| Power Lunch and ... |
a Power Lunch*
and a feature story
- on you - in Backbone
and an iPhone or a BlackBerry
To enter...
Fill out a readership survey
(confidential)
*with Dave Chalk, technology expert and our editor, Peter Wolchak |
|
|
| Convergence: the last big dream |
July 10, 2002 |
By Peter Wolchak
Convergence has really taken a beating lately. jean monty fell on the corporate sword as money drained from the leaky coffers at BCE, with only two of its six main divisions generating any real revenue. And Steve Case’s piloting of AOLTime Warner into a US$181 billion supermerger resulted in a financial nose dive as the stock lost more than 60 per cent of its value in one year. The company’s overall market value also plummeted to US$80 billion from US$250 billion when the convergence deal was announced.
Convergence is the idea that a company can toss its business competency into a big cauldron, throw in a handful of disparate corporate acquisitions and then, simply by stirring hard enough, make the concoction gel into one profitgenerating enterprise.
In medieval times, this hocus-pocus was called alchemy—the transmutation of base metals into gold.
It didn’t work then, and in most cases, it’s not working now.
But before we pull the sheet over the converged corpse it’s important to recognize the movement for what it is: the last great gasp of the dot-boom gold rush. The current round of convergence as a business tool occurred during heady days, when the Web’s siren song deafened people to the voices that still cried on about profit statements, business plans and balanced budgets. The grand strategy was grab an idea, dot-com it and the money will flow in.
More often than not it simply didn’t work. Pets.com, WebVan and Empori are three examples among thousands in the dot-boom dishonour roll.
A clever ad from
IBM drives this home; the tagline “Bad ideas don’t get better on-line” is accompanied by an illustration of a square wheel and the address http://www.squarewheel.com. Convergence took this type of optimism and played it out on a grand stage, for if one dot-com notion is valuable then a whole bundle of new ideas is priceless.
Bigger is better, right?
Wrong, and the dot-com alchemy fizzled, but out of these base elements have come new technologies, open business practices and a determination to get it right this time. In short, the current healthy and rational e-business climate.
We now know that when pets.com dropped dead it wasn’t because e-business doesn’t work. It was because a snazzy Web site can’t convince people it’s a good idea to buy a 40kg bag of dog food online. But a pet supply store that marries an online customer relationship system to a strong marketing Web site — well, that will probably deliver benefit.
The same rationalization is happening with convergence. BCE, for example, is generating real value by uniting the internal business processes of its various wings. For example, customers of Bell’s many divisions will receive a unified bill, according to Georgina Steinsky-Schwartz, Bell Canada’s chief human resources officer. This will be both more convenient for customers and cheaper for BCE.
And this is only one example of BCE’s internal rationalization. “What we’re really doing at BCE is making it easier to do business with us,” Steinsky-Schwartz said. So it turns out convergence is less about big-bang deals and more about taking progressive steps toward efficiency and customer service, which in turn will yield better profit margins and new revenue streams.
That view of convergence is not sexy, but like e-business in general it has a much better chance of actually delivering benefit.
|
|
|
| Top 300 Issue |
 
|
| Gadget of the Week (Canadian) |
|
Boost your cell
ARC Wireless Freedom Blade
Mobile data and voice are great, as long as the signal is strong. And while mobile networks are pretty good these days, road warriors quickly discover that dead zones still exist.
more>>
|
| Gadget of the Week (Japanese) |
Sounds of Japan
Why record just the visual when you can capture the sounds as well.
more>> |
| Backblog RSS feed |
Click to subscribe  |
|
sponsored by 
