How Electronic Commerce Is Transforming Business Processes
Issue 1, 1999
Consumer goods & retail, Strategy, Technology & innovation management

It wasn't too long ago that the idea of a company outsourcing its data processing was considered a revolutionary stroke of genius. Outsourcing allowed the company not only to cut costs and prune assets, but to rent time on its own applications. In the world of Internet–based computing, this innovation will quickly evolve to the next step, in which companies will outsource not only the computer running the transaction process, but the process itself. Now that one company's production planning system can be seamlessly merged with another company's inventory management system, and both systems can be managed by a third entity charging transaction fees to both of them, it is easy to see the next model: companies with no "physical" presence in the world except for the desks that host the "minders" (and even these might be spread across the planet, reflecting the work habits and lifestyles of the individuals involved). E–Trade, the Internet stock trading company, is an early prototype of this type of venture. Over the next decade, other models will emerge that will stretch current notions of the enterprise and radically challenge such basic concepts as ownership, markets, and – most certainly – competition.