GUEST COLUMN: Olivier Kohler

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Since the global adoption of the Internet, we have seen long-standing business paradigms change virtually overnight. Many companies have restructured their business models, dot-coms have disappeared into thin air and, most recently, exciting growth has occurred in online interaction and e-business.

Globalization-coupled with more sophisticated customer expectations-has been a key driver of growth. The adoption of e-business as an integral component of business flourished during the time of the merger between Compaq Computer Corp. and Hewlett-Packard Co. in May 2002. This merger provided a catalyst for HP's development of a stronger and more cohesive b-to-b strategy. It was an ideal time for HP to restructure its business model to embrace global markets, to meet customer and partner demand, and to adapt to change. E-business cannot be fully embraced without altering business as we know it.

Companies realized that increased globalization of e-business offered unprecedented opportunities, despite the complex challenges of crossing cultural, linguistic and national boundaries. HP centralized its content management and analytics to ensure that includes the most current data, uses a customer-centered design and has a consistent global presence.

Channel and partner integration online also became key, with the goal of seamlessly working with partners online and responding rapidly to changing market conditions. The use of extranets and supplier integration with customers' internal systems have grown along with the number of customers who rely on Web-based tools.

The shift from transaction-based to relationship-based customer interactions and personalization added a new dimension to how companies interact with their customers. Some companies have struggled with how to personalize customer interactions and deliver truly valuable content.

Through this evolution, HP realized that customization is foundational and developed a targeted approach to better meet the needs of specific industries and customers. HP also started using customer behavior data to drive the greater insight needed to strengthen its bond with customers. At the same time, HP increased its efforts to maximize customer data, knowing that privacy would continue to be an important issue.

As online communication grew, so did the desire to make it easier for customers to engage online. HP introduced advisory councils, paid attention to analytics data and improved and expanded capabilities. Additionally in 2004, HP created an e-business, customer and sales operations organization as a more streamlined, customer-driven business group to optimize its go-to-market operations and provide a more consistent, positive experience relevant to customers individually.

Since the evolution of e-business and the restructuring at HP, the number of visits worldwide to has grown by an average of 21% year over year (currently averaging 63 million visits each month). Also, a recent pilot targeted to HP's small and midsize business customers to improve their experience and increase cross-sell and up-sell opportunities through the Web and call centers has shown impressive results: Overall product attach rates have improved by as much as 18%, average order value has increased in the range from 2% to 26% (depending on SKUs) and attach revenue increased by as much as 17%.

Additionally, the number of business accounts using HP's b-to-b online solutions, such as customized Web sites or HP integration with their internal systems, has grown exponentially, with e-orders growing at a 25% rate quarter over quarter. The use of HP's order status and reporting tool, for example, has increased 34% since the beginning of the financial year in 2004. In addition, HP's targeted e-marketing efforts are posting remarkable returns. For example, personalized portals that target individual enterprise accounts-or by industry, region or common need-have resulted in three times more frequent customer engagement and up to 10 times higher response to offers.

Consumers are now in the driver's seat and have higher expectations of businesses online. In turn, companies must learn to adapt quickly and improve processes to enhance customers' online experiences. E-business will continue to require fundamental transformation to capitalize on its promise.

Companies must also continue to look for new and innovative ways to increase usability and efficiency across all areas of interaction between customers and to provide the best possible experience.

Olivier Kohler is senior VP-e-business, customer & sales operations at Hewlett-Packard Co. He can be reached at [email protected]

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