Going digital for dollars: e-business demands a new wave of respect from today's brick-and-mortar entrepreneur. (Book Excerpt).

THE ONLINE ECONOMY IS FAR FROM FINISHED. COMPUTERS AND Internet access have become ubiquitous in business and, despite the volatility of the industry and its respective stocks, technology continues to drive the economy and create a more level playing field for minority entrepreneurs.

Technology includes much more than the Internet. Computer hardware and software, cellular phones, pagers, networks, PDAs, and the like all play an important role in business development. The reason that the Internet has taken center stage above and beyond other emerging technologies is because of the myriad opportunities it affords entrepreneurs. Locating new suppliers and accessing new markets, getting quicker access to government and corporate contract opportunities, performing business-related research, streamlining data transfer, and offering clients additional communication methods are all simplified by Internet-based technologies.

The smart entrepreneur recognizes that information technology (IT) is a tool for addressing needs rather than an end in and of itself. It is a path, not a destination. Using information technology, we can learn to increase and manage knowledge so that the digital divide does not become an ever-increasing "knowledge divide."

Successful entrepreneurship involves vision, creativity, and long-term planning. In the new economy, entrepreneurs must use information and technology to take relationships to a new level. Not only do they have to strategically integrate technology developments into their businesses, they must now focus on swiftly and effectively managing high volumes of information and globally connected employees, clients, and vendors.

E-business has little to do with being a dotcom and everything to do with utilizing information and technology to be more competitive, to enhance customer relationships and form strategic alliances, to improve communication, and to streamline business processes for efficiency (see sidebar "Defining e-Business," this article). All businesses should strive to become e-businesses, whether they're architectural firms, manufacturers, advertising agencies, farms, or home-based Web businesses. By identifying their businesses on this larger scale, African American business owners and managers can propel their companies beyond previous limitations such as lack of access to capital, inadequate communication methods, unskilled labor, and lack of information about contract opportunities.

Succeeding in e-business involves being committed to customer retention. Most of us realize that it costs more to get a new client than it costs to maintain a current client relationship. In virtual space, it is even easier to lose clients than it is in the traditional business arena. The ongoing Internet euphoria of the past 10 years has begun to wane for those entrepreneurs who realized--the hard way--that the limitless online opportunities available to them are also available to all of their international competitors, thus requiring a greater effort to maintain customer loyalty.

The Internet demands a much greater respect from entrepreneurs who initially planned to gain so much by investing so little. Managing an e-business involves smart marketing, superior customer service, and regular performance analysis. It requires having a clear understanding of your customers' needs; protecting their interests; and investing your time, energy, and money into solidifying those relationships. A successful e-business manager realizes that growing the company's Website beyond the electronic brochure stage demands a shift in mindset and strategy. Bather than feeling satisfied with merely having a Website, he or she focuses on creating additional value for clients through a full-scale Internet presence. The company's eCRM (Electronic Customer Relationship Management) growth strategy might include adding electronic order tracking, live help for sales or customer service via chat rooms or return phone calls, making purchase suggestions via e-mail based on previous orders, and maintaining a server-based profile and wish list for regular Website visitors.

The key to mastering eCRM is personalization. In addition to creating an engaging and safe environment, an entrepreneur must constantly analyze the customer and his or her transactions to further develop the company's marketing and Internet strategies. While it's important to fully understand a company's target audience, technology now allows even the smallest business to pinpoint the preferences of an individual customer. A successful e-business manager realizes that not all site visitors view the company's Website for the same reasons. Previously, sophisticated CRM technology tools were typically reserved for larger companies with big budgets. Thanks to Web audience measurement systems and the proliferation of application service providers (ASPs) targeting small business, smaller companies now have access to information and programs that help convert Website traffic into revenue and simplify marketing decisions.

MINIMIZING INTERNET USER SECURITY CONCERNS

Past issues of BLACK ENTERPRISE have addressed ways to protect business information that is stored at your business or maintained on your company's computers. Information that is transferred over the Internet has an entirely different set of problems. Customers greatest apprehension about doing business online is the fear of having their contact and financial information stolen or misused.

Due to the proliferation of spam, hacking, and Internet fraud, Website visitors are demanding to know how their information is being protected and used. To help e-business managers build online consumer trust and to protect consumer privacy, a number of privacy seal programs, like TRUSTe (www.truste.com), have been created. TRUSTe is a nonprofit organization that offers a licensing program that allows approved businesses to carry the TRUSTe seal--or "trustmark"--on their Websites, adding credibility to the sites and sending a message to visitors that the company has taken measures to protect visitor and client data. To carry the seal, a Website owner must complete a license agreement and self-assessment form, create and post a privacy policy on their Website, adhere to TRUSTe's Program Principles, and pay an annual fee. In addition to providing its seal, TRUSTe also assists licensees with consumer privacy complaints. Other privacy seal programs include PriceWaterhouseCoopers' BetterWeb Program (www.pwcbetterweb.com) and the Better Business Bureau's Online Privacy Program (www.bbb online.org/privacy).

If your Website uses cookies or collects Website visitor information (e.g., name, contact, or financial information) via registration or contact forms, it is important to add a clearly written privacy policy that explains why this information is being collected and how it will be used. For more information about privacy policies and protecting customer data, check any of the aforementioned privacy seal program sites, or contact the Electronic Privacy Information Center (www.epic.org) or the Online Privacy Alliance (www.privacyalliance.com).

For e-commerce, it is especially important to secure your site for the receipt and exchange of customer financial information. Customers need to feel confident that their information will not be altered or intercepted by hackers before they move beyond merely browsing and actually purchase your products. It's one thing to post a privacy policy on your site telling visitors how you'll be using their information; it is an entirely different task to protect that information from prying eyes. You or your Webmaster should confirm that your Web server employs Secure Sockets Layer (SSL) technology to secure Web communication. SSL technology encrypts any information exchanged between your customers and your company's Web server. SSL Server IDs, also known as digital certificates, can be obtained from VeriSign (www.verisign.com), a leading provider of corporate Website infrastructure services. (Prices start at $349 for the first year, renewals are $249.) VeriSign also provides an additional level of security that requires authentication before customers can access previously input information, minimizing impostor access to your client data. Sites using VeriSign's Server IDs are noted by the VeriSign security seal.

FORGING STRATEGIC ALLIANCES

No one is an island. And that certainly is the case in virtual space. Strategic alliances have been forming in record numbers for the purposes of increasing online sales and enhancing corporate brands. A strategic alliance can be a simple collaboration on a single project or a long-term union between two or more companies to add value to each participating company's products or services.

Many so-called strategic alliances are honor-based agreements between companies. Typically, Company A provides one service and Company B provides another to fulfill a contract. Or, Company A agrees to market Company B's products in exchange for discounted or bartered services.

A strategic alliance is defined as a formal joint effort between two or more firms to market a product or service for a profit. "The combined effort should exploit a perceived market advantage," says Stephanie Ardrey, principal of Ardrey Associates International "It is important for strategic alliances to provide clearly defined benefits to all parties involved. And, it is vital that the strategic alliance has specific goals and an exit strategy."

Unlike a full-scale merger, a strategic alliance brings the strengths of two or more firms together for a predetermined period of time and for a clearly specified purpose. Each company benefits by broadening its market base, concentrating on its strengths and sharing the overall--and possibly, reduced--risk. Affiliate marketing programs are a form of strategic alliance.

SuccessNet and AztecaNet, two Los Angeles-based minority-owned Internet service providers (ISP), formed a strategic alliance that saves them several thousands of dollars in operating costs each month. The founders of the two companies realized that each company had access to dial-up lines needed by the other so they combined their available lines, decided to share an office, and are now able to target an international audience.

Another minority-owned ISP, Atlanta-based Nubonyx.com, has formed strategic alliances with several minority-owned technology businesses to offer additional services and portal features to its growing customer base. The company has saved the cost of having to pay a contractor or hire an employee to develop custom applications and features. Subsequently, the year-old company has grown.

Due to increased corporate contract bundling, more and more minority-owned businesses will need to form strategic alliances to be competitive. Analyze your target market and consider those services that may add value for your customers. Pursue alliance partners before opportunities arise so that you're not left at the last minute scrambling to find someone to help you win or fulfill a contract. Also, have your attorney develop or review strategic alliance agreements so that your risks are minimized.

The "e" in e-business does not stand for "easy." The challenges are as limitless as the opportunities. The key factors involved in e-business are creating a usable site with relevant content; providing security (for both your clients and your business); providing excellent customer service and timely product fulfillment; selecting an effective team of employees; and forging legally binding, mutually beneficial alliances. Entrepreneurs who are more adept at these tasks are more likely to succeed in their online efforts.

THE ROLE OF OUR ENTREPRENEURS

The question for African American business owners and managers is certainly not "Should I incorporate new technology into my business?" but "How do I productively incorporate new technology and position my business for success?" Unless we employ strategic planning, technological limitations can and will impede business development and economic survival. This is not just about getting a Website, it's about doing what's best for your business' productivity overall.

African American entrepreneurs must find a way to effectively target the "Black Digerati"--those of us who have grown up with technology firmly integrated into our lives--without alienating the generations who are catching up (or resisting).

We are well positioned to benefit from the digital revolution, but we must not allow the knowledge divide to widen. We must continue to develop traditional and virtual communities based on industry, geography, or special interest that serve as conduits of technology information. Black entrepreneurs should participate in communities such as MOBE (Marketing Opportunities in Business and Entertainment), founded by Kofi and Yvette Moyo, and produced by their company, Resource Associates International in Chicago. MOBE has expanded from an annual symposium series to include the MOBE Institute, a virtual learning and business building center. This organization was one of the first to recognize black innovators with their annual MOBE IT award. They also hosted a White House briefing in 2001 that brought minority entrepreneurs from around the country to discuss access to capital and marketing opportunities with the Bush administration. Their Website features marketing news, a message board, and a schedule of events. This global network of black movers and shakers is an inspiring example of how we can use technology to achieve the American dream.

African Americans do not have the luxury of dealing with technology issues later, especially when this is one of the first times in history that we have a chance to get involved in the early stages of the online economy. We must maintain awareness, not only of new and emerging technologies but available business management information, programs, and resources offered by local technology centers and professional organizations, government agencies, and corporations to assist underserved communities. An actively expressed interest in this vital area--including verbal acknowledgment and participation--will continue the development of such programs at a time when some politicians and corporate representatives believe that the digital divide is closed or narrow enough to be "old news."

According to Mitch Duncan, group program manager at Microsoft, "African American entrepreneurs should leverage technology that enables them to adapt quickly and flexibly to fast-changing business conditions and customer needs. The effectiveness of e-commerce use by the African American community will lay the foundation and create new possibilities and opportunities for these businesses to market and deliver their goods and services to this target market in a competitive environment."

Globalizing African American business is more than a notion, and African American professional organizations have to take a stand as well. They must go beyond merely seeking sponsorship from major technology corporations to implementing hands-on demonstrations and workshops for member business. Zana Billue, president of Zana Cakes Inc. in Cleveland, Ohio, says that African American organizations spend most of their efforts highlighting advertisements from major companies who sponsor their annual events [but don't assist] African American businesses with becoming more competitive.

Organizations should also provide more information about getting access to capital through minority-focused venture capital firms like Idealflow, Springboard, and BLG Ventures.

A DIGITAL LIFESTYLE

The harsh reality is that if you don't have a computer and Internet access, your education, communication, career, and business opportunities will be limited. Technology development isn't expected to slow down any time soon. Within a few years, home networks will be commonplace. PC prices are expected to drop even further. More and more technology products will have advanced speech recognition abilities. We'll be using "self-repairing software" in our businesses, and our "smart houses" will come equipped with automated on-and-off scheduled lights and appliances, video doorbells with facial recognition software, and servers that control major household power sources. Interactive television will allow us to "click" on TV ads for more information instantly.

Whether you're ready or not, things are happening and changes are being made. It's up to you to get with the program or get left behind. New technology can and will enhance any business that uses it properly.

RELATED ARTICLE: Defining e-business.

for many entrepreneurs, e-business has been strictly associated with having a Website when the reality is that e-Business = Knowledge Management.

Successfully managing an e-business involves all of the tasks addressed in previous [issues of BLACK ENTERPRISE]--strategically integrating new technology developments, staying connected while on the road, hiring capable IT employees and vendors, developing a Website, and building a virtual brand. A Website is at the heart of e-business management. Additional elements include:

* Electronic Customer Relationship Management (eCRM)

* Minimizing Internet user security concerns

* Evaluating and minimizing electronic risks

* Managing virtual employees and telecommuters

* Forging strategic alliances

Electronic Customer Relationship Management

eCRM describes a combination of practices used by a company to collect and analyze customer data (including contact information and shopping habits). eCRM also refers to software applications that are used to streamline sales and marketing processes. The use of such practices and applications allows a company to better serve its customers and to build stronger relationships with them.

RELATED ARTICLE: Recommended Reading.

the Cluetrain Manifesto: The End of Business as Usual by Rick Levine, Christopher Locke, Doc Searls, David Weinberger (Perseus Books, $14)

From Bricks to Clicks: 5 Steps to Creating a Durable Online Brand by Serge Timacheff, Douglas E. Rand, Mark Eppley (McGraw-Hill, $24.95)

Permission Marketing: Turning Strangers Into Friends, and Friends Into Customers by Seth Godin, Don Peppers (Simon & Schuster, $25)

Silicon Ceiling: Solutions for Closing the Digital Divide by John William Templeton (Aspire, $179.95)

Delivering on Your e-Promise: Managing e-Business Projects by Yen Yee Chong (Financial Times Prentice Hall, $40)

Rethinking the Future: Rethinking Business, Principles, Competition, Control & Complexity, Leadership, Markets and the World Edited by Rowan Gibson (Nicholas Brealey, $17.95)

Virtual Leadership: Secrets from the Round Table for the Multi-Site Manager by Jaclyn Kostner, Ph.D. (Warner Books, $12.99)

RELATED ARTICLE: Bringing Technology to Black Businesses.

* Microsoft Big Day
877-435-7638
www.msbigday.com/african
american.asp

Free day-long seminar for small business owners based in the U.S. and Canada. Seminar demonstrations show how Microsoft's products and technology solutions can help improve small business efficiency.

* National Rainbow/PUSH
Coalition Silicon Valley
Project
650-323-7637
www.siliconvalleyproject.net

Rainbow/PUSH launched the Silicon Valley Project in 1999 to focus on the technology industry. Its primary goal is to build digital connections between minority-owned businesses and the high tech industry.

From the book Black Enterprise Guide to Technology for Entrepreneurs. [c] 2002 by Bernadette Williams. All rights reserved. Reprinted by arrangement with John Wiley & Sons Inc., New York. {Log on to www.blackenterprise.com to order a copy.)