entrepreneurial spirit and make use of interactive technology.

Increasingly, more and more products are being sold and transacted on the Net. Almost every industry, whether it is a bank, a FMCG or a pharmaceutical is trying to target the next generation which spend most of its time on the virtual medium.

On the one hand, online transactions have resulted in creating market opportunities for web designers and web advertisers. On the other had, it is also to be noted that as a result, people who would have otherwise done the parallel tasks in the physical chain like salesmen, medical representatives, bank tellers have been fired.

For years, technology in terms of automation has effected the production domain; but nothing like the technology of e-commerce, which has affected all the domains - marketing, sales and finance.  Concepts such as JIT (Just in time) in production have expanded to the field of sales and finance, where people are hired to deliver for a few hours or days and then fired. Employment would slowly move to contract, then to casual.

Electronic assets create value that can be reharvested by companies through potentially infinite number of transactions. To make or break them is hundred times easier than hiring and firing human assets. Hence, companies are moving all value-adding activities from the marketplace to the market space. They gather, organize, select, synthesize and distribute information in the market space while managing raw materials and manufacturing goods in the marketplace.

Companies have got smarter by realizing that as Net access becomes widespread, competitive dynamics will change.  Hence, they have changed their thought process from the supply side to the demand side. It has been clear to them that they just cannot hire an intermediary who would take care of their business on the Web. The physical and the virtual chain need to work in synchronization to attain effectiveness. Hence, they are changing their physical systems, processes and assets.

So, will e-commerce take over human assets? - is a question to ponder upon. Those assets, which will lose out on information, will ultimately perish. There is no doubt that the knowledge in the human mind would rule the world, but less and less bodies, hands and legs would be seen around. Will that be a gift or a nightmare of e-commerce that the world is heading for?