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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B2B Past, Present and Future
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
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
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
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
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