Shecterle explains, If you take a look at [the Internet], you'll quickly realize that this is a way to get closer to your customer, improve customer services and get your employees connected not only internally but externally. What happens if, on the human resources side of my business, I need to staff projects with temporary employees? The ability to link out through the Internet to a marketplace really optimizes that business process. The ability to link employees directly with benefit providers, whether they're health or financial benefits, really leverages their time and business processes around that, and it allows me to provide a superior work environment.
New Economy Concerns
And now for the downside. (It's part of life, and it makes for a better story.) Since we have all this potential, it stands to reason, if we adhere to the opportunity equals risk hypothesis, that there are myriad problems that could turn out to be New Economy Grendels, spawning the need for countless cyber-Beowulfs. We already have Bailey's concerns; here's what our other experts told us they're concerned about.
The Human Factor
Hennings is concerned with undervaluing the value of humans in the [business] process. Humans will always be there, and will, in fact, be more important as time goes on. Humans are going to become extraordinarily critical, because machines are going to take away all the mundane tasks.
According to Hennings, this naïveté is exemplified in the failure of some marketplaces. As he puts it, They tried to embody negotiation in an exchange, and that can't be done. We all learned negotiation when we were two years old, fighting over a pail and a shovel in a sandbox. The sandbox analogy might rankle some consultants and business people, who might not prefer to be compared to children in a sandbox (although some business meetings can make a sandbox look like a model of decorum), but it's as sound as any you'll come across.
Hennings explains, One of the most important things we do in negotiation isn't to negotiate or determine the result of a set of known variables; the first thing we actually do is to decide what we're going to talk about. So I don't go into negotiations and say, Well, the price is going to be this. What do you think?' When I go into negotiations, maybe I don't want to even talk about price. Maybe today, I want to talk about how many of your products I can get over the next 12 months, or whether or not you'll commit to that manufacturer. Yet tomorrow, I could call you and want to negotiate price. The real issue is, in a negotiation, I'm actually determining the variables I want to talk about. The hype around the public marketplaces caused a dangerous oversimplification of the real process that goes on and why humans are needed.
The Value in the Value-add
One of the things Hunt is most concerned about in the New Economy is the inability of smaller companies to meet standards imposed by some organizations. He gives the example of the automotive industry. General Motors wants products delivered to their assembly line. Well, they happen to want their products delivered in what they call fiber-free' containers. Which means you can't take them in corrugated cardboard any more. And we, as a manufacturer, still pack everything in corrugated cardboard. That's one of the areas where the distributor adds value. Locally, they have the inventory, and they will deliver three of an item to a certain point on the production line in, basically, a plastic, recyclable container. As a manufacturer, we aren't going to get involved with it.
The smaller company may meet a specific need as far as the core components, but the necessity of different value-adds becomes a problem, particularly if the smaller organization is incapable of effectively collaborating with others to add value where needed.