IBM has been a huge presence in the computer industry since its inception in the 1940s. In the face of increased competition over the years, IBM has continually revamped its business strategy. Even more important, though, is IBM’s need to capture new business opportunities and technologies, such as EC, and to develop a business strategy for that purpose. Since 1999, IBM’s declared strategy has been to transform itself into an e-business in order to provide business value to the corporation and its shareholders.

To ensure successful implementation of its e-business strategy, IBM formed an independent division, called Enterprise Web Management, which has the following four goals:

1. To lead IBM’s strategy to transform itself into an e-business and to act as a catalyst to help facilitate that transformation.
2. To help IBM’s business units become more effective in their use of the Internet, both internally and with their customers.
3. To establish a strategy for the corporate Internet site. This includes a definition of how it should look, feel, and be navigated -in short, to create an online environment most conducive to customers doing business with IBM.
4. To leverage the wealth of e-business information accumulated in case studies to highlight the potential of e-business to customers.

Like many other companies, IBM first used the Internet as a static digital brochure, basically a tool for posting information. IBM is now moving towards comprehensive e-business, carrying out business transactions of all kinds over the Internet, intranets, and extranets between IBM and its suppliers, among members of its Business Partner Network, among its employees, and so on. IBM wants to become truly e-business-oriented and to focus on how it can use powerful networking technology to fulfill the diverse needs of its customers and partners.

One of the major issues in moving to e-business was the redesign of many of its core business processes on the Internet -including sales, procurement, customer care, and knowledge management. Implementing EC frequently requires such a redesign. IBM adopted a strategy of streamlining its core business processes by simplifying its internal business processes (using BPR), eliminating redundant IT applications (reduced from 16,000 to 8,000), simplifying IT infrastructure (reducing the number of data centers from 131 to 16), introducing standardization, creating one global network (instead of 31), and more.

The company targeted EC projects at those areas in which IBM could earn the biggest ROI. It focused its activities initially around eight key initiatives:

1. Selling more goods over the Web -- e-commerce
2. Providing customer support online, from technical support to marketing backup -- e-care for customers
3. Support for IBM’s business partners over the Web --e-care for business partners
4. Dedicated services providing faster, better information for IT analysts and consultants, financial analysts, media, and stakeholders -- e-care for influencers
5. Improving the effectiveness of “IBMers” by making needed information and services available to them -- e-care for employees
6. Working closely with customers and suppliers to improve the tendering process and to better administer the huge number of transactions involved -- e-procurement
7. Using the Internet to better communicate IBM’s marketing stance --e-marketing communications
8. Creating a visible and usable portal by modifying the old Web site -- enterprise portal

The company later added two more initiatives:
9. Using Lotus Notes and Domino, the company created many knowledge management applications -- knowledge management
10. Moving close to 50 percent of all training to the Web by 2003 -- e-learning

Some of these initiatives have already borne fruit. For example, the e-procurement system that spans IBM globally saved the company more than $6 billion in 1999-2002, reducing the maverick (unplanned) buying from 33 percent to 2 percent. Online sales were close to $20 billion in 2002.

However, there is more to e-business than just how many dollars per day IBM sells or saves on the Web. In the procurement area, for example, IBM is invoicing electronically to reduce the millions of paper invoices it sends out and to enable fast, competitive tendering from its suppliers. IBM has evaluated every step of the procurement process to determine where the use of the Web can add value. This has resulted in the identification of more than 20 initiatives -including collaboration with suppliers, online purchasing, and knowledge-management-based applications- in which the company is already reducing cost and improving purchasing. As a matter of fact, a new corporate culture has been created: People are sharing and collaborating and are happier in doing their jobs.