In a physical sense, an electronic business is one which is “connected” in an electronic way with email, intranets and software applications. But that is a little like saying that owning a saxophone makes you a jazz musician. It’s not what you have, it’s how you use it.

In an e.Business, there is a change in the organizational pattern that defines how we manage our company, how we view and value our employees, and most importantly how we solve problems. The paradigm shift is not CAUSED by the connectivity and knowledge sharing; connectivity and technology simply permit the resulting behaviour change to take place more easily.

Let us look at the key differences between a knowledge-based e.business, and a traditional corporation.

ATTITUDE

In the classic industrial organization power is wielded by hoarding information.

In the e.business culture value is placed on sharing information. Managers who have built their careers by carefully controlling, and restricting, the flow of information find it difficult to grasp the value of shared knowledge and look for both reasons and technologies to restrict and control the flow. An organization whose culture values employees for their ability to follow routines rather than for their knowledge and experience, and that does not trust employees to natively act in the company’s interest, should not consider implementing an e.business strategy.

MANAGEMENT

In the classic industrial organization decisions are made centrally, and filtered down a pyramid of managers, who are trusted to convey, properly interpret and oversee the implementation. An e.business is inherently distributed, where implementation and management decisions are made locally. Distributed decision-making forms the basis of the organic, self-adapting organization. A fundamental requirement of an e.Business is connectivity, and the capability to coordinate the output of a distributed organization to support goal directed activities.

FOCUS

In the classic industrial organization, management focuses on optimizing individual processes. Because of its distributed nature, management in an e.business focuses on collecting and communicating key information. Distributed decision making leads to modular organizations, which means focusing less on the process and more on output (or throughput). Success is judged on achieving business goals, not the volume of hours spent attempting to achieve those goals.

COORDINATION

In the classic industrial organization coordination is accomplished through rather rigid organizational structures, progress meetings and backward-looking quarterly reports. In the distributed decision-making environment of an e.Business, coordination is accomplished by sharing key information that is collected automatically from the users directly involved in the process (such as a barcode reader on a production line) and organized as needed, on demand. Because coordination is based on live information rather than fixed reporting structures, an instant response to problems is possible.

COMMUNICATION

Our current information culture is structured around a publisher-push model. The user, already overloaded with information, is sent data just-in-case it might be needed. Work is often only started reactively when paper is put into an in-tray. The e.business is inherently a user-pull model, where users proactively fetch information based on their current requirements. This is perhaps the most significant aspect of the paradigm shift requiring behavioral changes in both publishers and users of information.

An e.Business encourages distributed decision-making, modular organizations, open communication, and application of employee knowledge. These are platitudes that most management today openly espouse. Be aware that actually implementing these platitudes, even with the help of experts, will likely raise some difficult management challenges that will test your commitment at many steps along the way.