B2B Past, Present and Future

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Steve Keifer, GXS VP of Product and Industry Marketing, delivered this presentation at the 109th EDIFICE Plenary in Amsterdam in October 2009. A brief history of B2B e-Commerce trends over the past …

Steve Keifer, GXS VP of Product and Industry Marketing, delivered this presentation at the 109th EDIFICE Plenary in Amsterdam in October 2009. A brief history of B2B e-Commerce trends over the past 10 years and a look forward to potential opportunities in the next decade.

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  • 1. B2B P Past, P Present and F d Future EDIFICE 109th Plenary Amsterdam, Netherlands Amsterdam Steve Keifer – Vice President, Industry Marketing
  • 2. B2B Past, Present and Future A Brief History of the Past 10 Years… …A Look Ahead at the Next 10 Years Electronics & Electronics B2B Integration ICT Sectors Supply Chain Technologies October 31, 2009 | Slide 2
  • 3. Part Th Dot P t 1 -The D t Com Era October 31, 2009 | Slide 3
  • 4. Year 2000 Compliance • UK - 10,000 HSBC credit card swipe machines failed • Italy - Telecom Italia sent out bills with year of 1900 • Australia - Bus ticket validation machines failed • US - 150 slot machines at racetrack stopped pp • South Korea - summoned 170 people to court on date of 4 January, 1900 What Did Fail? www.bbc.co.uk Numerous web sites reported inaccurate dates October 31, 2009 | Slide 4
  • 5. Other Outcomes of Y2K €200 Bio was spent on technology upgrades in preparation for Y2K event • Disaster preparedness of government and financial sectors • Catalyst for the offshore outsourcing market in India & Asia • Modernization of business applications resulting in productivity gain • Surge in sales of computer equipment and software to businesses worldwide October 31, 2009 | Slide 5
  • 6. The Dot Com Era Over $5 Trillion in Market Value was lost in the Tech Sector • “Prefix” (e-) and “Suffix” (.com) Investing • Reliance on “Network Effects” to build Market Share • “Hockey Stick” Revenue Growth Models M d l • Alan Greenspan called it a period of “Irrational Exuberance” October 31, 2009 | Slide 6
  • 7. Post Dot Com – Tech Crunch • Double and triple ordering by distributors led to forecast inaccuracies by OEMs • Y2K Compliance and One One- Time Dot-Com Purchases created false demand patterns • Massive Telecom Investments in Capacity went unused (dark fiber) • Bankruptcies of WorldCom, Need for Demand Driven Global Crossing, XO Supply Networks using Multi- pp y g Communications Tier Visibility & VMI October 31, 2009 | Slide 7
  • 8. Rise of the B2B E-Marketplaces At the Peak of the Dot Com Era there were over 2500 B2B e-Marketplaces M k t l October 31, 2009 | Slide 8
  • 9. Fall of the B2B E-Marketplaces • Independent 1600 Marketplaces created by entrepreneurs and t d Numb of Online Marketplaces 1400 Venture Capitalists froze venture capitalists 1200 investments in April 2000 • Consortia Marketplaces 1000 – Joint Ventures of M Peak in B2B 800 market was Leading OEMs and February 2000 Suppliers 600 • Private Marketplaces - ber 400 formed b indi id al by individual 200 companies and their supply chains 0 93 94 95 96 97 98 99 00 01 02 03 04 • Electronics Exchanges - had high survival rate Continues to Ceased Exit by Merger due to focus on hard-to- Operate Operations & Acquisition find items and liquidation All 46% 23% 31% of excess inventories Electronics 67% 8% 25% Source: Shakeouts in Digital Markets: Lessons from B2B Exchanges - California Management Review Vol 45, No. 2 – Winter 2003 October 31, 2009 | Slide 9
  • 10. Key Exchange Functions Product Catalog C t l Collaborative Demand Planning g Buy Side E- Procurement Supplier Portals Sell Side Order Management Logistics Excess Inventory Management Liquidation Reverse Auctions October 31, 2009 | Slide 10
  • 11. Part P t2–I Innovation & Supply Chains ti S l Ch i October 31, 2009 | Slide 11
  • 12. Mobile Internet Adoption Forecast of Users 2008-2014 August 2009 “Western European Mobile Forecast, 2009 To 2014” October 31, 2009 | Slide 12
  • 13. Apple – Design & Innovation Source: http://www.apple.com/pr/library/2009/10/19results.html October 31, 2009 | Slide 13
  • 14. Behind Every Great Product… …Is a World Class Supply Chain Is World-Class See the Semiconductor Insights’ Apple iPhone Teardown -http://www.youtube.com/watch?v=mPhciMud0MM October 31, 2009 | Slide 14
  • 15. Growth of Outsourcing Original Design “Instead of company Manufacturer M f t to company Design Contract Manufacturer competition, we are now in an era of supply chain to l h i t Service Make supply chain competition.” OEM Third Party Logistics “The weakest link of the supply Freight Forwarder chain defines the Sell Move supply chain.” Distributors & Resellers Third Party Dr. Hau Lee - Stanford University Logistics October 31, 2009 | Slide 15
  • 16. Flextronics Services Printed Circuit Camera Power Enclosures Displays Boards Modules Supplies pp Provide design and manufacture or more components. Moving beyond just assembly. Assembly Aftermarket Design Procurement Logistics & Testing Service • Contract Design – • Forecasting & • Build-to-order • Supplier managed • Customer returns & T&M engineering Demand Planning • Configure-to-order inventory repair • Joint Development • Materials & • Just-in-time • Inbound freight • Refurbishment Manufacturing Components Manufacturing management • Recycling • Original Design & Purchasing • Defect analysis • Order fulfillment • Service parts Manufacturing • Expediting • Environmental and distribution logistics • Warehousing stress testing • Retail technical services i Data gathered from Flextronics 10-K SEC Filing – May 2009 October 31, 2009 | Slide 16
  • 17. Faster Response to Demand Finished Goods assembled at Source Finished Ocean Warehouse Retail Manufacturing Product Transport Finished Product Store Finished Product Inventory – Inflexible to Demand Changes Late Stage Configuration & Postponement Model Generic Ocean Late Stage Retail Manufacturing Product + Kit Transport Configuration Store Generic, Configurable Inventory – Flexible to Demand Changes October 31, 2009 | Slide 17
  • 18. Late Stage Configuration & Postponement p Kits Thousands of permutations of mobile phones can be Late stage product configuration on configured from a few hundred various SKUs standardized parts. based upon consumer demand Manufacturer Inventory Retailer Generic version of G i i f Generic version of G i i f product assemble product stored centrally in low-cost closer to point of manufacturing center consumption Local country documentation and retailer specific t il ifi Documentation & packaging Packaging October 31, 2009 | Slide 18
  • 19. Broadband Growth Household Penetration and Adoption by Country December 2007 “Western European Residential Broadband Forecast: 2008 To 2013” October 31, 2009 | Slide 19
  • 20. Finland’s Right to Broadband "Good telecommunications access have evolved from a luxury into a necessity." Ministry of Communications http://www.lvm.fi/web/en/news/view/920307 October 31, 2009 | Slide 20
  • 21. South Africa’s Challenge 80km Route Unlimited IT proved it was faster to transmit data via carrier pigeon (Winston) than through the local Internet Service Provider g http://www.reuters.com/article/newsOne/idUSTRE5885PM20090909 http://blogs.gxs.com/keifers/2009/10/new-carrier-pigeon-service-for-b2b-large-file-transfers.html October 31, 2009 | Slide 21
  • 22. B2B E-Commerce Technologies B2B Technologies October 31, 2009 | Slide 22
  • 23. Large File Transfer Challenge Telecommunications – Call Detail Records Health Care – Radiology Images Manufacturing – CAD/CAM Diagrams Retail – Point of Sale Transactions Logistics – S lli I i i Satellite Imagery Banking – International Trade Documents a g te at o a ade ocu e ts October 31, 2009 | Slide 23
  • 24. DilbertFiles.com • Large files up to 2GB from any web browser • True cloud service without any software installed • Plug-in for mail clients such Plug in as Outlook • Desktop application with checkpoint/restart • E-mail address to receive the link for the download • Secured through 128 bit SSL encryption • Replicated to at least two servers to prevent data loss http://www.dilbertfiles.com October 31, 2009 | Slide 24
  • 25. B2B Technology Evolution XML Internet Data Messaging M i Communications C i ti Synchronisation S h i ti Radio SWIFT Corporate Services Oriented Frequency ID Access Architecture October 31, 2009 | Slide 25
  • 26. EDI’s Darwinian Survival Instincts EDI is Dead… Long Live EDI. Source: Forrester Research - July 2007 “B2B Integration Trends: Message Formats” Charles Darwin (1809-1882) http://blogs.gxs.com/keifers/2008/05/edi-and-darwin-how-edi-survived-the-internet- bubble-and-the-rise-of-the-brics.html October 31, 2009 | Slide 26
  • 27. The Long Tail of B2B Standards http://blogs.gxs.com/keifers/2008/05/the-long-tail-of-b2b-standards.html October 31, 2009 | Slide 27
  • 28. Fiscal Dematerialisation Gartner predicts that by 2012, 20% of invoices in EU will be i i i ill b electronic Country Specific Up to 80% savings Regulations Reg lations through conversion th h i to e-invoicing from Digital Signatures paper Content – Mandatory Fields Paper invoice costs P i i t Archival Period €30 to process Human Readable Format Opens up new Audit Trail market opportunities such as Supply Chain Finance Source: Gartner - Cost Savings Finally make European E-Invoicing Steamroller Pick Up Speed October 31, 2009 | Slide 28
  • 29. European Union Expansion Citizens and businesses can conduct business and perform financial transactions anywhere in the European Union as easily, safely and efficiently as they can within y y their own countries – Currency - Adopt a common currency (Euro) and monetary system – Accounting - Common financial reporting standards for all corporations – Invoicing - Harmonize electronic invoicing standards across EU – Capital Markets – Harmonize securities settlement systems across EU – Payments – Harmonize payment technologies and systems across EU October 31, 2009 | Slide 29
  • 30. Single European Payments Area Low Volume, High Value Payments High Volume, Low Value Payments October 31, 2009 | Slide 30
  • 31. ISO 20022 XML (UNIFI) About ISO 20022 XML – Universal Financial Industry Messaging Scheme – Joint initiative between OAGi, TWIST, RosettaNet and IFX – Designed for Payments Foreign Payments, Exchange, Trade, Securities and Invoicing Adoption of ISO 20022 – Foundation for SEPA messaging (TARGET2) – SWIFT MX message class – Oracle and SAP banking interface packages – Corporates – Sun Microsystems, Merck, IKEA, Alcatel, Shell More information at http://blogs.gxs.com/keifers/2007/12/02/iso- 20022-in-search-of%e2%80%a6payments-harmony/ October 31, 2009 | Slide 31
  • 32. End of the World Decade W ld D d October 31, 2009 | Slide 32
  • 33. Collapse of the Financial Markets October 31, 2009 | Slide 33
  • 34. M&A, Divestitures, Bankruptcies Bankruptcies Joint Ventures Reorganizations & Spinoffs & Bankruptcies 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Merger Merger Vertical Wave Wave Integration October 31, 2009 | Slide 34
  • 35. The Rise of Google 50% of all Search Engine Activity 5% of Worldwide Advertising Spend 1 P t b t of user- Petabyte f generated data per hour Leader in Cloud Computing & SaaS October 31, 2009 | Slide 35
  • 36. Cloud Computing – Infrastructure delivered as a Service – Commoditized and standardized hardware and software platform – Ability to quickly move, change, add and delete applications – Massive scalability both upwards and d d d downwards d with same economics – Pay by consumption units (e.g. gigabytes, CPU cycles) – No upfront implementation fees or long term contracts October 31, 2009 | Slide 36
  • 37. Cloud Platform • Easy to Use • Fast • Elastic • Highly Available • Pay by the Drink October 31, 2009 | Slide 37
  • 38. Amazon.com e-Book Reader Inside of Amazon’s Kindle Reader October 31, 2009 | Slide 38
  • 39. Continued e-Commerce Growth Western Europe Forecasted 2008-2014 p March 2009 “Western European Online Retail And Travel Forecast, 2008 To 2014” October 31, 2009 | Slide 39
  • 40. Online Shopping for Electronics Only 6% of shoppers purchase Computers or Electronics El t i Online 70% of shoppers research online before buying in store October 31, 2009 | Slide 40
  • 41. Demand Forecasting with Web 2.0 Traditional Demand Signals Downstream Recent Inventory New Product Competitor Forecasts Sales (POS) Positions Launches Activity Production Demand Signal Forecast Repository Search Engine Pre-Order Personal Gift Ratings & Activity Requests Wish List Registry Reviews Localize Time Based Time Based Demand Demand Demand Web-Based Demand Signals October 31, 2009 | Slide 41
  • 42. Google Flu Trends Intense High Predict & Prevent – “Digital detection: supporting technology Moderate and efforts to detect early online Low 'signals' of emerging threats” Minimal http://www.google.org/flutrends/ October 31, 2009 | Slide 42
  • 43. Web 2.0 and Social Media October 31, 2009 | Slide 43
  • 44. What is a Mashup? Web applications or Web widgets that users create without coding to combine multiple data sources. Source http://marinetraffic.com/ais/ October 31, 2009 | Slide 44
  • 45. Inventory Visibility Mashup Brazil Inventory Forecast – November 2009 October 31, 2009 | Slide 45
  • 46. Supplier Performance Mashup Fast Semiconductor Supplier Fill Rate On Time Delivery Data Accuracy Environmental Defects October 31, 2009 | Slide 46
  • 47. Crowd Sourcing “Crowdsourcing” is a distributed problem-solving and production model. Problems broadcast to unknown group of solvers in form of an open call. October 31, 2009 | Slide 47
  • 48. Guardian leverages Crowds Engaged 20,000 readers to analyze 700,000 documents for expense discrepancies from UK Parliament members Source: http://platform.idiomag.com/2009/06/crowdsourcing-news-the-guardian-and-mp-expenses October 31, 2009 | Slide 48
  • 49. Real Examples in High Tech Cisco’s I-Prize Dell’s IdeaStorm $250K prize awarded to team Consumers vote on ideas for with best emerging technology g g gy enhancements to Dell’s PC and concept using Cisco’s products peripherals product line http://www.ideastorm.com/ http://newsroom.cisco.com/dlls/2008/prod_101408b.html October 31, 2009 | Slide 49
  • 50. B2B & Social Networking Social Networks for Businesses in the Supply Chain October 31, 2009 | Slide 50
  • 51. Linked In for the Supply Chain Master Data for Suppliers Corporate level data – products supplied, contact d il li d details Individual person data - contact, photo, skills, roles & responsibilities Change Management Routing Guides New Stores & Distribution Centers Pallet Labeling Floor Ready Merchandising B2B e-Commerce Program On-Boarding On Boarding for B2B e-Commerce e Commerce Readiness Survey On-Line Training Connectivity Option Selected Testing with Sample Data Live Transactions October 31, 2009 | Slide 51
  • 52. US Vendor Compliance Federation Retailers have as many as 150 b i business rules l Supplier compliance guides are updated 10- 10 12 times per year Updates posted to supplier portals or distributed via e-mail Deductions assessed and scorecards used to measure performance October 31, 2009 | Slide 52
  • 53. GCI’s Future Value Chain 2016 www.gci-net.org/gci/.../2016_Future_Value_Chain_GCI_Report-06-11-01-ohne.pdf October 31, 2009 | Slide 53
  • 54. Let’s Discuss What is the Vision for the Electronics Future Value Chain 2020? October 31, 2009 | Slide 54
  • 55. Questions Steve Keifer VP Industry Marketing Work +1.301.340.4000 E-Mail: steve.keifer@gxs.com North America | gxs.com EMEA | gxs.eu ASPAC | gxs.asia.com October 31, 2009 | Slide 55