Challenges to these organizations show a strong correlation to slowness and retardation of diffusion, high speed boom, cyclical fluctuations and recession and declines. E-organizations that are transforming from traditional to e-business may face challenges arising from their initial stages of switching to e-platforms. These organizations must incorporate four aspects of the e-business model; profit and loss focus, ensure maximum contribution from internet use, align all their operations with aspects of the internet and lastly, ensure the provision and maintenance of a 24/7 electronic infrastructure. The other vital challenge relating to their transformation in to an e-organization concerns a seven-step redirection of approaches. The e-organization departs from a single entity due to the value chain disintegration, into a streamlined global entity consisting of network extensions, shared support services and business units focus. The change into an e-organization’s takes place along seven crucial aspects of organizations structure, knowhow, coherence, employees, alliances and legal issues (Applegate 2001).
On organizational challenges, many firms face the challenges of replacing their hierarchical structures into decentralization model that would allow response to opportunities by all members of the organization. There is also a change from the star CEO into a new environment where the organizations have leaders and disciples empowered to act. Departure from one man’s show into a situation that all are leaders is a challenge. E-organizations tend to be held hostage by its employees and the consumer, the openness also spells relinquishment of key organizational influence. E-organizations depend on the web platform tools that metamorphose into new shapes within short periods. Alliances are also an issue since e-organizations operate within a field of blurred boundaries, disappearing individual playing fields and emerging alliance. It is like transporting competing products in the same packages, these organizations must as such demonstrate critical skills, which are lacking, in many. Alliances must be strategic and well contemplated, as well (Gary et al 2000).
The burst of the dot.com bubble connotes that e-business strategy has no crafting in contemplation of pure and sustainable patterns, rather on cyclical rise and fall dependence. The challenges of existing e-businesses relate to inability to strengthen factors leading to success, failure to establish barriers to failure, declining ability to fight barriers to success and incapacity to alleviate failure factors. Many e-organizations fail to recognize that confronting barriers to failure demand a model that appreciates the landscape of the e-business market. This market cannot sustain barriers to failure on a model focusing on one critical factor of efficiency or effectiveness. The model’s failure, to be tailored in a way that acknowledges that multiple ‘co’ factors that are a requirement for sustaining barrier to failure creation, leads to the flop (Dailey 2009).
Research indicate that many e-organizations oscillate between existence level where they just break-even to exit where they are at the verge of leaving the market. Few attain excellence level of sustainable profitability, due to lack of enough barriers to failure. Robust strategies are acutely lacking in many e-organizations few of them diversify risks, employ slack resources in case of financial constraints or diversify competencies. There is also challenge by increasing barriers to success that they fail to reduce. Aspects of infrastructural gaps missing logistics aspects among others reduce the competitive advantage. The above factors are challenges to e-business arising from transformation or lapse of judgment in incorporating the right e-business aspects into the models (Amit & Zott 2001).