Revenge is sweet.
A year ago, Old Economy stalwarts like $100.7 billion Enron Corp. were ridiculed for their slow pace in moving to embrace e-business. Today, those same companies are being showered with accolades and awards. Most recently, the Massachusetts Institute of Technology Sloan School of Managements eBusiness Awards last month named Enron—the No. 1 buyer and seller of natural gas and the top wholesale power marketer in the United States—eBusiness of the Year.
Thats right, gas and electricity. It didnt seem very “e” at the height of the Internet hype, but it sure does now.
“Some in the past have been looked down upon for lack of speed in moving into the dot-com space,” said Gary Mi, MIT Sloan M.B.A., 2001, and co-executive producer of the awards, in Cambridge, Mass. “Now the bubble has burst, and the true winners are about to stand up,”
The coveted, student-run eBusiness Awards were founded in 1999 to recognize and reward successful innovation in e-business. This years jury was composed of experts from industry, academia and the press. An open call for nominations went out in December and resulted in 612 online nominations. (For a full list of winners, go to www.mitawards.org.)
So what is it about an Old Economy behemoth such as Enron that got it through the Internet economy shakeout without crashing and burning? Smart use of domain expertise plus technological savvy. The company knew how to buy and sell energy products well before the Internet came along, and it had the technology muscle to translate that expertise to e-business. Smart leveraging of business infrastructure is another weapon that Sloan School e-winners share.
One example of knowing how to plug bricks into clicks is Tokyo-based Business Transformation award winner Seven-Eleven Japan Co. Ltd. Seven-Eleven, the largest convenience store chain in Japan, in June introduced 7dream.com, an e-commerce portal that allows consumers to order and pay for products over the Internet and have them delivered to brick-and-mortar stores.
Soon, customers will even be able to log on to the portal wirelessly via a cell phone to order books and arrange pickup at their corner convenience store—and with all the Seven-Elevens dotting the Japanese landscape, its easy to see how much money that will save customers in shipping charges. Amazon.com, eat your heart out.
Enrons another one that knows how to deliver the goods. “We know how to deliver products … to customers every day,” said Greg Piper, chief operating officer of Enron Networks, in Houston, the unit that handles worldwide technology infrastructure, applications, e-commerce, and midoffice and back-office logistics and settlements. “We just wanted to make sure we could do that in an easier fashion. We didnt get bothered either way by [Internet hype].”
Enron spun off the Networks unit about a year ago—admittedly, pretty far into the e-business Gold Rush. In 1999, it launched Enron Online, an online portal that displays real-time prices and products to dealers of 30 products, including natural gas, electricity, paper, pulp and fiber-optic bandwidth capacity.
Yes, bandwidth. Enron barters it just as if it were a pile of pulp.
Its that ability to build on domain expertise that has allowed Enron to rise to the top of the e-biz heap, Piper said.
“There are a lot of technology companies that dont have a lot of domain expertise,” he said. “Then theres a lot of people with significant domain expertise who dont understand how they can leverage technology to do what they want to do. Were a leader in both.”
It helped that Enron didnt try to reinvent the wheel. Instead, the company bought off-the-shelf products and wrote proprietary code to piece it all together.
One example is its use of Tibco Software Inc. messaging software to link various platforms behind its EnronOnline site. The platforms include an Oracle Corp. database and—heres the proprietary part—Enrons DealBench, an online collaborative Web platform that enables clients to share documents and Webcasts and to manage deal information, all running off Sun Microsystems Inc. servers.
But nobodys saying the economy hasnt been tough on even these e-business survivors. Thats evidenced by slumping stock prices and layoff announcements at eBusiness of the Year finalists Cisco Systems Inc. and Walmart.com. Both have recently announced layoff plans.
But layoffs can actually testify to an enterprises tenacious grip on its e-business strategy, said Walmart.com Chief Financial Officer and Vice President of Business Development Greg Penner. “The layoffs werent an indication were less committed to the business,” said Penner, in Brisbane, Calif. “They were made in marketing, places like that. We still have over 50 jobs open in engineering and creative site design. Were just as committed to building our e-commerce business as we were 12 months ago.”
Besides, as Ed Macri, awards co-executive producer, in Cambridge, said, the awards dont predict success. “We dont have a crystal ball,” Macri said. And, after all, its not surprising that survivors bear scars.