E-Business – what happens to the people?

There’s no doubt in every
businessperson’s mind e-business is the way of the future. Every boardroom is discussing the issue, every business publication is full of it, and new reports and books are being published on the subject.
It’s quite simple. New technology and the Internet represent the most significant change to business practices for decades, if not for all time. It’s impossible to predict the business environment of the next 50, or even 20, years.
Technology is moving too fast.
Business people in New Zealand and around the world are right to work hard preparing e-business strategies Ñ the worry is, that most miss out on one of the most important threads to consider in their strategies. What happens to the organisation’s people when you adopt e-business practices?
What are the HR
implications of e-business?
Many early e-business projects have failed because this issue hasn’t been properly addressed. Management has failed to consider basic issues like staff numbers, relevantly skilled staff, management support and stakeholder buy-in in their e-strategies.
Without these considerations, e-business is doomed to failure.

E-business is not the same
as e-commerce
It’s an important distinction to make. E-commerce uses the Internet as means of conducting sales transactions, while e-business leverages new and existing technologies to interact, transact, communicate and collaborate with every organisation stakeholder including employees, customers, suppliers, advisers etc.
E-business significantly changes the way business is conducted. It’s whole new ball game.
At its most basic level, e-business means that people in an organisation won’t need to interface personally so often Ñ businesses will need fewer people in these traditional roles.
Consider the impact in the banking and insurance industries, for instance. E-banking (and it’s already making great inroads in New Zealand), will have as big an impact as the introduction of cash, then eftpos, and it’s safe to predict radical downsizing in the industry. Bricks will give way to clicks.

Virtual salespeople
The same applies to traditional sales and marketing roles. Some salespeople will argue that people will always prefer face to face interaction during the sales process.
True, but there is no reason why e-shoppers on the Internet shouldn’t be able to click on videoconferencing facility during their Internet shopping session.
Indeed, this idea has already been surpassed. Some sites currently operating allow the shopper to choose virtual salesperson of your choice (you choose their voice and looks!). More important than these aesthetic issues, your virtual salesperson is able to recall your buying history and develop an understanding of your preferences. So what, then, will the ?real’ salespeople do in future?
Consider also the role of the agent or intermediary in the supply chain. Customers will increasingly purchase products and services such as travel, insurance and investments direct from the supplier rather than through an agent. Many traditional roles like the travel agent or insurance broker will, simply, disappear unless those industries can find new ways of adding value in the e-business environment.
Businesses which employ agents should start considering new strategies to invest in the development of these staff to help prepare for this change.
Facing up to transformation
Some roles will be completely replaced. Those that survive will need to be changed radically.
If roles change by more than 30 percent, HR managers will need to implement appropriate change management strategies to mitigate risks and comply with legal requirements. These change management strategies will need to include communication and consultation with key players and detailed plan to manage staff during the change process.
Businesses embracing e-business will need strong leadership and management to help transform the business.
According to Deloitte e-business specialist Alasdair MacLeod who was CEO of ?virtual’ power company before joining Deloitte: “To succeed in this environment, managers need to learn to let go lot more. Learn to trust your people Ñ give them room to move and room to grow. Many of the issues that arise in an e-business environment require resolution much faster than traditional organisational decision making permits. If you’re control freak, avoid e-business.”
E-business will change employee’s roles and responsibilities Ñ core competencies, performance measures, recruitment policies and practices and assessment tools will all need drastic revision.
“The issue is not only how to hire people with fundamentally different skill sets, but how to retrain the existing workforce,” says Brenda Sayers, Deloitte partner, management solutions.

Training is critical
Training will become critical then. Businesses will need to conduct skills audit to ensure training and recruitment efforts are geared towards producing workforce with appropriate and relevant skills. It will also be important because if the right skills are not identified, employees will become unsure of what development they need to progress to the next job level.
Needless to say, this emphasis on training could put severe pressure on HR dollars spent and have short-term impact on profitability. That is decision which management is going to have to take.
Furthermore, because security aspects of e-business are so important, appropriate Internet use protocols will need to be developed and Ñ equally importantly Ñ policed. In many cases existing policies may be appropriate, but an audit will be required to assess current policies in light of the new business conditions.
These are exciting, yet very challenging times for senior management and HR professionals. The Internet does not only affect sales Ñ it will have significant impacts on everyone in an organisation Ñ indeed the nature and culture of the organisation itself.
Businesses need to start making some tough decisions, not only about where they fit in the e-business model and how, if at all, they need to start thinking about changing their business’ HR policies to make it work.
It is simply too important to ignore.

Mary Kennett is member of Deloitte’s HR team that helps clients with the HR/people implications of e-business.

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