E-Business' 12-Step
Vendors with hangovers need to reassess their core values

By Paul Stockford

As I’m writing this, countless people around the world (New Orleans, Houston, Rio de Janeiro) are nursing their Carnival hangovers, promising themselves that they’ll never overindulge again for as long as they live. The same thing is happening in the office campuses across America; the e-business industry is starting to suffer one of the greatest economic headaches of all time.

Carnival, or Mardi Gras, is a world-class party. It’s an opportunity for normally conservative and otherwise respectable people to cut loose and party like there’s no tomorrow. But there always is a tomorrow (aka “the morning after”), and it usually accompanies a churning stomach, splitting headache, a struggle to refocus what was once blurred vision and boundless remorse. And there’s a big mess for the host to clean up.

No Aspirin Can Cure

There are a lot of hangovers in the U.S. e-business sector and in the contact centers that have supported these e-businesses. It’s been a wild, memorable, anything-goes, let’s-throw-out-the-business-plan-with-the-bathwater bash stopping just short of debauchery.

The whole thing started in 1999 as a minor celebration when an avalanche of marketing hyperbole and the Media’s need for headlines created an aura of infallibility in the contact center market. There were promises of immediate riches to anyone or anything that had an “e” in front of it and a “.com” behind it.

Industry spin doctors and especially the equipment and software vendors did an outstanding job of convincing gullible venture capitalists that an e-party was about to begin. All that was required to tap the first keg was a few million dollars in venture funding and a passel of slick marketing managers to position these companies as leaders in the new e-business economy.

Lots of companies fell for the invitation to revel. Vendors poured millions into new advertising campaigns to reposition themselves away from traditional call center products and re-create themselves as “e-business innovators.” A product wasn’t a product — it was a solution. A product launch wasn’t a product launch; it was a revolution. These people were starting to party like frat boys after mid-term exams.

Still, there were other companies that remained sober. They focused on real-world products and systems that weren’t as e-xciting but were clearly of interest to call center managers who were wondering what the hoopla was all about in the first place. These vendors didn’t partake in the revelry by trying to be anything they really weren’t. They didn’t add a “.com” to the end of their names and didn’t try to seduce investors with e-mpty promises. The result for these companies has been sustained growth – the kind of sober growth that comes only from clear-eyed vision and clear-headed thinking.

Many other vendors – and a lot of big ones at that – partook of the festivities and now have to look at their collective ragged faces in the morning -after mirror. This must be particularly distasteful in light of the number of hard-working folk who are losing their jobs as a result of management and marketing over-indulgence.

The Struggle to Sobriety

Still many other high-profile vendors are struggling to find their way back to profitability, trying to make sense of acquisitions of companies whose products no one seems to want, overcoming SEC investigations of false financial filings (cooking the books) and putting on a public smile while they lay off thousands of employees who believed the company’s Web strategy would be their path to personal wealth.

These are the companies that were caught with their pants down when the party was over. Many sunk tens of millions of dollars into products and services that the market wasn’t ready for or simply didn’t want. To make matters worse, these companies didn’t have a backup plan; there were no alternative ideas waiting in the wings to replace prdouct offerings that went nowhere. Their hangovers will last a long time.

Paul Stockford is president of Saddletree Research (saddletreeresearch.com). Send questions or comments on the issues presented in this column to CIrespond@advanstar.com.