Rethinking the Internet 1.   The Web In Perspective - Cuts Interaction Costs 2.  Where is the Value for “Brick-and-Mortar”...
Technology In Perspective Pre-1980 :   Mainframes, Minicomputers   - Expensive, Remote 1980s :     PCs   - Desk-top comput...
<ul><li>Power of the Web </li></ul><ul><ul><ul><li>- CUTS THE COST OF INTERACTION </li></ul></ul></ul><ul><li>Communicatio...
<ul><li>Going Back to the 1930s </li></ul><ul><li>Ronald Coase’s Theory of “Transaction Costs” </li></ul><ul><li>When a co...
Three Kinds of Transaction Costs <ul><li>Search Costs </li></ul><ul><ul><li>Locate reliable and trustworthy suppliers </li...
Today . . . . . Transaction Costs Are Crashing Virtual   Integration - Unbundle functions to Customers,   Suppliers & Part...
The Net Has NOT Affected Coase’s Law <ul><li>Coase’s Law holds that a firm should  expand  until the cost of performing a ...
<ul><li>Juniper Networks. . .   </li></ul><ul><li>35% market share in 3 years </li></ul><ul><li>Core competencies : </li><...
<ul><li>Big Blue Gets Wired . . . .   </li></ul><ul><li>....IBM Saved $1 Billion in 1999 </li></ul><ul><li>On-line Procure...
IBM Getting Smarter Too ...... IBM has a contract with supplier, ABC Corp., for PC motherboards. IBM asks ABC to zap a lis...
Herman Miller’s Move to the Web  <ul><li>Traditional business: Build-to-order office furniture </li></ul><ul><ul><li>Secon...
The SQA Division was founded in 1995 “ Simple, Quick, Affordable” Office Furniture  - New Market : Smaller Companies (5-15...
IT is the Key to SQA - Getting Orders - Special 3D design software for the laptop for use by 1,200 salespeople - Customer ...
<ul><li>IT is the Key to SQA </li></ul><ul><li>- Manufacturing </li></ul><ul><li>Software for production scheduling </li><...
<ul><li>IT is the Key to SQA </li></ul><ul><li>- Procurement </li></ul><ul><li>500 suppliers have Web access to SQA’s orde...
The Web Impacted Herman Miller’s  Big Customers Too! <ul><li>Built a customized website for each of its big accounts </li>...
Customer Self-Service - A “MUST-DO” Extranet Application 1. On-line Ordering - Product Configurator to get order right and...
<ul><li>Cisco Connection Online : for 24 X 7 technical support to customers </li></ul><ul><ul><li>Customers answer questio...
  Benefits of Customer Self-service <ul><li>Lowers cost of doing business for customers and, of course, Cisco. </li></ul><...
Cisco Connection Online (CCO) Real-time Online Support & Information Service <ul><li>Launched in June 1996 </li></ul><ul><...
U.S. Income Tax Dept.  Has Adopted Customer Self-Service - A Telling Headline…. <ul><li>PeopleSoft sells CRM software to a...
The Benefits…. <ul><li>1.  Moving data access online will reduce costs by pushing more customer enquiries to the Web inste...
<ul><li>Moving Human Resources On-Line </li></ul><ul><li>Employee Self-Service through Intranet </li></ul><ul><li>- Compan...
<ul><li>Smaller Companies Can Also Reap Benefits  </li></ul><ul><li>BEFORE : Only 2 Options:  Build or Buy   </li></ul><ul...
Savings  from  HR  Self-Service - Not  Just  Cost  But  Also  Time 1.  HEWLETT-PACKARD - Put HR Policies on Web - Cost to ...
Cisco: Hiring  Online <ul><li>85% of aspirants apply online </li></ul><ul><li>A series of pull-down menus for employment a...
Cisco: E-Learning -  Cisco’s online sales : 75% to retailers or  “ channel partners”; 25% direct to huge, sophisticated co...
Knowledge Management - Stealth Learning at Dell We try to put knowledge on the critical path of people’s work….. In manufa...
Know Your Customers Better -  P&G Uses Web for Faster, Low-Cost Consumer Research <ul><li>Internet Surveys vs Personal Int...
Dedicated Websites for Test-Marketing <ul><ul><li>Example: Crest Whitestrips home tooth-bleaching kit - used TV and print ...
The Net Enables Personalization -  Build-To-Order vs. Build-To-Forecast Every Dell system is built to order.  Customers ge...
Example: Clothing - Land’s End (Catalog Store) <ul><li>Started selling custom-made pants on its Web site in 2001 </li></ul...
Dell  Online <ul><li>1996 - Expanded  the Direct Sales Model to the Net  </li></ul><ul><ul><li>Enables us to be even more ...
<ul><li>Dell Portal, Dellnet.com :   </li></ul><ul><li>Bundles Web services with sale of PCs  </li></ul><ul><li>“ Breakfas...
Personalization  on  the  Net <ul><li>“ My Dell” Web pages  </li></ul><ul><li>For small business and home-office customers...
Schwab’s  Fourth  Channel   for  Customer  Contact  :  E-mail <ul><li>Existing Channels:  Branch Offices, Telephone, Websi...
Three  Categories  of  Outgoing  E-mails 1.  Microcast Customized e-mails to 500,000 people e.g., “Full Closing Bell” serv...
Three  Categories  of  Outgoing  E-mails 2.  Narrowcast 1.2 M Customers have signed up to receive these e-mails e.g.,  A c...
Three  Categories  of  Outgoing  E-mails 3.  Broadcast All Schwab customers can potentially get them e.g., General interes...
New  Economy  Meets    An  Old  Industry <ul><li>Agriculture is changing dramatically  using IT, including the Net </li></...
IT on the Farm   - Wireless Cow-Tracking <ul><li>…  Yields “Cow-Health Profiles” </li></ul><ul><li>Everyone of Mike Pank’s...
IT on the Farm   - Wireless Cow-Tracking <ul><li>Data from the transmitter sent to Pank’s office PC system </li></ul><ul><...
IT on the Farm   -  Other Value-Add Applications <ul><li>E-Procurement   -  Pank uses Net Exchange, Farmbid.com, to procur...
Agribusiness  Value  Chain <ul><li>Suppliers: </li></ul><ul><ul><li>Manufacturers of seed, fertilizer, equipment </li></ul...
The New Moo Thing... <ul><li>Net Compresses the Value Chain   </li></ul><ul><li>…  Reduces Costs   - Eliminates the dealer...
Several  Players … Grabbing  “Farm-share” <ul><li>Web sites combining: </li></ul><ul><ul><li>Ecommerce, Content, Community...
A  New  Player : XSAg.com <ul><li>Partner with @griculture.com - A farming content site produced by the publishers of  Suc...
Old Guard is Changing ! <ul><li>Three major suppliers (Cenex Cooperative, Cargill, DuPont) formed Rooster.com  </li></ul><...
Farming with Precision <ul><li>Use wireless and satellite technologies …   … wireless solar moisture sensors to enable far...
What’s  the  Net’s  Value <ul><li>On-line Exchanges provide greater selections, eliminate middlemen and pass savings to co...
Creating e-Communities (like eBay) - To Foster Customer Loyalty <ul><li>King Arthur Flour  (Norwich, Vermont) </li></ul><u...
King Arthur Flour’s USP <ul><li>King Arthur Brand – Over 100 Years Old </li></ul><ul><li>…  More a marketer than a miller ...
How King Arthur Flour Taps Into the Community of Bakers <ul><li>1980s:   Launched a catalog to satisfy the demand of New E...
More Value-Add for Customers <ul><li>Online Baking Classes   –  basically a recipe accompanied by pictures and detailed in...
Value of the e-Community <ul><li>The Baking Circle:   A resource-efficient way to reinforce company’s ties with current an...
Wireless CRM - Vendors Add Portable Options <ul><li>Siebel 7 Mobile, rolled out in March 2002, is accessible through virtu...
  Case Example:   Foremost Insurance Co. <ul><li>Replaced 1,000–page, monthly batch reports sent overnight   from headquar...
Early Results …  <ul><li>Before:   Salespeople spent hours sorting through bulky paper  </li></ul><ul><li>reports just to ...
Speech Recognition Becoming  An Important Interface -  “Just Talk To Me” <ul><li>Already, a not-uncommon feature at the ca...
Impact on Call Centers <ul><li>80,000 centers in the U.S. dealing with customers’  requests; Annual Expense - $ 90 billion...
Schwab: A Pioneer  in Using Speech Systems <ul><li>1996:   First system introduced for retail booking </li></ul><ul><li>  ...
Many Other Opportunities … <ul><li>…  Voice-activated dialing </li></ul><ul><ul><li>Customers dial the main switch board: ...
Web Services - Hailed as “The Future of Computing” <ul><li>Simple Definition : </li></ul><ul><li>Use of  Internet-based   ...
Integration Made Easy! Example: Dollar Rent A Car <ul><li>Built a system in just a month to let travelers book car reserva...
How Web Services Works <ul><li>1.  Dollar publishes instructions using WSDL (Web Services Description Language) so other “...
The Alphabet Soup  of Web Services <ul><li>WSDL  -  A set of computerized instructions that describe what a Web services a...
Impact of Web Services <ul><li>1.  Much cheaper and easier to integrate systems  internally  by providing a common languag...
A Real-World Flavor of Web Services in a CRM Case Example: Putnam Lovell   Securities Putnam research analysts write their...
The  Benefit ... Before: Salespeople contacted Putman’s Publications dept. to mail research report  to a client Publicatio...
CRM Vendors Embrace Web Services -  Spate of Announcements in 2002 <ul><li>“ Siebel Looks to Web Services for CRM Ties” (A...
Most Profound Impact of Web Services - Business Process Changes <ul><li>10 years ago:  If you were a good customer, FedEx ...
Boston Area Web Services Roundtable * - Highlights Hurdles <ul><li>Security Concerns </li></ul><ul><li>Interoperability st...
The  New  Business  Lens...
The  New  Business  Lens...
Future of E-Commerce  -  According to Gartner Group in Early 2000 <ul><li>Currently  - at peak with inflated expectations ...
The  End  of  “E-Business”?
Is E-Business Finally  Living Up To Its Hype? Source: 2003 E-Business Survey of 512 companies published by  CIO Insight 60...
Evolution of E-Business Phase I  :   “Brochure ware” Phase II  :   Online Transactions & Order Status Tracking Phase III :...
How Can E-B Provide  A Competitive Advantage? <ul><li>SPEED </li></ul><ul><li>“ Time is the biggest leverage point today w...
How Can E-B Provide  A Competitive Advantage? 3. CUSTOMERS “ Customer self-service is really on the top of every company’s...
In Conclusion ... We are in the middle of a 20-year march. We are just halfway there in terms of realizing the full potent...
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Rethinking The Net

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Web bases strategies - A presentation from Dr. Lakshmi Mohan's class

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  • The integration of new mediums on the web properly is making great strides in leveling the playing field of the web but there’s still much to be said for the power of the almighty advertising dollar.

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  • Rethinking The Net

    1. 1. Rethinking the Internet 1. The Web In Perspective - Cuts Interaction Costs 2. Where is the Value for “Brick-and-Mortar” Companies? - IBM, Herman Miller 3. High-Value Applications - Customer Self-Service: Cisco, U. S. Govt. – Income Tax Dept. - Human Resources On-line: Cisco, Dell - Know Your Customers Better: P&G 4. Customised Products: Land’s END, Dell 5. Customer Contact Through E-mail: Schwab 6. The “Moo-Economy”: Impact on Agriculture 7. Create E-Communities: King Arthur Flour Case example 8. Trends to Watch: - Wireless CRM - Speech Recognition - Web Services 9. The “New” Business Lens
    2. 2. Technology In Perspective Pre-1980 : Mainframes, Minicomputers - Expensive, Remote 1980s : PCs - Desk-top computing at an affordable price 1990s : Internet, World Wide Web - ”Any-to-any” connectivity at a low cost Post-Web : Wireless Net, Peer-to-Peer
    3. 3. <ul><li>Power of the Web </li></ul><ul><ul><ul><li>- CUTS THE COST OF INTERACTION </li></ul></ul></ul><ul><li>Communication </li></ul><ul><li>Coordination </li></ul><ul><li>Collaboration </li></ul><ul><li>Can connect previously unconnected processes </li></ul><ul><li>- Internally : Employees </li></ul><ul><li>Externally : Customers </li></ul><ul><ul><ul><li>Suppliers </li></ul></ul></ul><ul><ul><ul><li>Partners </li></ul></ul></ul><ul><li>Community </li></ul>
    4. 4. <ul><li>Going Back to the 1930s </li></ul><ul><li>Ronald Coase’s Theory of “Transaction Costs” </li></ul><ul><li>When a company tries to determine whether to “build or buy”, market prices are not the sole factor. There are significant transaction costs in dealing with outside suppliers, including the search for the right suppiers and negotiating the contract. </li></ul><ul><li>High Transaction Costs </li></ul><ul><li>Vertical Integration </li></ul><ul><li>- Bundling of diverse activities into a single company </li></ul>
    5. 5. Three Kinds of Transaction Costs <ul><li>Search Costs </li></ul><ul><ul><li>Locate reliable and trustworthy suppliers </li></ul></ul><ul><ul><li>At one time, Ford even owned its own rubber plantation to ensure its assembly line never ran out of tires! </li></ul></ul><ul><li>Contracting Costs </li></ul><ul><ul><li>Include lawyers’ fees, time spent on negotiations and other costs of contracting any sizable work </li></ul></ul><ul><ul><li>Henry Ford did not want to haggle with barge operators and their lawyers every time they needed to ship a load of steel over the Great Lakes. So he operated his own fleet of barges. </li></ul></ul><ul><li>Coordination Costs </li></ul><ul><ul><li>Time and effort to bring together supplies, labor, and so on </li></ul></ul><ul><ul><li>Would entail a lot of time on the telephone, at a time when telephone service was still rudimentary, checking on orders and delivery dates </li></ul></ul><ul><ul><li>Much better for Ford & GM simply to issue orders to glass and axle factories they owned </li></ul></ul>
    6. 6. Today . . . . . Transaction Costs Are Crashing Virtual Integration - Unbundle functions to Customers, Suppliers & Partners “ It enables you to have more specialization... You will get more small firms as a result, but large firms will get larger, because they can concentrate on core activities.” - Ronald Coase in a telephone interview to “The New York Times”, October 2000.
    7. 7. The Net Has NOT Affected Coase’s Law <ul><li>Coase’s Law holds that a firm should expand until the cost of performing a transaction inside the firm exceeds the cost of performing the transaction outside the firm </li></ul><ul><li>The law is still valid! </li></ul><ul><li>But the Internet has caused transaction costs to plunge so steeply that it is much more useful to read Coase’s law in effect, backwards : </li></ul><ul><li>Firms should shrink until the cost of performing a transaction no longer exceeds the cost of performing it externally. </li></ul>
    8. 8. <ul><li>Juniper Networks. . . </li></ul><ul><li>35% market share in 3 years </li></ul><ul><li>Core competencies : </li></ul><ul><li>Design of high-end Internet routers </li></ul><ul><li>Outsources 100% of production </li></ul><ul><li> orders orders </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> Delivery </li></ul><ul><li>Revenue: $3.8 M in 1998 </li></ul><ul><li> $673 M in 2000 </li></ul><ul><li>Revenue / Employee : $726,000 </li></ul><ul><li>vs Nortel Networks : $320,600 </li></ul>Supplier Juniper Web Portal Customer
    9. 9. <ul><li>Big Blue Gets Wired . . . . </li></ul><ul><li>....IBM Saved $1 Billion in 1999 </li></ul><ul><li>On-line Procurement : $13 Billion </li></ul><ul><li>Eliminated 5 Million pieces of paper </li></ul><ul><li>Time for approvals : 2 hours vs 30 days </li></ul><ul><li>Cost savings : $250 Million </li></ul><ul><li> Automated Customer Service </li></ul><ul><li>- Handled 43 Million online calls </li></ul><ul><li>- Saved $750 Million </li></ul>
    10. 10. IBM Getting Smarter Too ...... IBM has a contract with supplier, ABC Corp., for PC motherboards. IBM asks ABC to zap a list of all the chips that go into that product along with names of ABC’s suppliers and the prices ABC pays them. IBM has wired 12,000 such Tier II suppliers (suppliers of IBM’s suppliers) to IBM’s network. All the information from these Tier II suppliers is stored in a data warehouse along with IBM’s own information on what IBM pays for every chip or part that IBM uses to make other products. Using data-mining software, if IBM finds that it uses the same chip X as ABC but pays less to the Tier II supplier of chip X, it will approach that supplier to demand that ABC get the same price as IBM. ABC has to then pass the savings to IBM since IBM got the Tier II supplier to reduce the price for ABC.
    11. 11. Herman Miller’s Move to the Web <ul><li>Traditional business: Build-to-order office furniture </li></ul><ul><ul><li>Second largest manufacturer of office furniture </li></ul></ul><ul><ul><li>Customer had to wait 2 – 3 months for furniture to arrive </li></ul></ul><ul><li>Started a sideline business </li></ul><ul><ul><li>Buying back used furniture from big customers </li></ul></ul><ul><ul><li>Reconditioning the furniture and selling it to smaller companies </li></ul></ul><ul><li>Reconditioned furniture was sold in the form of complete </li></ul><ul><li>systems: </li></ul><ul><ul><li>- It was cheaper </li></ul></ul><ul><ul><li>It was easier to order </li></ul></ul><ul><ul><li>It arrived much sooner </li></ul></ul><ul><li>Sales soared </li></ul><ul><ul><li>Showed the high value customers placed on speed and convenience </li></ul></ul>
    12. 12. The SQA Division was founded in 1995 “ Simple, Quick, Affordable” Office Furniture - New Market : Smaller Companies (5-150 employees) IT made it happen . . . . - Cut Costs Inventory Turns: 40 vs <20 for industry Order Entry Errors : Nil vs >20% - Cut faulty shipments - Fast Turnaround Design : 2 hours vs weeks/months Delivery : 3 days-2 weeks vs 6-8 weeks - 99% on-time SQA is now a blueprint for improving efficiency in the main company Total IT Investment : $500 Million in 5 years
    13. 13. IT is the Key to SQA - Getting Orders - Special 3D design software for the laptop for use by 1,200 salespeople - Customer can select styles, colors, configurations - Each variant can be seen in 3D - Software also give the prices - Salesperson transmits customer’s order via the Web to factory
    14. 14. <ul><li>IT is the Key to SQA </li></ul><ul><li>- Manufacturing </li></ul><ul><li>Software for production scheduling </li></ul><ul><li>reserves time and day of production and </li></ul><ul><li>space on delivery truck </li></ul><ul><li>Customer gets email confirmation of </li></ul><ul><li>delivery date within 2 hours of placing </li></ul><ul><li>order </li></ul><ul><li>Local dealer get e-mail notice to </li></ul><ul><li>schedule a crew to install order </li></ul>
    15. 15. <ul><li>IT is the Key to SQA </li></ul><ul><li>- Procurement </li></ul><ul><li>500 suppliers have Web access to SQA’s ordering </li></ul><ul><li>system </li></ul><ul><li>Supplier can check factory’s needs weeks in </li></ul><ul><li>advance and plan production to replenish SQA’s stocks when they drop below agreed level </li></ul><ul><li>- Supplier rated on punctuality of deliveries </li></ul><ul><li>and quality of goods </li></ul>
    16. 16. The Web Impacted Herman Miller’s Big Customers Too! <ul><li>Built a customized website for each of its big accounts </li></ul><ul><li>Website reflects the customer’s specific business practices, pricing schedules and product preference </li></ul><ul><li>Site sells product lines that, like the SQA line, represent simplified versions of its broader product offerings </li></ul><ul><li>Concept is akin to Dell’s Premier Pages for its corporate and </li></ul><ul><li>government customers </li></ul><ul><li>Personalized “extranets” exist securely within the customer’s firewalls </li></ul><ul><li>An interactive catalog of all the configurations authorized by the customer and the specific prices negotiated with Dell </li></ul><ul><li>Employees can then price and order the PC they want </li></ul><ul><li>Eliminates the paperwork and sales time for corporate purchases </li></ul>
    17. 17. Customer Self-Service - A “MUST-DO” Extranet Application 1. On-line Ordering - Product Configurator to get order right and price options - Check status of pending orders - Update service contracts 2. 24x7 After-Sales Support - Get answers to questions - Diagnose problems and provide expert solutions
    18. 18. <ul><li>Cisco Connection Online : for 24 X 7 technical support to customers </li></ul><ul><ul><li>Customers answer questions to describe their problems </li></ul></ul><ul><ul><li>Expert system diagnoses underlying network problems from information provided and provides expert solutions </li></ul></ul><ul><ul><li>Customers find answers for over 80% of their questions </li></ul></ul><ul><ul><li>150,000 active registered users worldwide </li></ul></ul><ul><ul><li>50 different country versions of select pages for international customers </li></ul></ul><ul><ul><li>Accessed by customers 1.5 million times each month </li></ul></ul>Customer Self-service: Cisco
    19. 19. Benefits of Customer Self-service <ul><li>Lowers cost of doing business for customers and, of course, Cisco. </li></ul><ul><ul><li>$150 M annual savings in ‘98; $650 M in 2000 </li></ul></ul><ul><ul><li>1,000 engineers re-allocated to R&D </li></ul></ul><ul><ul><li>R&D spend boosted to 12% of sales from 9% in 1997 </li></ul></ul>
    20. 20. Cisco Connection Online (CCO) Real-time Online Support & Information Service <ul><li>Launched in June 1996 </li></ul><ul><ul><li>Realized it could not hire enough qualified engineers to support growing customer base </li></ul></ul><ul><ul><li>Strategy : Empower customers and give them Web access to the information they need. </li></ul></ul><ul><li>Interactive user applications : </li></ul><ul><ul><li>Open Forum, a powerful search engine for Cisco’s Q&A database </li></ul></ul><ul><ul><li>Technical Assistance (Case Open, Case Query, Case Update) </li></ul></ul><ul><ul><li>Bug Navigator: Finds known bugs in Cisco’s software </li></ul></ul><ul><ul><li>Bug Alert : Proactively advises customers of known bugs & fixes </li></ul></ul>
    21. 21. U.S. Income Tax Dept. Has Adopted Customer Self-Service - A Telling Headline…. <ul><li>PeopleSoft sells CRM software to a friendlier IRS </li></ul><ul><li>The deal, valued at more than $10 million, will provide the Internal Revenue Service with the full PeopleSoft 8 CRM suite to make it easier for taxpayers, professional tax preparers and the IRS itself to obtain tax records and other information online around the clock. </li></ul><ul><li>The package will enable the agency to create separate tax data Web portals for taxpayers and professional preparers as well as build a private portal for IRS employees. </li></ul><ul><li>The first phase of the deployment will begin in summer 2002, with full implementation expected by 2004. </li></ul><ul><li>( Computerworld, August 23, 2001) </li></ul>
    22. 22. The Benefits…. <ul><li>1. Moving data access online will reduce costs by pushing more customer enquiries to the Web instead of costly telephone interactions with live agents and call centers - Get customers out of the call centers and into self-service </li></ul><ul><li>2. The decision to use CRM software is part of the agency’s desire to modernize and become more customer-friendly. It will enable customers to access the information they want when they need it. </li></ul><ul><li>I do find it humorous to hear ‘IRS’ and ‘CRM’ in the same sentence together. I think it’s important that the government is realizing that it may have a monopoly but it can’t get away with acting like one. </li></ul>
    23. 23. <ul><li>Moving Human Resources On-Line </li></ul><ul><li>Employee Self-Service through Intranet </li></ul><ul><li>- Company Policies and Procedures Manual </li></ul><ul><li>- “My Information” Website ...updated by employees </li></ul><ul><li>- Information about Health Insurance and Retirement Benefits </li></ul><ul><li>- Travel Planning & Expenses Reporting </li></ul><ul><li>- Distance-learning modules activated at desktop </li></ul><ul><li>- Company-tailored version of “My Yahoo!” to push information of </li></ul><ul><li>interest </li></ul><ul><li>Web gets HR staff out of the routine administrative tasks into more important strategic tasks such as designing a better package of benefits, succession planning and better recruiting . </li></ul>
    24. 24. <ul><li>Smaller Companies Can Also Reap Benefits </li></ul><ul><li>BEFORE : Only 2 Options: Build or Buy </li></ul><ul><li>- HR software (Peoplesoft, etc.) expensive </li></ul><ul><li>TODAY : Outsource to Web Service Provider </li></ul><ul><li>Employease Inc. : A 5-year-old Atlanta Company </li></ul><ul><li>- Manages HR programs for clients via the Web </li></ul><ul><li>- Monthly Charge : $5-$6 per-employee </li></ul><ul><li>Employer needs only a modem to access their HR files </li></ul><ul><li>HR Outsourcing Market : $10.2B by 2003 </li></ul><ul><li>Share of Net-based Companies : Over 15% </li></ul>
    25. 25. Savings from HR Self-Service - Not Just Cost But Also Time 1. HEWLETT-PACKARD - Put HR Policies on Web - Cost to print, shrink-wrap, package and ship 600-page volume to 14,000 managers in U.S. - $130,000 - Today : 100,000 global employees; Cost - $200 2. SUN Microsystems – Expense Reporting - 27,000 employees submit 150,000 reports a year - $25 cost to process each report - Saved $3.6 million from Web application - Time: 5 days before vs. 2 days now to get reimbursed
    26. 26. Cisco: Hiring Online <ul><li>85% of aspirants apply online </li></ul><ul><li>A series of pull-down menus for employment and educational </li></ul><ul><li>data instead of asking applicants to fill in blanks. </li></ul><ul><li>Based on their selection, applicants asked a series of questions </li></ul><ul><li>Saves time : </li></ul><ul><li>Applicants : To write and submit a resume </li></ul><ul><li>VP for HR : Easier to review resumes - “Where would we put </li></ul><ul><li>25,000 paper applications each month, much less read and </li></ul><ul><li>sort them ?” </li></ul><ul><li>Can also mine the resumes for interesting nuggets </li></ul><ul><li>Routinely analyze e-mail addresses and current employers </li></ul><ul><li>of applicants, as possible indicators of rivals’ troubles </li></ul><ul><li>Save hundreds of millions of dollars in recruiting expenses </li></ul>
    27. 27. Cisco: E-Learning - Cisco’s online sales : 75% to retailers or “ channel partners”; 25% direct to huge, sophisticated consumers - Objective : Faster learning at reduced cost Increased access to learning Keep up with change that occurs on Internet time - Cisco Interactive Mentor (CIM) offers an interactive learning approach through : Self-paced CD-ROM products Support and shared resources in a Knowledge Community site Technical competency in networks is increasingly critical to a corporation’s success. CIM helps our customers and partners quickly build and refresh their networking knowledge base to optimize performance and maximize availability from their network
    28. 28. Knowledge Management - Stealth Learning at Dell We try to put knowledge on the critical path of people’s work….. In manufacturing, during a quality assessment for example, people can call up a tool to do a Pareto chart on-line. They don’t think they are going to school on quality. They just do it as they need for their work. It doesn't feel like training, but it is. That’s why we call it “Stealth Learning”………… … .We talk about the micro-bite, a chunk of knowledge about 5 minutes long, which we think is an ideal chunk to deliver………. … .. Give people what they need to know to do the work; learning embedded into the actual task ……. … .. No longer meaningful to measure hours of training given by HR or taken by the employee. - John Cone, VP of Dell Learning
    29. 29. Know Your Customers Better - P&G Uses Web for Faster, Low-Cost Consumer Research <ul><li>Internet Surveys vs Personal Interviews </li></ul><ul><ul><li>Time: 10 days vs 3 – 4 weeks </li></ul></ul><ul><ul><li>Cost: $ 10,000 vs $ 50,000 </li></ul></ul><ul><li> PLUS Benefits of anonymity to facilitate sharing of sensitive personal information </li></ul><ul><li>Testing Consumer Interest for New Products </li></ul><ul><ul><li>www.pg.com site transformed into a virtual laboratory for displaying new products which visitors can buy – e.g., VS Sassoon brand “molding clay” which promises to “create matte, earthy hair styles with moderate hold.” </li></ul></ul>
    30. 30. Dedicated Websites for Test-Marketing <ul><ul><li>Example: Crest Whitestrips home tooth-bleaching kit - used TV and print ad campaign to get customers to the site; tracked purchases; - found 80% were women, 35 – 54 years old; - tailored advertising campaign accordingly </li></ul></ul>$ 150 M Consumer Research Budget 1999 (1st year): 20% for online research; 2000: 40%; 2001: 50%
    31. 31. The Net Enables Personalization - Build-To-Order vs. Build-To-Forecast Every Dell system is built to order. Customers get exactly, and only , what they want <ul><li>Factory inventory levels : 3 days </li></ul><ul><li>Finished good inventory: Near zero </li></ul>
    32. 32. Example: Clothing - Land’s End (Catalog Store) <ul><li>Started selling custom-made pants on its Web site in 2001 </li></ul><ul><li>Customers enter measurements on weight, height, hip size …. </li></ul><ul><li>Mix and match fabrics, styles and colors </li></ul><ul><li>Value-Add to customer: More Choices; Perfect Fit </li></ul><ul><li>Software calculates the pant dimensions </li></ul><ul><li>Information sent to manufacturing plant in Mexico </li></ul><ul><li>Custom-tailored pants cost $54 vs. $30-40 for catalog pants </li></ul><ul><li>Delivery in 3 weeks vs. one week from Web site </li></ul><ul><li>40% of jean and chino sales on Web site are custom orders - despite no advertising ! </li></ul><ul><li>Expanded to selling custom-made men’s dress shirts and dress pants online in Nov. 2002 </li></ul>
    33. 33. Dell Online <ul><li>1996 - Expanded the Direct Sales Model to the Net </li></ul><ul><ul><li>Enables us to be even more intimate </li></ul></ul><ul><li>Online sales : $30 M / day in Q 2, ‘99 - 40% of Revenue </li></ul><ul><li>www.dell.com - largest direct company in the worldwide home </li></ul><ul><li>and small business market </li></ul><ul><ul><li>Allows customers to configure and order using credit card 21 different features (e.g., hard drives, printers, speakers) 3 to 10 options for each, hence, millions of configurations </li></ul></ul><ul><ul><li>Check status of order online </li></ul></ul><ul><ul><li>Access to same tech support information as Dell staff </li></ul></ul><ul><ul><li>Even dispose of it online at an auction </li></ul></ul>
    34. 34. <ul><li>Dell Portal, Dellnet.com : </li></ul><ul><li>Bundles Web services with sale of PCs </li></ul><ul><li>“ Breakfast with Dell”: </li></ul><ul><li>Online forums with Dell executives </li></ul><ul><ul><li>Expanded beyond big corporate buyers to small businesses </li></ul></ul><ul><li>Virtual Account Executive </li></ul><ul><li>“ Interested in a notebook but can’t fly to Austin for a demo? </li></ul><ul><li>Go to our Website and get a full-motion video of someone </li></ul><ul><li>explaining it!” </li></ul>Dell Online
    35. 35. Personalization on the Net <ul><li>“ My Dell” Web pages </li></ul><ul><li>For small business and home-office customers </li></ul><ul><ul><li>Enable conversations about service, industry trends, </li></ul></ul><ul><li>new products </li></ul><ul><li>Get weather, business information and tech support papers </li></ul><ul><li>Online knowledge bank </li></ul><ul><li>To respond to service questions </li></ul><ul><ul><li>Using artificial intelligence software </li></ul></ul>
    36. 36. Schwab’s Fourth Channel for Customer Contact : E-mail <ul><li>Existing Channels: Branch Offices, Telephone, Website </li></ul><ul><li>E-Mail : “Huge opportunity to reach out and talk to </li></ul><ul><li>customers” </li></ul><ul><li>Research found that Schwab customers </li></ul><ul><li>spend an average of two hours daily on e-mail </li></ul><ul><li>Lot more e-mail users than Web users </li></ul><ul><li>E-mail messages: Permission-based </li></ul><ul><li>- On topics or products customers have asked </li></ul><ul><li>- Marketing angle is more subtle – a message in the text </li></ul><ul><li>with a URL address referring to something on its site </li></ul>
    37. 37. Three Categories of Outgoing E-mails 1. Microcast Customized e-mails to 500,000 people e.g., “Full Closing Bell” service Gives end-of-day services and news abstracts on the positions customers hold and have on their watch lists
    38. 38. Three Categories of Outgoing E-mails 2. Narrowcast 1.2 M Customers have signed up to receive these e-mails e.g., A customer volunteers that she is interested in three topics: mutual funds, the basics of investing and Schwab’s CEO Speaker Series. She would then receive e-mail bulletins at every month-end with information on only these topics.
    39. 39. Three Categories of Outgoing E-mails 3. Broadcast All Schwab customers can potentially get them e.g., General interest announcements such as pricing changes and IPO announcements to eligible customers
    40. 40. New Economy Meets An Old Industry <ul><li>Agriculture is changing dramatically using IT, including the Net </li></ul><ul><li>Farmers under constant pressure to improve crop yields and productivity </li></ul><ul><li>Razor-thin margins …Get Big or Get Out! </li></ul><ul><li>Business 2.0 , June 27, 2000 </li></ul>Mike Pank - everyone of his 1300 cows is “wireless-enabled”
    41. 41. IT on the Farm - Wireless Cow-Tracking <ul><li>… Yields “Cow-Health Profiles” </li></ul><ul><li>Everyone of Mike Pank’s 1300 cows is wireless enabled: a rectangular radio transmitter bulges from the anklets wrapped around the cow’s right foreleg </li></ul><ul><li>Keeps track of how many steps the cow takes each day - if her activity is down, she might have a sore foot or indigestion, or she is just lazy! “A cow that is not feeling well is not going to milk.” </li></ul>
    42. 42. IT on the Farm - Wireless Cow-Tracking <ul><li>Data from the transmitter sent to Pank’s office PC system </li></ul><ul><li>Converted into graphs for each cow which Pank views to look for patterns </li></ul><ul><li>Profile for Cow #376 - “the green activity line has gone way up … she is ready to be bred”! </li></ul><ul><li>Cost of Software - $70K - Cheaper than paying someone to monitor the cows year after year </li></ul><ul><li>Value: Increased Milk Production - Which cows need treatment? - Which should be inseminated? </li></ul>
    43. 43. IT on the Farm - Other Value-Add Applications <ul><li>E-Procurement - Pank uses Net Exchange, Farmbid.com, to procure seed and fertilizer…gets “good deals” as compared to buying though local dealers and distributors </li></ul><ul><li>Tracking Delivery Trucks - through GPS </li></ul><ul><li>E-Hiring - “Got the new veterinarian through the Net … he’s from Costa Rica.” </li></ul><ul><li>“ Integrated” Database “Cow Profile” data integrated with cow’s white-blood cell count data from the milking machines … enables Pank to determined the health and estrous cycles of his cows instead of educated guesses about which cows were healthy or ready for breeding </li></ul>
    44. 44. Agribusiness Value Chain <ul><li>Suppliers: </li></ul><ul><ul><li>Manufacturers of seed, fertilizer, equipment </li></ul></ul><ul><li>Dealers: </li></ul><ul><ul><li>Local middlemen selling at a markup </li></ul></ul><ul><li>Farmers: </li></ul><ul><ul><li>Converting raw materials </li></ul></ul><ul><li>Distributors: </li></ul><ul><ul><li>Process farm “output” for delivery to consumers </li></ul></ul><ul><li>Farmers isolated from both ends! </li></ul>Suppliers  Dealers  Farmers  Distributors  Consumers
    45. 45. The New Moo Thing... <ul><li>Net Compresses the Value Chain </li></ul><ul><li>… Reduces Costs - Eliminates the dealer’s markup -- 30% off dealer’s price … Saves Time - Can order and track supplies 24 hours a day and change orders in real time rather than spend valuable hours during the workday calling regional dealers </li></ul>Suppliers  Farmers  Consumers
    46. 46. Several Players … Grabbing “Farm-share” <ul><li>Web sites combining: </li></ul><ul><ul><li>Ecommerce, Content, Community </li></ul></ul><ul><li>Bring buyers and sellers together </li></ul><ul><li>Buyers: Farmers </li></ul><ul><li>Sellers: Manufacturers Dealers looking to expand their customer base beyond local regions </li></ul><ul><li>Create one-stop shops for farmers, dealers and manufacturers </li></ul>
    47. 47. A New Player : XSAg.com <ul><li>Partner with @griculture.com - A farming content site produced by the publishers of Successful Farming, to provide back-end E-C technology for the site </li></ul><ul><li>50,000 customers - half are farmers </li></ul><ul><li>Posts auction bids on the site for seed, chemicals, equipment parts, ... </li></ul><ul><li>Charge 2% transaction fee to the seller </li></ul><ul><li>Farmers search database for a specific product and gets connected to dealer or manufacturer </li></ul><ul><li>Both parties pre-approved by XSAg.com as eligible both geographically and financially </li></ul><ul><li>Save average of 30%! </li></ul>
    48. 48. Old Guard is Changing ! <ul><li>Three major suppliers (Cenex Cooperative, Cargill, DuPont) formed Rooster.com </li></ul><ul><li>Buy and sell chemical, seed, fertilizer, equipment and more </li></ul><ul><li>Trying to be “neutral” </li></ul><ul><li>Dealers fighting back, paying visits to farmers, offering discounts and free supplies </li></ul>
    49. 49. Farming with Precision <ul><li>Use wireless and satellite technologies … … wireless solar moisture sensors to enable farmers to water their crops precisely so that they are not wasting water or neglecting areas that need more water than usual … the sensors can be calibrated for specific crops … other products can even measure “disease pressure” to cut down on the amount of pesticides used </li></ul><ul><li>IT helps to gather and analyze data in real time … … previously, farmers spent hours walking their fields to take soil samples, or make constant, manual checks to determine moisture, pest damage … many had to hire farmhands to help out … cost of two-way satellite-delivered Internet access system: $650 - $2,000 per month </li></ul>
    50. 50. What’s the Net’s Value <ul><li>On-line Exchanges provide greater selections, eliminate middlemen and pass savings to consumers </li></ul><ul><li>Virtual Farm Co-ops - Reducing the divide between small farmers & major growers - Levels the playing field - Small farms can be more competitive - All buying at the same place with similar deals </li></ul><ul><li>Farming with Precision - Utilize every asset as efficiently as possible to yield maximum possible output </li></ul>
    51. 51. Creating e-Communities (like eBay) - To Foster Customer Loyalty <ul><li>King Arthur Flour (Norwich, Vermont) </li></ul><ul><li>Selling flour online is unviable … </li></ul><ul><li>… It’s heavy, yet cheap </li></ul><ul><li>… Shipping costs are a big % of price </li></ul><ul><li>… A commodity which is available everywhere </li></ul><ul><li>Sees the web not simply as a place to get some orders… </li></ul><ul><li>BUT to consolidate and build a customer base it has cultivated for decades </li></ul><ul><li>Source: The Wall Street Journal, Special Report on E-Commerce , Oct. 29, 2001 </li></ul>
    52. 52. King Arthur Flour’s USP <ul><li>King Arthur Brand – Over 100 Years Old </li></ul><ul><li>… More a marketer than a miller </li></ul><ul><li>… Sells only flours milled by others to its specifications </li></ul><ul><li>… 50 different flours, 9 different kinds of yeasts, </li></ul><ul><li> 8 different kinds of salt </li></ul><ul><li>… King Arthur’s flours are not just another commodity </li></ul><ul><li>Cult-like following among many bakers – Will go to extraordinary lengths to get the product sold only in a handful of speciality grocers in many states </li></ul>
    53. 53. How King Arthur Flour Taps Into the Community of Bakers <ul><li>1980s: Launched a catalog to satisfy the demand of New Englanders, who moved out to other parts of the country </li></ul><ul><li>1996: Set up the web site designed mainly as a place to get recipes and to track down stores selling King Arthur products </li></ul><ul><li>… Map for finding the stores was the third-most-popular part of the site (after recipes and requests for a catalog) – 250 visitors a day </li></ul>
    54. 54. More Value-Add for Customers <ul><li>Online Baking Classes – basically a recipe accompanied by pictures and detailed instructions; includes a list of FAQs for baking, and links to a schedule of in-person classes </li></ul><ul><li>Recently added a new bulletin-board feature, called Baking Circle – web visitors can write in to pose questions or answer them, and share recipes and tips </li></ul><ul><li>5000 new visitors signed up in the first two weeks; Over 1500 messages were posted </li></ul>
    55. 55. Value of the e-Community <ul><li>The Baking Circle: A resource-efficient way to reinforce company’s ties with current and potential customers </li></ul><ul><ul><li>Eliminates the need for a staff of baking experts to answer questions </li></ul></ul><ul><li>Online Sales in 2000: $3 M; Total Sales: $25 M </li></ul><ul><li>Not easy to measure how much the information-sharing e-Community contributes to total sales </li></ul><ul><li>But, growth in traffic to the web site has coincided with sales growth outside New England </li></ul><ul><li>Introduced a new loyalty program, called Baker’s Points, </li></ul><ul><ul><li>Can track purchases by visitors to the Baking Circle . </li></ul></ul>
    56. 56. Wireless CRM - Vendors Add Portable Options <ul><li>Siebel 7 Mobile, rolled out in March 2002, is accessible through virtually any wireless device with wireless managing capabilities for alerts, recommendations and communications </li></ul><ul><li>- Focused mainly on data synchronization capabilities – allowing users to access applications while disconnected; update information on handheld devices such as PDA’s, cell phones or disconnected laptops; then synchronize with the server when reconnected. </li></ul><ul><li>PeopleSoft’ mobile efforts also focused mainly on data synchronization capabilities </li></ul><ul><li>We are still in the early days of wireless CRM. The technology is still in the cradle. (CEO of E.phiphany, Computerworld, Mar.18, 2002) </li></ul>
    57. 57. Case Example: Foremost Insurance Co. <ul><li>Replaced 1,000–page, monthly batch reports sent overnight from headquarters to sales agents in the field , with a mobile CRM System running on laptops </li></ul><ul><li>CRM tool from Oncontact Software Corp. (Cedarburg, Wis.) built on top of a mobile database and synchronization product from Sybase subsidiary, iAnywhere Solutions </li></ul><ul><li>Salespeople synchronize their data on the laptops with the corporate database each night </li></ul>
    58. 58. Early Results … <ul><li>Before: Salespeople spent hours sorting through bulky paper </li></ul><ul><li>reports just to figure out which accounts to call on </li></ul><ul><li>Now: We couldn’t pry the computer out of their hands. </li></ul><ul><li> - Sales people enter information on their customer contacts Which potential customers are using a competitor’s product – </li></ul><ul><li>if the competitor withdraws from a particular market, Foremost sales agents can target that business right away. </li></ul><ul><li> - Data about sales calls in the field is available at headquarters </li></ul><ul><li> Prevents multiple salespeople from calling the same customer </li></ul><ul><li> - CRM database is mined to identify the biggest customers, the least profitable customers and the most productive sales agents </li></ul><ul><li>Source: Computerworld, Apr. 15 , 2002 </li></ul>Savings: $2M (and a lot of trees!) from deploying to just 60 (out of 1,300) salespeople and 50 internal users
    59. 59. Speech Recognition Becoming An Important Interface - “Just Talk To Me” <ul><li>Already, a not-uncommon feature at the call centers of telephone companies, financial service providers and airlines in the U. S. </li></ul><ul><li>Drivers for this technology: </li></ul><ul><li>… Anytime and anywhere that there is a telephone </li></ul><ul><li>… Over 1 billion phones in the world </li></ul><ul><li>… New subscribers are being added to global networks </li></ul><ul><li> at double-digit rates </li></ul><ul><li>… People willing to pay a premium for such devices </li></ul><ul><li>Why Now? (Rather Than 5 Years Ago) </li></ul><ul><li>… Enabling technology has become cost-effective </li></ul><ul><li>Market expected to expand ten-fold in the next 5 years </li></ul><ul><li>Source: The Economist Technology Quarterly, Dec.8, 2001,p.13 </li></ul>
    60. 60. Impact on Call Centers <ul><li>80,000 centers in the U.S. dealing with customers’ requests; Annual Expense - $ 90 billion+ </li></ul><ul><li>… Cost of Human Operator: $1 a minute </li></ul><ul><li>AT&T has deployed a proprietary natural language system in it’s call centers to process over 2M calls a month </li></ul><ul><li>Benefits of Speech Technology: </li></ul><ul><li>… Lowers overhead costs of call centers </li></ul><ul><li>… Improved quality and consistency of information services </li></ul><ul><li>… Eliminate telephone queuing in the process </li></ul>Automatic Speech Recognition is saving the word from the “touch-tone hell” of the multi-layered, menu-driven, voice-mail systems that can leave the caller in a blind alley or an endless loop.
    61. 61. Schwab: A Pioneer in Using Speech Systems <ul><li>1996: First system introduced for retail booking </li></ul><ul><li> … New accounts up by 41% in that year </li></ul><ul><li> … Call centers took 97 M calls </li></ul><ul><li>System installed by a leading supplier, Nuance (Menlo Park, CA) </li></ul><ul><li>Automated attendant can understand </li></ul><ul><li> … 15,000 names of individual equities and funds </li></ul><ul><li> … Takes up to 100,000 calls a day </li></ul><ul><li> … 93% accurate in identifying queries the first time </li></ul><ul><li>Customers get immediate attention to quotes and trading, even during busy periods </li></ul>Costs cut from $ 4 – $ 5 per call to $ 1
    62. 62. Many Other Opportunities … <ul><li>… Voice-activated dialing </li></ul><ul><ul><li>Customers dial the main switch board: Get me Jane Smith, please; System finds her number in an internal directory and dials it automatically </li></ul></ul><ul><ul><li>IBM: Saved money, made life easier for its 300,000 employees </li></ul></ul><ul><li>… Self-service banking; Automated weather and stock market reports </li></ul><ul><li>… VIRTUAL PERSONAL ASSISTANT (VPA) </li></ul><ul><li>- With a VPA account at the local telephone company, a parent could call and say “Remind me to pick up John from football practice at 5pm today”, and then get a reminder call at the appropriate time </li></ul><ul><li>… VOICE PORTALS </li></ul><ul><ul><li>Give telephone users a single point of entry to voice-based services and information on the web ( like Yahoo does for computer users) </li></ul></ul>
    63. 63. Web Services - Hailed as “The Future of Computing” <ul><li>Simple Definition : </li></ul><ul><li>Use of Internet-based standards to integrate computer systems </li></ul><ul><li>Importance of Standards: </li></ul><ul><ul><li>PC became a mainstream computing tool because of standardized machine (the IBM PC) and operating system (DOS) </li></ul></ul><ul><ul><li>Arrival of HTML (HyperText Mark-up Language) led to creation of over 30 M Web sites between 1995 and 1997, transforming the Net from an academic network to a ubiquitous communication channel for business, government and individuals </li></ul></ul><ul><ul><li>Web Services are built on XML-based (Extensible Mark-up Language) standards </li></ul></ul><ul><ul><ul><li>Will propel the next phase in the development of the Net </li></ul></ul></ul><ul><ul><ul><li>Moving on from static Web pages to enabling machine-to-machine interaction </li></ul></ul></ul><ul><ul><ul><li>Source: Financial Times , May 1, 2002 </li></ul></ul></ul>
    64. 64. Integration Made Easy! Example: Dollar Rent A Car <ul><li>Built a system in just a month to let travelers book car reservations with Dollar while buying tickets on the Southwest Airlines website </li></ul><ul><li>Connecting Dollars’ reservation system to other companies’ websites to share information is EASY with Web services - connections do not have to be built one at a time ; traditional EAI technology is costly and takes months Built links to small tour operators, travel reservation systems,… Also rolled out a wireless website for use on mobile phones & PDAs </li></ul>Translated back into format that Dollar’s reservations system can understand Translated into Web services protocols using Microsoft technology as as intermediary Customer makes reservation at Southwest Airlines Web site
    65. 65. How Web Services Works <ul><li>1. Dollar publishes instructions using WSDL (Web Services Description Language) so other “machines” can talk to Dollar’s “machine” </li></ul><ul><li>2. A reservation for Dollar is posted on Southwest Airlines website </li></ul><ul><li>3. The Southwest Airlines machine sends an XML (eXtensible Mark-up Language) message about the reservation to Dollar’s machine using SOAP (Simple Object Access Protocol) commands </li></ul><ul><li>4. The XML message is translated into a format understood by Dollar’s database </li></ul>
    66. 66. The Alphabet Soup of Web Services <ul><li>WSDL - A set of computerized instructions that describe what a Web services application can do and what protocols and formats it uses </li></ul><ul><li>XML - Describes the data that is being transmitted to the Web Services application in the receiving end, such as product name, price, … HTML defines how the elements of a document are to be displayed whereas XML defines what kind of information each element contains </li></ul><ul><li>SOAP - A message-transfer protocol used to send commands across the Net describing where a message is going, its content, and how it is to be used </li></ul><ul><li>UDDI (Universal Description Discovery and Invention) - The “Yellow Pages” of Web services - an XML-based catalog of businesses and the Web-accessible services they provide </li></ul><ul><li>Business 2.0 , April 2002 </li></ul>
    67. 67. Impact of Web Services <ul><li>1. Much cheaper and easier to integrate systems internally by providing a common language for applications to speak to each other </li></ul><ul><li>2. Connectivity to external partners will evolve with development of standards for individual industries such as Rosetta Net, a not-for-profit standard-setting consortium of companies in the electronics industry </li></ul><ul><li>3. A new way to build software “that can run across a network” - will shorten the time and reduce the cost of writing and maintaining software applications; applications can be built out of re-usable software components from different business units within an enterprise or sourced from third parties, who will advertise their components in internet directories. </li></ul>
    68. 68. A Real-World Flavor of Web Services in a CRM Case Example: Putnam Lovell Securities Putnam research analysts write their reports on a Web site operated by BlueMatrix When finished, analyst presses a button and a message zips to a site operated by GrandCentral Communications <ul><li>Salesforce.com </li></ul><ul><li>Interests of </li></ul><ul><li>clients </li></ul>Site matches topic of the report with interests of Putnam’s clients <ul><li>Salesforce.com </li></ul><ul><li>E-mail addresses of </li></ul><ul><li>matched clients </li></ul>BlueMatrix dispatches reports to selected clients Today:
    69. 69. The Benefit ... Before: Salespeople contacted Putman’s Publications dept. to mail research report to a client Publications dept. tracked down the desired report, packaged and mailed it Automatic routing of research reports via e-mail saves $500,000 a year on printing and e-mail costs alone. PLUS New process prompts trades that might not have been made Source: BusinessWeek, Mar.18, 2002
    70. 70. CRM Vendors Embrace Web Services - Spate of Announcements in 2002 <ul><li>“ Siebel Looks to Web Services for CRM Ties” (April 22) </li></ul><ul><ul><li>Will release it’s Universal Application Network in mid-2002 to tie its CRM software with other business applications </li></ul></ul><ul><ul><li>Promise: Seamless Integration </li></ul></ul><ul><ul><li>Partnering with IBM, Tibco Software and webMethods to address the client’s #1 problem: </li></ul></ul><ul><ul><li>Integrating Applications , a BIG COST item in implementing CRM </li></ul></ul><ul><li>“ PeopleSoft Bets Big on Web Services” (May 29) </li></ul>
    71. 71. Most Profound Impact of Web Services - Business Process Changes <ul><li>10 years ago: If you were a good customer, FedEx shipped you a PC and allowed you to dial into their network </li></ul><ul><li>5 years ago: You could get the shipping information from any browser </li></ul><ul><li>Customers now want shipping information on their order status screen </li></ul><ul><li>– Web Services will enable this </li></ul>FedEx plane containing your package is snowed in Cincinnati FedEx system knows your package will not arrive in the morning A Web service can send you early notice of a non-delivery through the CRM system Business process for supply chain looks for an alternate supplier, if you cannot wait for the package
    72. 72. Boston Area Web Services Roundtable * - Highlights Hurdles <ul><li>Security Concerns </li></ul><ul><li>Interoperability standards </li></ul><ul><li>Data trapped in legacy systems </li></ul><ul><li>Immaturity of current Web services protocols </li></ul><ul><li>…… </li></ul><ul><li>PLUS Slashed IT Budgets </li></ul><ul><li>STILL, A Huge Incentive To Use It </li></ul><ul><li> Systems integrators make a lot of money integrating systems. If we can automate that integration and save ourselves that money, we win. </li></ul>*June 2002
    73. 73. The New Business Lens...
    74. 74. The New Business Lens...
    75. 75. Future of E-Commerce - According to Gartner Group in Early 2000 <ul><li>Currently - at peak with inflated expectations </li></ul><ul><li>Next 3-4 years - many failures due to failure of strategies, business models, and execution </li></ul><ul><li>Next 5-20 years , - e-commerce will be completely embedded in organization’s business processes, not disruptive </li></ul>Source: The End of E-Business, Benjamin Eisman, Executive Edge, Feb/Mar 2000
    76. 76. The End of “E-Business”?
    77. 77. Is E-Business Finally Living Up To Its Hype? Source: 2003 E-Business Survey of 512 companies published by CIO Insight 60 Closely Track the Value of E-B Efforts 70 Not Yet Tapped the Full Competitive Advantage of E-B 59 Significant Cost Savings 42 Revenues Have Significantly Increased % of Companies E-B Survey Finding
    78. 78. Evolution of E-Business Phase I : “Brochure ware” Phase II : Online Transactions & Order Status Tracking Phase III : Move Core Business Functions to a Web - Centric Model Deploy Web-based applications for: - Increasing revenues - Cutting costs - Enhancing customer service - Improving employee productivity
    79. 79. How Can E-B Provide A Competitive Advantage? <ul><li>SPEED </li></ul><ul><li>“ Time is the biggest leverage point today when it comes to getting ahead and staying ahead of the competition, because getting to your cash more quickly allows you to make more money off the same margin.” </li></ul><ul><li>“ At Cisco, time was currency. We would have aggressively embraced E-B even if it had cost us more, because it allowed us to be faster than our competitors.” </li></ul><ul><li>2. COST </li></ul><ul><li>“ Today, the top priority of the CIO is to take cost out of the current business processes via E-B.” </li></ul><ul><li>“ You need to find cost-effective ways to serve the “micro-needs” of your customers, and do so better than your competitors.” </li></ul>
    80. 80. How Can E-B Provide A Competitive Advantage? 3. CUSTOMERS “ Customer self-service is really on the top of every company’s E-B wish list.” “ When you make available Web-based services to your customers, like order management or logistics, you completely transform your relationship from a buy/sell one to a service-based relationship.” 4. PROCESS “ The smart CIOs are the one who understand how to tightly link their E-B initiatives with their companies’ business processes to get ahead.” “ With E-B, you’re trying to unlock process innovation. Can we modify the business processes in order to take advantage of the Web’s capabilities? Otherwise, it’s like putting lipstick on a pig. If all you are doing is putting Web-based GUIs on antiquated business processes, what’s the point?”
    81. 81. In Conclusion ... We are in the middle of a 20-year march. We are just halfway there in terms of realizing the full potential of digital technologies to transform industry and commerce. We have only seen the beginning of the inter-enterprise efficiencies and customer relationships that are possible… Those who stay focused on innovative applications of new technologies to solve business problems will win big. - The CEO Challenge 2001 Survey

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