E-Commerce and Empowerment

The purpose of this paper is to summarize the article, "E-Commerce Equals Empowerment," by Peter S. Cohan, published in May 2002, in Financial Executive magazine. With CFOs considering implementing e-commerce strategies as part of their own businesses as his primary audience, Cohan wrote the article to show that, although e-commerce and dot-coms are linked or synonymous in the minds of many businesspeople and the public, they are in fact very different, and have had different outcomes in their respective histories on the Internet. Early in this century, the "dot-com" meltdown led to losses of billions of dollars and millions of jobs; at the time, the future and the viability of the Internet was doubtful for many executives because of the 'bad rap' of Internet companies from this implosion. Actually, Cohan points out, the dot-coms and basic e-commerce are very different, and because of this difference, e-commerce continues to thrive despite the end of so many dot-coms. E-commerce is a strategic business enabler, and companies continue to pursue web-based operations for their many operational benefits, and these must become imperatives, even if their cost must be covered through cost-cutting or price increases.

At its most basic, "electronic commerce" or "e-commerce" refers to electronic shopping, doing business online or buying products and services through Web storefronts. The terms have evolved to include to all aspects of business and market processe

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and use the mistakes and successes of other companies to derive effective, efficient Web strategies that will invigorate their own business growth. Cohen provides salient questions CFOs should ask as they review various strategies that will ensure that they choose options that will best serve their own companies. Profitability, cutting edge software, examples and general principles are evaluated in text and case histories. Experience suggests that e-commerce initiatives provide four payoffs. First, electronic procurement provides significant cost savings through streamlined overhead and increased options, the ability to target preferred suppliers, streamlining the administrative process and integrating vendor payment with the company's accounting. Second, firms achieve savings through efficient processing of salary payment, benefits selection and maintenance, and expense reimbursement - this efficiency has the added benefit of increasing employee satisfaction. Third, customers can serve themselves online that allows them more satisfaction through more options on a 24/7 basis. Finally, fourth, online ordering provides cost and time savings with increased order filling efficiency on the both customer and company sides thro

Category: Business - E