There's no business like e-business.

• Author: Palmisano, Samuel J.
• Position: Shareholder Value

E-business is the next revolution and, just as Henry Ford did, it is imperative that CEOs and boards position themselves today to maximize every opportunity it brings.

Early in World War I, Henry Ford sailed a ship to Europe with a group of influential religious, academic, and business leaders. His intention was to appeal to heads of state across central and western Europe to "get the boys out of the trenches by Christmas." Three weeks later, Ford returned to the United States. "I didn't get much peace," he said, "but I learned that Russia is going to be a great market for tractors."

There is something in the fiber of every business executive that instinctively searches for the next major market, the next big idea, the product breakthrough, or the newest, best way to do business. I see it in every CEO I meet.

Henry Ford was lucky enough - rather, smart enough - to discover Russia, the Model T, and the assembly line, among many things. The giants of manufacturing invented Electronic Data Interchange, computer-aided design, and just-in-time inventory. We have seen telephones and typewriters, photocopiers and fax machines, call centers and computers transform modern business.

Where is the next revolution? The answer is in the reality behind the hype called the Internet. And it is critical for every executive who wants a business to thrive to grasp this reality and harness it before the competition does.

Computers and networks

IBM calls it e-business. It's a combination of computers, networks, smart people, and business goals. We take computers that used to sit in isolation on our employees' desks, and use networks to link them to each other, to our central systems, to those of our suppliers, even to our customers. When we connect these computers, we are actually connecting people, enabling them to communicate faster, easier, and more accurately. E-business is also about expanding into new markets by using the Internet to sell goods, services, and information.

E-business is nothing short of a revolutionary way to cut costs, grow markets and profitability, and improve shareholder return.

In a time when globalization, cycle time, speed to market, and customer loyalty are at the center of discussions in the boardroom, e-business is so crucial that to ignore it could jeopardize a company's competitiveness. It presents a huge cultural issue as well: Are you willing to open the boundaries of your enterprise and bring in your extended team in a truly...