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Over recent years many companies have dramatically improved internal process efficiency through initiatives like business process re-engineering and the application of IT systems such as ERP. Now, e-commerce places additional pressures on businesses, but also offers new opportunities. By successfully integrating electronic commerce with internal operations management, companies can dramatically cut the cycle times of all processes - product development, manufacture, and even distribution.

These revolutionary improvements (Ford, for example, is planning to cut the design time for a new car from four years to merely 18 months) can only be achieved through the digital processing of all items, processes and transactions within an organisation. To attain the flexibility and speed of response necessary to adjust to a fast-moving business environment, everything from credit risk management to placing orders for paperclips has to be as automatic, quick and painless as possible.

However, this requires an entirely new approach towards interdepartmental operations that, for many companies, may come up against ingrained attitudes. But a business that can?t boast the process excellence that e-operations enables will not only be easily left behind by its competitors, it is unlikely to ever catch up. Any e-commerce efforts, for example, will falter when additional strain is placed on poorly performing back-office operations that lack scalability.

E-operations take one step further the efforts of the recent past to eliminate mundane, repetitive tasks. The result is not just a saving in time and costs, but the freeing up of precious human resources to add more strategic value - for example finding new suppliers and negotiating better contracts, rather than typing out purchase orders.

Talk of e-operations may conjure up in image of a hugely complex, integrated web of IT systems, both inside and outside the organisation. While that certainly is one approach, attitudes are changing. Standards are rapidly being put in place to allow reliable communication to be swiftly and reliably achieved, even between two organisations that have never done business before.

When Company A urgently needs a part to fulfil an order, its systems can locate the part in Company B?s catalogue, determine price and availability, assess production capacity, provide a delivery date to the customer, order the part, receive the order acknowledgement, delivery note and invoice - and finally, make the payment. All this takes place automatically and electronically, even though it's the first time the two companies have made a trade.

Although they can be complex, e-operations solutions should be judged in the same way as any other investment. A business must first assess where its particular points of pain are - and where it needs to improve in order to compete with best practice in its industry - and then see what gains can be achieved by the application of supply chain management technology, using standard return on investment calculations. Oracle calculates that e-operations generally have saved it $1 billion in one year, so the potential is huge.