Keeping it simple

Pro

The Fifth Annual Conference of the Irish Internet Association held in Dublin in September was revealing from a number of points of view.

Not least among these was the way it showed how Internet technology has moved from being a toy for geeks, through its gold rush phase where its purpose seemed to be to provide instant riches to those with a pioneering spirit, to its current state where it is perceived as a vital tool for businesses new and old.

Looking around the auditorium, one was struck by the preponderance of suits and briefcases — there was scarcely a hard-rock haircut or a T-shirt to be seen. There were no pitches for hare-brained ideas that would exploit the chaos of the New Economy to deliver riches without such old-fashioned mechanisms as cash-flow and profits.

Instead, keynote speakers illustrated how far the Internet has become embedded in the business practices of traditional companies and posed some intriguing questions as to where it is going.

Speakers Barry Collins, from Dell’s EMEA e-business team and Willie Walsh, chief executive of Aer Lingus come from companies which represent, in many ways, contrasting sides of the Internet revolution.

Both companies predated the Internet as a popular phenomenon. They were in business selling products and services before anyone outside a research lab had heard of the Internet Protocol or the World Wide Web.

Dell was one of those companies that instantly and expertly moved the execution of much of its business online. In an era during which many PC companies have retrenched, amalgamated or gone out of business altogether, it has grown its market share and maintained growth as well as profitability.

By contrast, Aer Lingus was hammered by the Internet. It was slower to react to selling itself online and received a fearful battering from rivals who did, in particular from the ‘low-cost’ carrier Ryanair.

The special problems affecting the air travel industry in times of international pestilence and strife should not be discounted, but they do not concern us here. What does concern us is how Aer Lingus has, to its credit, fought back and is raising the profile of its online business. Fares have been slashed, there is a new emphasis on simplicity of execution — ranging from procurement of aircraft through to management of sales — and the airline is now keen to differentiate itself from its rivals based on the quality of service that it can offer.

But here’s the rub. The Internet has so far benefited companies with simple business models. Dell will sell you a PC customised to a degree that it sets itself. Such matters as post-sales service and system integration are left to third parties.

Ryanair will fly you from A to B. No chance of a connecting flight, a seat number or a choice of in-flight service. It’s an unashamed one-trick pony.

The success of both Dell and Ryanair in difficult times for each company’s industry shows that such simple business offerings are popular with the public. Each company is in competition with other companies that differentiate themselves on the quality of the additional services they supply — in effect, on the complexity of their offerings rather than their simplicity.

Will the Internet be as successful in helping companies broaden the range of services they offer in the future, or will it force more and more companies into a ‘no-frills’ concentration on simplicity and narrow choices?

We shall see.

10/10/2003

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