Many CEO’s today, of large and mid-sized businesses tend to focus first on financial performance and cost containment, followed by shareholder value. They are connected to the hip of the CFO and COO. IT once was the golden child, seen as the “answer” to competitive advantage, today it is simply a necessary cost centre. The very nature of the Web flies in the face of what many businesses have come to focus on in the Western World. This creates a level of fear in the C-Suites, but not necessarily for what we might think.

In our work with enterprises small and larger, the three key positions we engage most with are the CEO, COO and CFO. The most common question we are asked is “how will this solution add to shareholder value and what is the impact to marketing/IT budgets?” Our view is that business has lost sight of what Peter Drucker said over 40 years ago, that “business must do two things to be a business; innovate and market themselves.” Do this, and you’ll turn a profit. As markets became highly competitive into the 1970’s and onward, and as countries like China or Mexico could manufacture goods cheaply, many businesses ended up with the Cost Leadership generic competitive strategy. The Web and changing media then created greater levels of transparency into the corporate world, and along came Enron and Conrad Black and others like them. More than these corporate crooks however, the Web has generated a whole new level of fear, perhaps not even put into words. It is the fear of having to become innovative again.

The very nature of businesses today is to produce a good as cheap as possible while gaining the best gross margin possible. This has been achieved in the manufactured good world by either moving manufacturing offshore or leveraging multi-national corporate entities to move goods around internally, avoiding tax and tariff liabilities. All of this means defined processes, with a side dish of R&D.

The Web completely flies in the face of this. The Web is not about defined processes (except in the network centres), there is no Rule Book and standards are weak at best. This creates fear for organizational experts and production efficiency gurus. The Web is the antithesis of ISO and Six Sigma. But it is undeniably there and is impacting business, whether they like it or not.

In our work, we’ve come to realize that it is the challenge of dealing with the difference between definable processes and controls that lead to shareholder value against a fragmented, openly collaborative and undefinable place of free thought and marketing.

Fortunately, this isn’t the case with the Web. Yes, there are no rule books and standards are shaky at best and more focused on the technical aspects than Best Practices and processes. But the Web allows for processes and we are seeing more and more process oriented applications arriving on the Web. Small businesses are increasingly taking advantage of them. The challenge for the enterprise is then in dealing with legacy IT systems and finding the ROI on investments into major IT projects. Many of which will be viable for several more years.

What the C-Suite will need to do in the coming years is to find ways in which the Web can help them to innovate, to reduce IT budgets and take advantage of someone else holding the processing capacity. What we are likely to see as this happens, and it is, is even more product innovations. Our very nature is to put processes in place where we can, and certain amounts of process, much as regulations, help produce efficiencies and reliabilities that enable further developmnt - and may see a return to Economic Profit.