This time last year it seemed inconceivable that so many US dot-com companies would scale back their operations - much less close their doors. Today most survivors congratulate themselves on their ability to hire from a greater pool of talent as people who worked for these companies return to the job market. The common thread between all these dot-com setbacks is lack of experience. As the specific business segments these companies entered began to mature, it became clear that most of the dot-coms lacked the technology and management experience to scale up the business to meet new challenges. Most of these dot-com companies were focused on business-to-consumer ecommerce opportunities, which we all know now is inherently hard to do. In fact, the majority of the venture capital community is refusing to fund these types of entities because the cost of acquiring customers and the technology infrastructure needed to support them once they are gained is directly at odds with trying to make a profit. As a result, everybody is now focused on the opportunities provided by business-to-business e-commerce, now the latest Holy Grail on the Web. At the moment, there is a lot more talk about this subject than actual business transactions, but just about every major IT organisation is gearing up to support those efforts. How that currently manifests itself is in a lot of work on enterprise application integration. If you peel back all the hype focused on e-business, what you find on a technical level are efforts to create a common data architecture across multiple applications. For most companies, the heart of these efforts is XML, which provides a consistent interface for ERP (enterprise resource planning) applications to be integrated with e-commerce systems, customer management systems, and supply chains. Once this is accomplished, we should be able to drive days and even weeks out of business transactions, much of which is wasted transferring data between these types of systems. What's ironic about all these efforts is that the negating factor for many of the undertakings will be the exact opposite of the one that doomed many of the earlier dot-com efforts. Whereas the dot-com companies are suffering from a lack of experience, the business-to-business space is likely to be weighed down by too much experience. This issue will make itself felt on two distinct levels. At the technology level, a lot of time and effort will be spent on trying to retrofit legacy systems into new business models because there is some perceived business value in that system. At the management level, experience also will have taught some people that there is just no way that certain e-business transactions will ever work even though some competitor across the country might be making them work just fine. Taken together, both of these perceptions can amount to a lethal cocktail for any business entity trying to move its operations to the Web. In fact, it is this experience factor that will lead directly to the collapse of some Fortune 1000 companies unable to adapt to new business models. The bottom line in this world today is that too much experience can be just as big a problem as too little experience. In an ideal world, most companies prefer to assemble teams made up of people with a diverse level of experience - to overcome being too dependent on one mind-set. But the reality is that maintaining that level of balance in your organisation is incredibly difficult to do because it involves more art than science. In the current world of business, we live in extremely perilous times where a single misstep can cause your company to drop market share, to occupy the second, third, or even fourth market-share position in your industry. And as we all know, once you fall below third place in terms of market share, it's hard to justify your existence. So buckle up. If you thought what has transpired in the last two years was fast and exciting, you haven't seen anything yet.
Michael Vizard is editor in chief of InfoWorld. Send him email at michael_vizard@infoworld.com and letters to cw_letters@idg.co.nz.