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Web Makeover
Nine things an old economy firm must know
By MARIA CHENG
The 1000 Biggest Companies


The convergence of old managers and the new economy is forcing the traditional business model to change — fast. The problem: Becoming cyber-savvy requires more than just an executive decision. Without the right mindset, the technological know-how and a genuine willingness to adapt, a lot of Asian companies could get into trouble. Nine points to keep in mind:

E-Business Is a State of Mind. Be ready for the dreaded C-word: commitment. "Companies have to be completely prepared to make the changes that adapting to the Internet economy demands," says Joe Sweeney, research director for Gartner Group in Hong Kong. Merely launching a website won't do. Unless companies are ready to fundamentally rethink their business, cyberspace will be little more than a cyber void.

Timing Is Everything.
Never underestimate the importance of speed in the dotcom world. "In the new economy, planning beyond 24 months is a really bad idea," says Sweeney. While a comprehensive business strategy is essential, companies must also have the flexibility to adapt to the faster pace of transactions. "It's reasonable to assume that the business environment will change enough every few months to require some minor — or major — readjustments," he says. "If companies can't reconfigure their strategies fast enough, they will lose out."

Talking Will No Longer Cut It. Traditional businesses revolve around meetings and memos, a formula for disaster in e-business. "In most cases, what tends to happen is that e-initiatives get stalled among managers who discuss the problems," Sweeney says. What is needed is a CEO or an information-technology strategist with a vision of how the business needs to change and the practical steps to get it done.

Outsiders Are the New Insiders. "E-businesses need both technological and management expertise," says David Michael, vice president of the Boston Consulting Group. Even the best-run companies might have to look outside for senior executives with the requisite tech background. The arrival of outsiders could foster a more lateral leadership structure that veers away from the traditional Asian hierarchy.

E-Workers Are a Different Breed. Asia's small pool of talented e-commerce workers means that companies looking for an edge will have to pay for it. The incentive route of base salary plus performance bonuses may no longer be enough, Companies should also be prepared for a new working environment. "They can no longer presume that someone's looking for a lifetime job," says Michael. Retirement benefits may have to be replaced by stock options or other short-term desirables.

Too Much Money Can Be a Distraction. E-businesses are as prone to misspend as the next company. They just have more expensive options — the snazzy new servers, the latest e-business software, the tanking dotcom competitor asking to be acquired. "Not everyone knows how to spend on ventures that have no guaranteed returns," says Hong Kong dotcom entrepreneur Larry Campbell. So companies should exercise restraint. "A lot of money can be dangerous for a company without a long-term specific plan," warns William Fung, group managing director Li & Fung, a leading Hong Kong trading company often praised for its e-business strategy. "If it raises just enough seed capital to get to the next stage, it will probably spend more time consolidating the business plan and still be strong enough to continue."

Be Prepared — for Anything. If Yahoo calls you with a proposed deal, who in your organization answers the phone call? "Every company should know how to answer this question," says Michael. "E-commerce opportunities do not wait for corporate calendars to get cleared. Organizations need to set up significantly specialized departments so that they can deal with unplanned happenings." At the same time, e-companies must realize that the diversity of skills within their organization could easily give the impression that the enterprise is in disarray. Special efforts must be made to present a united front.

There Are No More Enemies. E-businesses will compete on how well they can do what they do best. So unless their core competencies include financial accounting and buying office supplies, they are better off outsourcing these functions to companies that specialize in them. "There will be a lot of new alliances forged in the new Internet economy," predicts Joseph Lee, executive director of Goldman Sachs in Hong Kong. "Part of the answer will be looking to join forces with other companies in different regions."

Not Everything Will Be Repealed. Some things never get old. "Taking advantage of Internet opportunities often just means going back to what you learned in Business 101 and adapting everything to technology," says Hong Kong businessman Fung. "Companies should remember to go with their traditional strengths before going online." The basic values that make a company what it is can still be the best foundation for the reinvented new economy enterprise.

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