What are the Internet and the Web doing to traditional electronic commerce? What are the possibilities for reducing costs and generating revenue?

Keen and Ballance promise straight talk about what the Internet and Web are doing to classical electronic commerce (EC). Their style is conversational, suitable for senior executives and their information technology (IT) savvy staff. They discuss ways to exploit both traditional electronic data interchange (EDI) and Internet- and Web-based technologies.

The business case is clear. Paper documents cost 20 to 45 percent of a company’s labor expense, or about 5 percent of the total US gross national product, and EDI is proven technology in the battle against bureaucracy, so EDI provides opportunities (and pitfalls) in abundance. Solid, sustainable 20 percent growth in EC, including the contribution of the Internet and Web as the next wave, on a year-to-year basis yields both less and more (pp. 172, 209). It is less than the wild-eyed predictions of the Internet trade press, but it is more than the sustainable growth in most other sectors of the economy, where 8 percent would be considered an economic miracle.

As a vehicle for reducing expenses, EC is a competitive necessity. When the competition and your trading partners are doing it, EDI and the context of verifiable trust in business relations in which it flourishes become an imperative.

As a vehicle for opening up new possibilities of revenue, the Internet and Web are a strategy for competitive advantage. The advantage will go to those businesses that get beyond the online transaction and build the trust required to extend the brand into a new business domain.

EC encompasses automatic teller machine networks, electronic funds transfers, and supplier-customer relations using EDI as defined in open standards. These standards define business-to-business relations, which, the authors suggest, are ahead of business-to-consumer EC. This is likely to remain the case, regardless of conceivable security features (which are discussed in detail), until a breakthrough in trust occurs.

Objectively considered and with available encryption, the Web is as secure as using a credit card over the phone or letting a waiter carry the card behind a restaurant partition. Businesses know that and are starting to trust the Web. But what about consumers? Will the Web change consumers’ lives the way the self-justifying, intuitively obvious cash machine has? Currently, we simply do not experience that level of trust as consumers.

How is trust created? This is where the authors are insightful. A “hit” on a Web page does not create trust or a relationship with a customer. A hit is a transaction, not a relationship or an interaction. A transaction is a commodity, and it makes anything thought of in terms of transactions into a commodity.

Keen and Ballance suggest that what works is a brand. When everyone in the industry has access to the same technology, management leadership in designing customer relations and developing the brand are what make a difference.

For example, there are Web brands, such as Amazon.com, Virtual Vineyards, and Auto-by-Tel. These brands have grown up on the Web and are meaningful on the Web. Without the Web, they would not exist. They are like a proof of concept, inspiring the business imagination with a credible risk/reward ratio.

There are also brand Web sites, including Cisco, Federal Express, and Dell. These brands existed independent of the Web, but were successfully extended to the Web by the thoughtful design of the relationship with the customer using Web technology. Configuring networks, checking on package delivery, and ordering components are basic business activities that satisfy customer requests. Thus, the Web supports the enterprise. Indeed, these Web sites make money for their companies, whereas Amazon.com, though likely to be successful, has not yet turned a profit.

Thus, trust is not a feeling. It is a skill to be demonstrated and exercised within a relationship. That is not only a technical opportunity. It is a business task, which is why management makes a difference in spite of open, commodity technologies. This is the basis on which Keen and Ballance deliver on their promise of providing a manager’s guide. For that reason, this book promises to outlive the valid and extensive technical briefings it contains.