Beating the E-Biz Odds

Despite harsh economic conditions, FastTrack 500 top e-business innovators are winning by targeting service and tightening security.

Jaws dropped when, earlier this year, a division of health care giant Kaiser Permanente submitted a winning $4.05 million bid to buy the software, automated conveyers and Oakland, Calif., warehouse once used by failed dot-com Webvan Group Inc. to speed groceries to online buyers. Huge, ponderous Kaiser jumping into the discredited business-to-consumer e-commerce space?

Well, not quite. Take a second look, and the deal starts to make pretty good sense. Kaiser officials, whose bid reportedly beat out that of Webvan founder Louis Borders, explained that the integrated health care provider would use the software and automated warehouse equipment to streamline the process of moving vast quantities of medical and other supplies to its 27 hospitals in California.

"The decision was consistent with our long-term strategy of using Web technologies to improve quality and processes like our supply chain," said Eva Eagle, managing director of special projects at Kaiser, in Oakland. "Having a state-of-the-art, Web-enabled warehouse and distribution system will fit nicely with our e-procurement efforts. Were deploying Ariba now. Despite the dot-com fizzle, e-business is clearly where business is going."

Indeed. Despite sluggish economic conditions, troubling international affairs and the ongoing dot-com carnage, a great many enterprises, like Kaiser, have not budged from the belief that the best way to improve operational efficiencies, cut costs and solidify relationships with key customers and suppliers is to innovate with new business processes and Internet-based technologies. Youll find the most committed and innovative of those profiled and listed in this eWeek FastTrack 500 report for 2001.

The organizations on this annual list have consistently demonstrated a willingness to deploy cutting-edge information technologies in every phase of their operations. Whats more, those investments have resulted in clear, bankable benefits for customers, suppliers and, of course, the FastTrack companies themselves.

Take a look at the companies on the FastTrack 500 list, and two things become clear: First, e-business innovators are not limited to online retailers or consumer Web portal companies. In fact, theres hardly a pure dot-com on the list. Instead, these are established enterprises from a wide spectrum of industries. Of the top 100 companies on this years list, the largest percentage—28 companies—are services companies. The next-largest group—24 enterprises—are manufacturers, followed by financial services providers—19.

The second thing that jumps out is how deeply Internet technologies and e-business initiatives are permeating these enterprises. Once thought of as merely an alternative channel for distributing product information and taking orders, the Web and Internet technologies are being used by these innovators to transform just about every key process you can think of. The procurement and internal supply chain efforts at Kaiser (No. 183 on the FastTrack list) are good examples.

Another is whats going on at Snap-on Inc., the Kenosha, Wis., tool manufacturer and No. 71 on the FastTrack list. Like many others, Snap-on is using the Web to strengthen its relationships with dealers by rolling out extranets that offer everything from training tips to ordering and shipment tracking. The company is also mounting a CRM (customer relationship management) effort focused on Web advertising campaign management using services from Inc. But at Snap-on, e-business is going even deeper, transforming the companys products themselves. Snap-on is now, for example, in beta tests with customers on an online version of its Mitchell automotive repair and diagnostic information product line. Essentially, said Alan Biland, Snap-ons CIO and president of its Diagnostics and Information Business, Snap-on will become an application service provider, offering hosted diagnostic applications and content to repair shops.