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Appendix M-1 a


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Appendix M-1 a

  2. 2. Non-Disclosure Agreement The undersigned acknowledges that Nascent Applied Methods & Endeavors has furnished to the undersigned potential Investor ("Investor") certain proprietary data ("Confidential Information") relating to the business affairs and operations of NAME for study and evaluation by Investor for possibly investing in NAME. It is acknowledged by Investor that the information provided by NAME is confidential; therefore, Investor agrees not to disclose it and not to disclose that any discussions or contracts with the NAME have occurred or are intended, other than as provided for in the following paragraph. It is acknowledged by Investor that information to be furnished is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by Investor, except as provided in this agreement, may cause serious harm or damage to NAME, and its owners and officers. Therefore, Investor agrees that Investor will not use the information furnished for any purpose other than as stated above, and agrees that Investor will not either directly or indirectly by agent, employee, or representative, disclose this information, either in whole or in part, to any third party; provided, however that (a) information furnished may be disclosed only to those directors, officers and employees of Investor and to Investor's advisors of their representatives who need such information for the purpose of evaluating any possible transaction (it being understood that those directors, officers, employees, advisors and representatives shall be informed by Investor of the confidential nature of such information and shall be directed by Investor to treat such information confidentially), and (b) any disclosure of information may be made to which NAME consents in writing. At the close of negotiations, Investor will return to NAME all records, reports, documents, and memoranda furnished and will not make or retain any copy thereof. ____________________________________ _______________ Signature Date ____________________________________ Name (typed or printed) ____________________________________ Investor's Company This is a technical business plan. It does not imply an offering of securities.
  4. 4. Table of Contents Executive Summary………………………………………………1 Company Description…………………………………………….5 Industry Analysis…………………………………………………9 Target Market……………………………………………………22 The Competition…………………………………………………25 Marketing Plan…………………………………………………..30 Operations……………………………………………………….33 Management……………………………………………………..46 Development…………………………………………………….51 Financial Plan……………………………………………………53
  5. 5. Executive Summary The Concepts Technology-related business services are among the fastest growing industries in the world. The explosion of the use of computers and the Internet in virtually every consumer and business setting has provided unprecedented opportunities to companies providing support and services for Electronic Commerce Applications (ECA), Enterprise Work Architectures (EWA), Electronic Data Interchange (EDI), and Distributed Artificial Life Programming Strategies (DALP). Because these fields are relatively new, market leaders have not yet emerged, and customer loyalty has not yet been established. This enables a well-conceived and well-executed company & network such as NAME to secure a leading position in these fields. The Company Nascent Applied Methods & Endeavors (NAME), is a California-based company & network providing EDI/EWA/ECA and DALP technologies through the distributed- database strategy of Employment Related Educational Research & Development, in the greater Los Angeles, California, area. Properly structured & managed electronic commerce technology-based business services, are among the most marketable and healthiest firms in the global information economy, and NAME intends to capitalize on the opportunities in this area by being the first company to introduce a truly internet- based operating system using human genetics. The Company’s Mission Nascent Applied Methods & Endeavors views its mission as increasing the individual and global corporate community’s productivity by helping them to realize the maximum benefit from their personnel or computers through Internet technologies. NAME is dedicated to building long-term relationships with its customers through quality education & support, and through being known as the premiere electronic commerce company within the greater World Wide Web. The goal is steady expansion, and becoming profitable within the first two years of operations. Products and Services The company’s service provides, for example, an emphasis on the use of engineering informational designs & analysis that would strive to maintain a balance between research and application. The Enterprise Work Architecture (EWA) for instance, will cover: (1) Computational Intelligence in Industrial Engineering, (2) Consumer Product Design, (3) Economic Engineering & Cost Estimation, (4) Facilities Design & Location, 1
  6. 6. (5) Information Systems, (6) Maintenance Engineering and Management, (7) Materials Handling, (8) Performance Analysis & Simulation, (9) Production Systems Design, Planning and Control, (10) Productivity & Business Strategies, (11) Project Management, (12) Technology Management & Transfer, (13) Total Quality Management & Quality Technology, (14) Work Measurement & Methods Engineering, (15) Industrial Ergonomics & Safety, (16) Applied Operations Research, (17) CAD/CAM, and (18) Other Topics of Interest in the Industrial Engineering Fields. Additionally, NAME’s product lines includes a genetic Internet-Based Operating System (IBOS), an Integrated Autonomous Office Application (IAOA), a generic designer software formula called Managerial Applied Numerics (MAN), and a programming strategy titled Distributed Operating System Architecture (DOSA). Which are the study of the design & implementation of computerized software agents that can make decisions on their own and in interaction with a user or other software agents over a personal/corporate intranet or the World Wide Web. Software agents interact with users or act autonomously and rationally in time-constrained, open, multi-agent environments. Case in point, the aim of our company’s Distributed Artificial Life Program (DALP) is to bring together the micro & macro aspects of these emerging technologies through virtual biological cloning, of which shall facilitate the implementation of artificially induced scenarios used in developing real-time problem resolutions. Moreover, these products of NAME addresses the issues of: agent specification via information retrieval theories, modeling of computer agents, decisions of and in IBOS/DOSA/IAOA multi-environments, development of coordination strategies in distributing information, digital negotiation mechanisms, technical conflict detection & resolution strategies, communication protocols, and mechanisms whereby computerized software agents can maintain autonomy while still contributing to overall system effectiveness. The company’s software system(s) will also explore computer agent shell architectures, methodologies for realizing compatible or viral agents, agent decision- making theories, inter-agent communication, end-user natural language discourse, and software engineering tools for programming and experimentation with other autonomous agents. Marketing and Sales Strategy Nascent Applied Methods & Endeavors differentiates itself in the market by first aiming its products and services toward subcontractors or distributors through the company’s Seller Assisted Marketing Plan, and then focusing its overall products & services toward actual customers. The company does this by emphasizing education in systems technologies that increase customer productivity, and by providing an ongoing comprehensive support infrastructure and follow-up to the customer. Sales are secured predominately through the Internet or face-to-face solicitation. The Competition 2
  7. 7. No market leaders have yet emerged in this electronic commerce field, and what competition that does exists is diverse and uneven, creating substantial market opportunities. NAME maintains the following advantages over any existing competition: the ability to develop over 4 billion internet-based software platforms from a single autonomous agent programming strategy, an ongoing support mechanism for customers, a strong marketing emphasis on increasing customer productivity, a coordinated marketing program, professional image, qualified management, consistent quality of education, and the availability of the NAME training centers & simulations on the World Wide Web. Target Market Nascent Applied Methods & Endeavors operates in the greater Los Angeles area, but targets individuals and small, medium & large-sized businesses with high computer use in the emerging electronic market- place all over the world. Since the Internet or World Wide Web is a large and diverse electronic vehicle, it is estimated that its community consists of over 300,000,000 users to date, both individuals and businesses alike. Management Founder and owner William E. Fields, brings significant technology-related management skills to his position in NAME. Immediately prior to establishing NAME, Mr. Fields completed a sixteen-year research & development project in genetic internet-based operating systems, integrated autonomous office applications, and distributed artificial life programming. His experience in this area brings to the company the knowledge & technologies necessary to make it a success, as well as insuring its long-term competitiveness. Operations In 2007, Nascent Applied Methods & Endeavors plans to initiate an integrated system for the planning, delivery and management of employment related educational products, programs & services through the use of advanced subcontractural telecommunication services (instructors). NAME will delivers its technologies & training from a series of instructor-led computerized autonomous agents toward individuals & businesses at remote sites located throughout the world. The customers can interact with the instructor (agent) and each other through the use of multi-media and the Internet as if they were together in the same classroom setting. Typically, the client’s past & current job related performance and task analysis leads to the identification of the educational needs, which are either being met by current ad-hoc instructional strategies, are not being met satisfactorily, or are not being addressed at all because of various constraints. The effort is then to focus on the educational needs that are not being met satisfactorily or not addressed at all. 3
  8. 8. Stage of Development Nascent Applied Methods & Endeavors is in the planning and entrepreneurial stages of its development, and plans to initiate its marketing plan & services in the early part of 2009. Financials The financial strategy of NAME emphasizes the reinvestment of income for growth during the first few years of operation, with the company reaching profitability in the first few months. The combined minimal revenue projections for the first five (5) years under marketing plans 1 - 10 are $39,028,319; for 2009, $154,159,300; for 2010, $233,998,152; for 2011, $238,247,375; for 2012, and by the year 2013, $178,685,531 or approximately $844,118,677 in distributed income by the end of the initial education and service cycle of NAME and the A-Square Technology Group. Funds Utilized The company is currently seeking to disperse numerous $441,000 contract awards toward solicited network solution providers with an additional income and benefits package, and investment capital from twelve network investors or investment groups for a sizable return in equity over an initial 5 years, as well as a seat on the Board of Representatives. The investment capital will be used for operational activities, including the establishment of new electronic markets, the hiring of new staff, and increasing marketing activities. Long-term plans calls for the company to either develop diversified network operations or expand to become a C-Corporate Entity. 4
  9. 9. Company Description Nascent Applied Methods & Endeavors is a California-based company providing new software technologies and educational services on the World Wide Web and the emerging electronic markets within it. Business headquarters and our host Internet site are located in Los Angeles, California. NAME is a networking, communications, educational & procedural development company that utilizes its ideas in systems development to provide cost effective, strategic profiles for individuals and businesses. The company has developed a unique & powerful set of infrastructural information technologies that enables the creation of over 1.2 billion individually engineered software platforms. The Company’s Mission NAME is an innovator in developing new electronic markets. Its primary focus to date has been on developing the electronic markets of informational products and services to extend the ranges of Local and Wide Area Networks. The company also uses distributed- database technologies to provide low costs, easy-to-install network hardware devices for office & community-based computer networks. The company has taken a new approach to the challenge of developing procedural & educational networks. Its success will lead the way in many different disciplines, all focused on the objective of providing a host of multi-media products through the Internet and World Wide Web. NAME’s products and services enable its customers to use existing networks & software applications, rather than having to install new systems to achieve the same infrastructural goals. NAME is applying its technology to the large emerging electronic markets, such as high- speed information retrieval systems in the business world, and the delivery of high-speed Internet access & interactive services to consumers. This technology’s distinctive cost advantages has the power to accelerate the development of these global markets, creating exciting growth opportunities for both NAME, its subcontractors, and its customers. NAME’s business strategy is to provide solutions at several levels of systems integration. NAME will develop complete product solutions, such as self-replicating autonomous software programs, where appropriate to do so. These programs and services are marketed by NAME’s in-house telemarketing systems, subcontractors, business representatives, and distributors & manufacturers with specific horizontal market expertise. In other markets NAME will work with technology partners to develop artificial life programming and networking strategies as part of its complete network solutions. In the electronic markets, for example, NAME will provide true Internet access to all network 5
  10. 10. suppliers, contractors, subcontractors and consumers, for full incorporation into their systems. The company is also pursuing a similar strategy in its public agency networking services, working with key systems vendors and systems operators to integrate its technology into successful systems solutions. Products and Services Since 1985, NAME has been developing a comprehensive library of technical programming strategies that have wide ranging implications for the global electronic economies. The main emphasis of this technology is centered on the ability to control the dominant limiting factors in artificial life programming systems that use genetic algorithms, biological suffix trees, and a host of other information retrieval strategies. Of these factors, the most difficult is the self-replication of autonomous agents. In this area, NAME’s technology is able to deliver an order of magnitude improvement over other commercially available products and services. This dramatic increase represents a significant breakthrough in the design, development and implementation of enhanced artificial intelligence programs & services. The highlights of NAME’s strategic systems and technology base are summarized below: Fundamental - Can be Developed and Used in Many Networking Applications Because NAME’s technology resolves the problems associated with the development of accurate information retrieval systems, it can be applied to systems ranging from high- speed local area networks (LAN) to long distance video & information-on-demand networks (WAN) over installed distributed-database systems. Simple - Low-cost Products and Services NAME has developed a fundamentally different approach to the problem of providing multi-media based educational programs than other companies that are addressing these electronic markets. NAME’s confidential techniques are dramatically simpler and superior, so that products & services can be developed and tested much more quickly and cost much less. Economical - Uses the Customers Installed Communication Products and Services NAME’s programming technologies allows most customers to upgrade to the next generation networks without having to change their own operational and networking strategies. By integrating a network’s operational programs through the Internet into the operational network of NAME, a customer’s computer system can be upgraded in a matter of minutes at fraction of the costs associated with the formal replacement or retraining of personnel. To deliver interactive video or high speed Internet (or other on-line) access to a home or business, one dedicated computer system and one at a distributed location or 6
  11. 11. ONU (local distribution point), will make it possible to use existing networks to deliver multiple channels of high-quality video & lightning-fast computer downloads. Adaptable - A Standards Insensitive Implementation NAME’s systems technology is transparent to the evolving software engineering standards being developed for new educational networks. Because NAME’s technology is independent of unstructured complex procedural algorithms, it is easily adaptable to many standards being developed now and those likely to be developed in the future. NAME upon initiating its services will become the world’s leading developer of artificial life software products and services. The company’s primary objective is to provide information processing applications & development tools for object-oriented technologies and to also provide innovative solutions to end-users, resellers, and systems integrators worldwide. NAME facilitates a complete application development environment for creating & deploying informational analyses programs, such as human resource planning systems, manufacturing planning & control systems, and distributed-database networks. NAME’s inference engines and graphical tools enable our developers to rapidly create and deploy high-performance information retrieval applications, while using high-level programmatic systems such as Keynet. This approach enables both the novice and experienced application developers to create sophisticated, high-quality computer AL applications, without writing a single line of code. NAME’s comprehensive set of software programs eliminates the need to reinvest in additional development tools or third-party software packages to develop complete processing applications, which, in turn, reduces the inconvenience of having multiple sources of support and service. NAME’s family of products and services meets the AL application development needs of manufacturing, wholesaling, retailing, electronic publishing, financial services, service bureaus, and home-based businesses. NAME’s products and services will be available through the Internet and an international network of distributors in North America, Europe, the Pacific Rim, Latin America, and the Middle East. The company also shall establish strategic alliances with vendors of computer hardware & software systems and services, and secure continuing training contracts with its staff, subcontractors, vendors and targeted customer base. This will produce revenues of approximately $12,095,903 through its Seller Assisted Marketing Plan, and $39,028,319 to $844,118,679 through its customer base in the next five years following the implementation of its products and services. The company projects no operational deficits for the first few years of its operations, with income reinvested for expansion. We anticipate that the company will maintain its profitability throughout its operation. In the years following the implementation of our products and services, our goal is to become the premiere AL facilitator in the greater global economies. Trends in marketing, however, are toward globally known and 7
  12. 12. marketed providers, so the company anticipates either joining or starting an international association by the first year. Development to Date With its original concepts founded in 1983, NAME first began its initial research & development processes in artificial life programming (ALP) in 1985, and completed its scientific investigation in the early part of 1996. NAME is now using its procedural technologies to provide engineered information products and services for the fast growing electronic markets. In addition, the company is developing educational networks to provide improved strategical job skills to individuals and businesses using their existing information technologies, thereby substantially reducing the cost of introducing this new technology and service. Legal Status and Ownership Nascent Applied Methods & Endeavors is a sole-proprietorship under the laws of the State of California, and the United States of America and its territories. All products and services are wholly owned and operated by the Owner & General Contractor of Network Operations William E. Fields; subcontracting business units are solely owned by their subcontractors of network operations. The original funding of the company will come from the personal income of Mr. Fields and from the income generated form its Seller Assisted Marketing Plan. The company is now seeking additional funding from twelve individual investors or investment groups, in return for a sizable interest income over a five-year period and a seat on the Board of Representatives of general network operations. These funds will be used to solidify the Seller Assisted Marketing Plan of the company, and to initiate its networking operations in the emerging electronic markets. 8
  13. 13. Industry Analysis Nascent Applied Methods & Endeavors is more than well positioned to take advantage of the significant opportunities presented by the rapidly expanding electronic markets of computer-related business services. Electronic Commerce and Markets on the Rise Electronic commerce can be defined as “the buying and selling of information, products, and services via computer networks.” We can extend the definition by including the “support for any kind of business transactions over a digital infrastructure.” This matches with the broader use some companies do of electronic commerce. For instance, Silicon Graphics, a global manufacturer of high-end computer equipment, uses its presence on the World-Wide-Web as a way to provide information to its customers (e.g. access to product brochures and price lists), as a marketing tool (e.g. allowing a customer to contact a sales office), as a sales channel (e.g. on-line ordering of software products) and as a support line (e.g. making available software patches and frequently asked questions & answers). Another example is the recent introduction by the Bank of America of financial data exchange transactions over the Internet. Seen from a buyer-seller perspective, and using a life-cycle model, electronic commerce can be used in all the phases of a commerce transaction: E-commerce model (integrated perspective) Use Identify Find Arrange Purchase maintain, Buyer: need source terms & dispose Money Information Information Influence Exchange: & goods Seller: Arrange Find Arrange Fulfill Support to provide customer terms order customer 9
  14. 14. Features of Electronic Commerce Systems Electronic commerce systems can be of significant value as a lever for new customer management strategies, mainly because they; • directly connect buyers and sellers • support fully digital information exchange between them • suppress time and place limits • support interactivity & therefore can dynamically adapt to customer behavior • can be updated in real-time, therefore always up-to-date. The electronic service market or Internet as whole will grow at a phenomenal rate in the coming years. For instance, in mid-1993, the ANN group, one of the pioneers of electronic marketing, announced the development of the Industry.Net Online Marketplace to serve the needs of buyers specifiers of products and services purchased & specified by industry professionals. By late 1994, the Industry.Net Online Marketplace had grown to include hundreds of companies who began using it to announce new products, provide customer support information and, in general, promote their companies through electronic marketing programs. With the enormous growth of the World Wide Web. ANN created a Web site for Industry.Net in late 1994 and began promoting it through the Internet and to its database of over 150,000 industry buyers and specifiers. Today, the Industry.Net Online Marketplace is the largest industry-focused Web site on the Internet, including over 10,000 new products (1,000 more are added every month), company catalogs, seminar schedules and other marketing materials from over 450 of the industry leading companies. A recent article in the Wall Street Journal stated, “Industry.Net has emerged as perhaps the most popular network for the manufacturing sector…” Users are now visiting the Industry.Net Online Marketplace by the thousands. Current visits by qualified buyers and specifiers are now running at over 40,000 per month and its expected to have traffic exceeding 1 million buyers and specifiers this year. At the click of their mouse, users can instantly see all the new products of a given type announced within the past 6 months (computers, valves, controls, machine tools, software, etc.) and instantly interact with the manufacturer. In addition, they can visit trade shows on-line and get information from exhibitors who are Industry.Net participating companies-all from their personal computers anywhere in the world. Along with the global nature of today’s business, Industry.Net reports that 18% of buyers and specifiers visiting its online marketplace are from foreign users located in over 26 countries throughout the world. In addition to including information directly in the Industry.Net Online Marketplace, companies can also create their own Web site in the Marketplace with a unique Internet address. Newly Developing Electronic Markets 10
  15. 15. The World Wide Web was the brainchild of Tim Berners-Lee while working at CERN, the European high-energy physics laboratory in Geneva. It was originally conceived in 1989 as an idea that information should be accessible through a simple interface on any kind of computer, anywhere on a network. Once it became publicly available in 1991, the Internet community jumped on it immediately. In 1993, the Web got a phenomenal boost with the release of Mosaic-a graphical user interface called a Browser that now runs in virtually any personal computer. That gave the Web a look and feel of a Macintosh or any Windows-type program. Armed with an interface that anyone could use and a graphical presentation that appealed to millions, the Web has experienced phenomenal growth-more than any other computer application through late 1993 and 1994. In just that short period of time, usership has grown exponentially-world wide-to over 5 million users today-and continues to grow at a rate of over 40% per month! The field of electronic commerce is relatively new, and as such little statistical data or empirical research is available. Therefore, this business plan will formulate this framework as a set of brief propositions, which are based on examples from pioneers in the field. These propositions should certainly be validated by future research, which will also help refine them (e.g. how sensitive they are to a specific industry). Business Value Framework This section presents a framework detailing the value of electronic commerce, especially the World-Wide-Web component (Web) of the Internet, for commercial organizations dealing with end-customers. A common way to evaluate the value of the Web is to look at the potential of selling information, products and services on-line. However, as we’ll demonstrate, restricting the value of electronic commerce to direct sales only ignores a major part of the business value. Making money from direct sales is certainly the first way of getting value out of electronic commerce. Nevertheless, there are many others. The following table describes the components of that business value: The Organizational Source of Business Value Improve it - product promotion - new sales channel - direct savings - time to market - customer service - brand image Transform it - technological and organizational learning - customer relations 11
  16. 16. Redefine it - new product capabilities - new business models Let’s describe these ten components of business value in turn. Product Promotion Proposition 1: Through a direct information-rich and interactive contact with customers, electronic commerce can enhance the promotion of products and services. The first use of electronic commerce is to provide product and service information to customers, through on-line electronic brochures or buying guides. This can be seen as an additional marketing channel, allowing businesses to reach a maximum number of customers. The advantages of electronic commerce as a way to deliver product and service information is its availability anytime, anywhere, provided the customer has the right infrastructure (e.g. PC, modem, online service) to access this information. But using an electronic medium also allows for interactivity and customization. In a world with products and services being increasingly harder to differentiate shrinking life-cycles, an abundance of traditional media messages and customers having too little time, electronic commerce offers an opportunity for new promotion strategies, enhancing the branding of products and services. New Sales Channel Proposition 2: Thanks to their direct reach to customers and their bi-directional nature in communicating information, electronic commerce systems represent a new sales channel for new or existing products and services. Electronic commerce strategies are of primary value in markets where information is of significant added value to the products and services being bought, rather than in the commodity markets. For instance, in the wine industry, information on the winery, the type and quality of the wine or the food it goes well with are of significant value to customers, and usually hard to get through the traditional sales channel (e.g. supermarkets, liquor stores, etc.). Centralizing this information digitally is therefore of significant value for customers. In the case of information products and services, the electronic commerce medium actually becomes the delivery medium. As such, an electronic newspaper does not use paper anymore & can be fully delivered digitally. In some cases, (for instance ZDNet a service reporting on the computer industry), there is actually no paper version of the service. In another case, Software.Net, a company selling software, currently sells more than 300 packages, which can be delivered digitally and used literally minutes after buying them. By extending the notion of selling “informated” products and services, we 12
  17. 17. see new product and service categories emerging. For instance, the section below refers to the four ways of making money on the Web, the two last ones being new forms of products and services: • direct selling (i.e. selling products) • content selling (i.e. selling information) • advertising (i.e. giving out information such as news or directories for free, to drive traffic and sell it to advertisers) • transaction & links (i.e. charging a fee in exchange for a transaction, such as selling an airline ticket on-line or charging to link with a service provider, as in a yellow pages service). Direct Savings Proposition 3: By using a publicly shared infrastructure such as the Internet, and by digitally transmitting and reusing information, electronic commerce systems can lower the cost of delivery information to customers. By using automated systems and a digital transmission architecture, personnel, phone, postage, and printing costs can therefore be reduced. This is of especially high importance in the service industries, where the cost of customer service usually exceeds the product costs (e.g. for banks, credit cards, information brokers or telecommunications companies). Checking order status, getting a usage statement or a bill are examples of activities, which can be delivered much more cheaply using electronic commerce. In each case, the customer value is also higher, through a quicker reporting, or through the added information value (e.g. delivering not only a statement, but also historical statistics or graphics, adding advice to reduce some of these costs, etc.) Time to Market Proposition 4: Due to their instantaneous nature, electronic commerce systems allow to reduce the cycle time in producing and delivering information and services. In some markets or for some products and services, the ability to distribute or receive a product or service as soon as its been created is of primary importance. This is obviously the case of information distribution. A company such as Newspage, for instance, distributes information on hundreds of topics using electronic mail or the Web, to make sure it reaches its targets (usually decision makers in corporations) as soon as it is available. Customer Service Proposition 5: Through intelligence built into systems and the extended availability of intelligent support systems, electronic commerce systems can enhance customer service. 13
  18. 18. The ability to provide on-line answers to problems, through resolution guides, archives of commonly encountered problems, electronic mail interaction (and in the future audio & video support), and all that 24 hours a day, 365 days a year, builds customer confidence and retention. Monitoring how customers use this support information also provides insights on improvement areas in current products & services, and the list of issues encountered with products and services can be a significant source of product and services feedback for the design of new products and services. As consumers start using these systems in growing numbers, industries other than software manufacturing will take note of these opportunities and deliver online customer service. Today, the Wells Fargo & the Security First Network Bank are two examples of banks offering on-line statements and answering electronic mail queries on bank accounts. Two likely developments in this area are: • products which diagnose themselves and use an on-line connection to call a support specialist which can arrive on-site with the full knowledge of the problem to fix. • knowledge-based systems, which assist customers in finding solutions for their problems. Brand or Corporate Image Proposition 6: Electronic commerce systems will become one of components of a brand or corporate image, especially while targeting technology-friendly customer segments. This might be one of the most intangible aspects to measure, but building a brand or corporate image is of prime interest in some industries, those with commodity products or high competition. For instance, in the soft-drinks industry Coca-Cola and Pepsi spend huge amounts of money to try to differentiate basically similar products. Both of these brands use their Web presence as a way to affirm their corporate identity and their brand image, in addition to providing product information. Technology Learning and Organizational Laboratories Proposition 7: Rapid progress in the area of electronic commerce will force companies to adapt quickly and offer them an opportunity to experiment with new products, services and processes. If what was mentioned in this section is true, it will have a large and durable impact on the strategies of most organizations. Therefore, it is critical that these organizations quickly become familiar with the technology. The learning curve of mastering such technologies, and understanding their power to reshape customer relationships, is steep and can’t be achieved overnight. It is very often an iterative process, requiring organizations to trial new offerings, and tweak them according to customer feedback. 14
  19. 19. In a similar fashion, new technologies require new organizational approaches. For instance, the structure of the group dealing with electronic commerce might have to be different from the one typically used in the organization, in order to be more flexible and responsive to the market, or new processes might have to be put in place, for instance to deal with the authorization of publishing corporate information on the Internet. This type of corporate change needs to be planned & managed, and before getting it right, organizations might have to struggle with different experiments. Customer Relationships Proposition 8: Electronic commerce systems will allow to be built, more personalized relationships between suppliers and their customers, thanks to their ability to collect information on customer’s needs and behavioral patterns. According to Rayport & Sviokla “in today’s world of overcapacity, in which demand, not supply, is scarce” there needs to be a shift from supply-side to demand-side thinking, and organizations need to “sense and respond” to the customer’s desires rather than simply make and sell products and services. The focus is therefore on establishing relationships with customers, based on learning their needs and desires, proposing the right products and services, and keeping this relation active throughout the years. The role of technology in learning about customers is its ability to record every event in the relationship, such as customers asking for information about a product, buying one, requesting customer service, etc. Throughout all these interactions, either over the phone, in person or on-line, the needs of the customer are identified and will feed future marketing efforts. For example, if we use the example of the on-line travel agency, its ability to store and remember customer habits (e.g. always flies out of this specific airport, likes window seats and requests vegetarian meals) and particular data (e.g. frequent flyer numbers, preference for a particular rental car company, etc.) will establish a relation where the customer feels particularly comfortable in dealing with this particular travel agency. What electronic commerce brings as a lever to such a situation is the automation of the customer profile, his needs, buying patterns, etc. All that data can then be analyzed through computer applications and the right answer chosen. Therefore, personalized service strategies, which were before only achievable with a small number of customers, suddenly becomes possible on a wide scale. New Product Capabilities Proposition 9: The information-based nature of the electronic commerce processes allows for new products and services to be created or existing ones to be customized in innovative ways. A large source of the business value electronic commerce can provide comes from changing the products and services themselves, in addition to the way they are 15
  20. 20. advertised, ordered and delivered. This is mainly due to the potential of collecting information, which will be used to customize products and services. Mass customization has been used for time now; it endeavors to create specific products and services for each customer based on his or her’s exact needs. The key to mass customization is the ability to store customer preferences, then use a flexible manufacturing technique to adapt a product or service to their particular needs and operate a network of suppliers which will join together to manufacture and deliver a product or service. Finally, another opportunity in mass customization is to have the customers design part of the product or service themselves. New Business Models Proposition 10: Changing industry structures and electronic commerce systems allow for new business models, based on the wide availability of information and its direct distribution to end-customers. Going further than new ways of selling existing products or services and the opportunity for new products or services, there are also new business models emerging. Key among these new business models are new forms of intermediaries, or information brokers. Although it is true that electronic commerce will disintermediate some industries, by directly connecting buyers and sellers, new opportunities are envisioned for actors (NAME) repackaging information. The early examples are currently the directory providers or search engines, such as Yahoo & Lycos. Also, in the car industry, Dealernet offers comparisons between any type of car, with pictures, product specifications and third-party reviews. Nascent Applied Methods & Endeavors is obviously about to engage in a relatively new industry and market, an outgrowth of the phenomenal expansion of the Internet. The industry and market is still in a state of flux, with relatively no market leaders, nationally known providers, or widely recognized programs. Individual educational programs do offer similar employment related educational products and services, but unique to NAME is its ability to customize it services and it is this issue of customization that will make NAME an industry leader. Open Competitive Environment Currently, the level of service NAME is offering in the market is broadly uneven, and similar providers enter and leave the field rapidly. Generally, other firms are not present or marketed on the Internet in any continuing, professional manner. They are not perceived in the marketplace as “businesses” but simply Web sites, and quality and pricing are widely uneven. NAME in the Electronic Commerce and its Competitive Advantage 16
  21. 21. After looking at the sources of value of electronic commerce for NAME, this section shall explore the effects of electronic commerce and its potential to achieve a competitive advantage. NAME will use its seminal work on industrial analysis as a framework, and map our business value components to these factors: 1. three generic competitive strategies for the company; 2. new entrants and substitute products; 3. value system analysis, with the pressures from suppliers and customers. A discussion in more detail will then focus on a few interesting issues such as intermediation, pure price competition and strategic disadvantage (e.g. barriers to entry). NAME’s Framework New entrants Barriers of entry: * economies of scale * capital requirements * access to distribution channels * product differentiation * switching costs * cost disadvantage (e.g. experience Industry competitors 3 generic strategies Suppliers * cost leadership Buyers *differentiation *focus dis-intermediation dis-intermediation new intermediaries Substitutes NAME will formulate here nine propositions of the effect of electronic commerce on the competitive dynamics in its industry. We group these propositions according to three axis: 17
  22. 22. B A Industry competitors C The first axis focuses on the generic strategies of NAME to get a competitive edge, the second looks at the potential for new entrants in the industry and for substitute products and services, while the third axis emphasizes the pressures of customers and suppliers on the value system, and looks at the potential of electronic commerce for disintermediation within the industry as well as the notion of NAME’s strategic disadvantages (barriers). NAME’s Generic Competitive Strategies NAME’s three generic strategies are cost advantage product or service differentiation and focus. Focus means concentrating on one segment of customers and providing them with an extremely well-targeted set of products, excellent service, etc. Our company’s three propositions show’s that NAME’s electronic commerce systems can support such strategies. We refer here to our 10 business value propositions by naming them pn (e.g. p1 is product promotion). Using electronic commerce systems on the Internet (NAME’s similar systems)… proposition A1: … offers a cost advantage through less expensive product promotion (p1), cheaper distribution channels (p2) and direct savings (p3). proposition A2: … helps our company to differentiate itself not only through price but also through product and service innovation (p9), time to market (p4) and actual customer service (p5). proposition A3: … allows for customer focus strategies through better customer relationships (p8). New Entrants and Substitute Products & Services Using electronic commerce systems on the Internet (or NAME’s similar systems)… 18
  23. 23. proposition B1: … allows easier entry for NAME in most electronic markets, traditionally harder to access, thanks to easier product and service promotion (p1), new sales channels (p2) and reduced capital requirements (p3). proposition B2: … allows our company to raise the entry barriers in NAME’s electronic markets through extensive customer learning (p8) (which makes switching information or service vendors more expensive), product and service differentiation (p4, p5, p9) and experience (p7). proposition B3: … helps introducing NAME’s products and services into the electronic markets thanks to product and service innovation (p6). NAME’s Intermediation and Strategic Disadvantage Using electronic commerce systems on the Internet (or NAME’s similar systems)… proposition C1: … makes it easier to suppress a competitive intermediary in a distributed-database network, thanks to direct customer contact (p2) and the use of a publicly shared infrastructure. proposition C2: … makes it easier to become a new intermediary in this company’s industry, by providing an added value service through information management, such as the integration or re-packaging of more basic services. Proposition C3: … makes it possible for NAME to catch up with competitors thanks to the maturity of some technologies and learning experiences (p7), and are critical in not losing ground as market dynamics shift. NAME’s Impact on Intermediation The change in the distribution structure of this industry is an interesting one, in particular the impact on intermediaries. These were traditionally providing an infrastructure such as a sales network (physical places such as shops, specialized personnel, etc.) and were managing the complexity of handling customer request. Electronic commerce can replace some of the functions traditionally performed by these intermediaries. NAME believes that its advance forms of information intermediaries (agents) will soon emerge as a procedural technologies leader thanks to the integration capacity of electronic commerce applications. Barriers to Entry The high costs of purchasing current computer equipment and continually updating expensive training materials and infrastructures makes it difficult for most 19
  24. 24. undercapitalized companies to enter or stay within the complex field of procedural systems design. Moreover, the key to the success of this company lies in its ability to provide a customer adaptation platform of its technologies. The following figure shows some of the factors linked to the adoption of NAME’s technologies by consumers (the factors adversely affecting adoption are in italics). Usage barriers *nee d for an infras tr uctur e to s uppo rt the technology *perceived is sues w ith the technology *learning cur ve Customers Su pplie rs Te chnology * renewal ra te o f * willin gness to in vest su bstituted prod ucts , if a ny * perceived benefits *advertising * direct costs * relu ctance to change *fragmentatio n of s upplier ’s * indirect costs (e.g . training ) * past exp er ience with market s hare similar pr oducts Alt ernative solut ions * c ompeting tech nologies Factors Affecting New Technology Adoption The reluctance of people to change is certainly a key issue here, as is the availability of technological platforms in every home. The emergence of the low-cost “Internet Computer” and of interactive television will undoubtedly change the marketplace. As with most new technologies, adoption is linked to the supply of the right products and services, rather than demand. This is because customers not familiar with the new technologies cannot define their needs, and will understand the technology possibilities only through innovative products and services. Long-Term Opportunities Thus, the long-term outlook for the industry is to develop regionally, nationally and globally known companies, as is currently the case with other business services, such as accounting or employment services. These companies will be able to develop revenues and market share sufficient to sustain the high overhead. National and international franchises or affiliations will make it possible to share infrastructural materials and other vital resources. As noted in previous sections of this business plan, many companies and government agencies use electronic commerce applications to facilitate internal operations and interact seamlessly with their trading partners. While a wide variety of informational transactions occur electronically already, the performance of electronic commerce applications usually 20
  25. 25. requires highly structured, previously established arrangements, and for the most part, dedicated lines and/or Value-Added-Networks (VANs). The resulting costs and necessary lead-times frequently create barriers to investment in and widespread use of electronic commerce applications by some small and medium-sized companies, and inhibit the expansion of electronic commerce beyond large companies and their major trading partners. Despite these barriers, the electronic market place is forming at a rapid pace. By the end of 2005, more than 1,500,000 effective companies will be offering information and services for sale over a combination of Internet and VAN (NAME) service providers. Their ranks are expected to swell to 3,000,000 by 2006 and 10 million by 2010. In addition, the Internet connects some 70 million users in over 130 countries, and at current growth rates it will link to an additional 140 million users by 2007. While the Internet is useful for electronic mail, bulletin boards, and file transfer, it has a number of limitations that must be overcome before it can be deemed suitable for commerce. Some commonly expressed concerns include reliability, security, scalability, and ease-of-use. These problems could be more easily addressed if the Internet was ran as a business enterprise; the enterprise would be accountable to customers from whom it would receive payments for specified goods and services rendered. NAME Can Develop a Strong Position in the Region and the World Wide Web The current lack of industry leaders represents an exceptional opportunity for NAME to develop a dominant presence in the Artificial Life Programming (ALP) arena in the greater Los Angeles area, and the World Wide Web. The company will then be well situated to take advantage of national and international affiliations, either with subcontractors, national & international associations, or network providers. 21
  26. 26. Target Market Market Description Nascent Applied Methods & Endeavors operates in the greater Los Angeles, California, area, targeting world-wide those large, medium and small-sized businesses, as well as individuals or groups with a need to improve their day-to-day operations. The geographic area includes the incorporated cities of; • North America • Central America • South America • Africa • Asia • Europe Immediate Market Size and Trends Los Angeles, with its surrounding communities, is a large and economically healthy area. The city of Los Angeles has a population of approximately 15,000,000, according to 1992 census figures, making it the 2nd largest city in the United States. The Los Angeles Metropolitan Statistical Area (MSA) has an overall population approaching 18,000,000. The business climate has been consistently strong and less affected by downturns in the national economy due to its diverse economic base. The Los Angeles (MSA) includes a number of county seats and is the home to numerous government offices. Also located in the greater Los Angeles area are: • An international airport. • The regional processing centers for numerous nation-wide insurance companies and banks. • The world’s largest shipping port. • A few state universities and numerous colleges and trade schools. • Numerous medical facilities. The economic base has been expanding, and recently the city has announced that it is going to expand its economic base by developing what it calls the San Pedro Corridor over the next few years. The breakdown of employment by industry is approximately: • _33_ % retail and wholesale sales • _17_ % government • _23_ % manufacturing 22
  27. 27. • _27_% education, health, and services Target Customers The businesses Nascent Applied Methods & Endeavors targets for its services have these characteristics: Business attributes; • Over 2 or more employees • Low, medium and high computer use (data processing and retrieval, financials) • Relatively low, medium and high employee turnover; expanding number of employees Industries; • Government • Insurance Firms • Financial/Banking • Accounting Firms • Colleges and Universities • Law Firms • Engineering Firms • Hospitals and Other Medical Facilities • Airlines The Los Angeles Chamber of Commerce estimates that of the more than 6966 companies and institutions with more than 50 employees in the area, at least 213,000 are in the industries listed above. Management personnel in these industries generally view themselves as responsible and professional. They prefer to deal with service companies that present a stable, conservative image. They are generally more sensitive to quality than price and can be considerably influenced by the fact that similar companies will already use the services of NAME. Market Readiness Nascent Applied Methods & Endeavor’s General Contractor of Network Operations (GCNO) conducted a market survey with a selection of targeted individuals and companies. This survey indicated the particular patterns of these individuals and companies in relation to their operational needs: • _67_% indicated a need for employees trained in computer use. • _ 9_% indicated some need for an Enterprise Work Architecture (EWA). • _31_% indicated a need for specialized information retrieval systems. • _43_% indicated a need for continuing training programs. 23
  28. 28. The survey also revealed that such individuals and companies currently spend funds on improving their day-to-day operations and skills: • _38_% specifically have “informational and operational training” budgeted for the current year. • _22_% of these individuals and companies have a “training” amount allotted in their current year’s budget. • _73_% have purchased operational consulting and training services in last year. • _87_% indicated they would purchase more consulting and training than at present if better-quality, more reliable consulting and training were available. Fully _62_% of those using current information retrieval and operational formats said they were either highly unsatisfied or somewhat dissatisfied with their currently organizational and informational arrangements. The level of dissatisfaction is substantially higher than the satisfaction level with other business services (_33_% average dissatisfaction level with services such as accounting and legal). Strategic Opportunities Enterprise Work Architectural design and training services in these companies will be overwhelmingly purchased, recommended, or approved by either the individual employer and employees or the Human Resource/Personnel Director (_31_%), providing a clear target for marketing efforts. National surveys show an increasing percentage of individuals and businesses relying on computers to maintain, analyze, and retrieve information. A high percentage of businesses in the Los Angeles area are in fields with significant dependence on computerized information. Clearly, there is a real need for NAME’s services in the Los Angeles area, an ever expanding and healthy market, and an identifiable way to reach the market. This provides a substantial opportunity for NAME to fill a void in the provision of ALP, EWA, EDI and ECA technology design and services 24
  29. 29. The Competition Competing with Nascent Applied Methods & Endeavors to provide Employment Related Research and Development services to the targeted market (individuals and businesses with substantial use and need of procedural & organizational technologies) are these categories of systems providers: • Individualized organizational development companies. • Local systems analysis groups. • National information providers. • Software developers • Computer network designers. • Programmers from within the targeted companies themselves. • Business consultants in organizational management systems. NAME does not intend to compete with the personal and business development services provided by local, state, and federal government agencies. Specialized educational and development programs held by university and community college classes are generally not competitive in the electronic marketplace; classes are held during the day and are at least adequate, and are not comprised with the knowledge necessary to bring a customer to the fore-front of organizational and informational technology. Local Competitors An unknown number of individual consultants provide a service similar of that of NAME’s, but are not listed in any formal or traditional manner. Overall, only three individuals have developed a substantial presence in the targeted electronic and traditional markets; Thomas Ray, Richard Belew and C. J. “Keith van Rijsbergen. These individuals have performed extensive research in the areas of Artificial Life Programming (ALP) and Enterprise Work Architectures (EWA) in the past few years. To date, only NAME has planned and developed a working commercial plan, product and service. Other Competition Only a selected few (individuals and/or companies) have conducted the research and development necessary to acquire the end-products and services that are housed within the operational programs of NAME, therefore the list of competitors can only be speculated at best. Those individuals or organizations that have similar products and services can be found on the Internet, but are either located outside the state of California or the boundaries of the United States. Lesser known individuals and companies also provide similar products and services, but with out-dated technologies and business strategies. 25
  30. 30. In-house educational and procedural development services taught and implemented by employees of the targeted individual employers and companies varies widely in content, form, and quality. Very few companies have “professional systems developers;” most training and development is provided on an ‘ad hoc’ basis from internal personnel. A conservative interpretation of NAME survey results indicates at least _38_% of such training and development would be contracted out if satisfactory products and services could be obtained. Market Share Distribution In response to a NAME survey, targeted individuals and organizations currently conducting Artificial Life Programming and Enterprise Work Architectures utilize providers as indicated by the pie chart below: Current total market share distribution for Employment Related Educational Research and Development in Los Angeles, California, the United States of America, and the world. California Market Share at 6-¾% Los Angeles Market Share at 5 ¾% U.S. Market Share at 12-½ % Global Market Share at 75% Advantages Over Competition Generally, the advantage NAME has in relation to its competitors are: • Centralized, as opposed to decentralized operational, methods. 26
  31. 31. • Ongoing support and repetitive upgrades, as opposed to those with no support services or any service of this type at all. • Add-on “high productivity” systems and education for customers to realize the maximum potential from employees, computer, networks and the electronic markets; rarely offered by competitors, if at all. • Coordinated, consistent marketing and sales programs. • A professional, business-oriented image. • Systems-oriented, rather than traditional or hierarchical management. • Status as a “Leader in ALP, EWA, ECA and EDI Applications” through network technology, giving credibility and reliability. • High-quality, professional staff and subcontractors. • Availability of centralized sources of information and training via the Internet. • Consistent, high quality information standards. Competitive Positions This is how Nascent Applied Methods & Endeavors ranks the strength of its competitors: 1. Individual AL Programmers (e.g. Thomas Ray, Richard Belew, C. J. “Keith van Rijsbergen, etc.) 2. Individualized organizational development companies. 3. National information providers. 4. Computer network designers. 5. Local systems analysis groups. 6. Other software designers. 7. Business consultants in organizational management systems. 8. Programmers from within the targeted companies themselves. Thomas Ray, Richard Belew and C. J. “Keith van Rijsbergen are positioned to be the strongest competitors, due to their current knowledge and client base, their personality, and their potential to associate with international network operations. However, their current knowledge and research materials are of inconsistent quality, when viewed from a socio-systematic point-of-view. Moreover, Thomas Ray, Richard Belew and C. J. “Keith van Rijsbergen appear to lack sufficient technic and capital for effectively marketing their knowledge and skills through internet technology bases. No other individual or company has either the financial or personnel resources plan necessary to adequately respond to a well-organized, sufficiently funded competitor. NAME will begin negotiating with a number of strategic partners in-order to obtain a sizable market share of potential customers, since it is apparent that no other independent network contractor has a substantial client base or adequate resources to respond to new competition (e.g. Seller Assisted Marketing Plan). Other local & national information and network strategists market their software programs and services either through traditional advertising methods or the Internet, and have little or no ongoing contact with their customers. Their customer base is neither loyal nor particularly satisfied with their programs or service. 27
  32. 32. Barriers to Entry It is relatively difficult for new competitors to enter the Electronic Commerce and ALP field. Substantial start-up costs and research are involved with developing & implementing an Electronic Commerce Application and Artificial Life Programming strategy. Moreover, most individuals and businesses are increasingly selective about which individuals and companies they will allow to access their secured information. However, the long-term outlook for the industry points to global-based ECA & ALP companies. This represents the most substantial threat. Recognizing this infrastructural evolution, NAME plans to affiliate with the highest-quality subcontractors (e.g., ISPs and Educational or Network Solution Providers) through its comprehensive Seller Assisted Marketing Plan (SAMP) as soon as practical. Strategic Opportunities Current developments indicate that ECA & ALP strategies amount to an enabling or facilitating technology that challenges established forms of labor division (esp. among different sectors - e. g. trade, logistics and finance) and induces organizational innovation. The demand for new services and infrastructures initiates the development of industries. As the demand for the co-ordination of inter-organizational issues or electronic data transactions increases, new institutions emerge such as standardization bodies and user groups or established institutions extend their activities, e. g. Chambers of Commerce taking over the role as trustworthy third parties in the area of key management and authorization. • Newly introduced ECA & ALP strategy based services such as product or service enhancement programs change distribution in service oriented industries, e. g. insurance, transport, and grocery wholesale. ECA and ALP strategies are an integral part of the development and proliferation of information logistic services (including for example, reservation, trade and financial information services), which are provided by players from diverse backgrounds-members of existing industries, telecommunication companies, VANS (NAME) - within new infrastructures. As the example of airlines reservation system illustrates, these services amount to an increasingly important source of competitive advantage. • The role of intermediaries- wholesalers, information brokers, sales agents, insurance agents and so forth - is changing. Whereas some are losing their previous functionality, thereby facing the possibility of being forced out of business, others are able to secure and extend their footing by focusing on customer relations and detail customer information. • Electronic trade networks, reflecting the migration from the traditional trading cycle to the electronic sphere are becoming increasingly influential, yet in the same instance, increasingly difficult to govern. There are - for example - plans to 28
  33. 33. encompass trade-related financial information, thus endangering the position of the banking industry if improperly designed and implemented. Furthermore, the market for ECA and ALP services is highly dissatisfied at present as shown by a survey of target industries. The industry level of satisfaction with current service arrangements is shown below: Highly satisfied 8% Somewhat satisfied 18% Somewhat unsatisfied 43% Highly unsatisfied 31% This unusually high dissatisfaction level with current service providers represents a unique opportunity for NAME in a rapidly expanding electronic market. 29
  34. 34. Marketing Plan Nascent Applied Methods & Endeavors distinguishes itself from its competitors by better understanding the needs of its customers. Other electronic commerce companies in the Los Angeles area market their products and services through electronic means as if their customers were just bits of data over the Internet. NAME, on the other hand, knows that the customers are actually human beings with human values, with individual and social needs. Nascent Applied Methods & Endeavors Meets Customer’s Needs Employers have slightly different motivations than the employees themselves. Although the employer, as well as the employee, wants high quality, easy-to-understand electronic commerce applications and artificial life programs, their mutual involvement within their related business activities may also require: • Increased overall productivity. • One network to deal with for all of their electronic commerce needs. • Ongoing educational support for all operational personnel. • The convenience of not having to disrupt the customer’s workplace while implementing an ECA, EWA and ALP strategy. These customers want to deal with an ALP, EWA and ECA company with which they can have an ongoing relationship. NAME incorporates reassurance and a relationship in all of its marketing efforts. The slogan “Let MAN Be the NAME of Your GAME” is designed to imply not only that the services will be comprehensible, but also that NAME is able to maintain ongoing communications with its customers. Also, as a play on the word “NAME,” the title is designed to be memorable, with the implication that the company is instantly recognizable in its dealings with EDI, ECA, EWA and ALP. Nascent Applied Methods & Endeavors Emphasizes Education and Electronic Markets NAME emphasizes high-productivity training and electronic market applications. This is accomplished by not only selling the company’s products and services at the introductory, basic user-level, but additional, advanced products and services to substantially increase the benefits to the client. This additional training expands the number of services NAME can sell to each customer, and increases the revenues produced from each sale. 30
  35. 35. Since the average service contract is projected at between $43,000 and $1,019,516 per client and educational session, and the goal is to target individuals and companies for regularly repeated sessions, most of the marketing will be done by both the Internet, and by face-to-face solicitation. An outside sales force to consists of the network representative subcontractors - of whom shall have global experience in selling to the targeted market - will call on entrepreneurs, sole proprietors, and individual business personnel to introduce the company and make sales presentations. Appointments are generally made by the network representative marketing chiefs, except in those cases where the General Contractor of Network Operations has existing relationships with potential customers. Organization of Sales Team All company personnel and network operatives are considered members of the sales team. The company or network registrars, who takes electronic registrations, is educated in corporate manners and order solicitation, and shall be given incentive gifts for registering targeted numbers of clients for services rendered. Even the systems programmers themselves will participate in monthly sales meetings. All employees and network operatives receive financial education bonuses if the network as a whole reaches its overall sales goals. Quality printed and downloadable sales material has been prepared (see the Appendices) to support personal sales calls and for mailing in responses to electronic request. (The Network Registrars are trained to attempt to set up personal sales presentations for larger business clients phoning in). In the first few months of operations, funds are budgeted to produce a computerized video presentation (multi-media) to augment the printed materials and enhance the sense of professionalism and computer expertise. Multiple Web Site Program Key Multiple websites are the key in the company’s marketing. A description of NAME’s services & programs are maintained through the network’s subcontracted websites and are targeted at potential customers. Once a month, the web sites are updated to reflect any changes in NAME’s programs, prices or service. The company’s advertising is aimed at supporting its other marketing and sales efforts rather than just securing actual sales. Two main vehicles are used: the traditional methods of advertising through the company’s representative networks, (e.g. newspapers, t. v., radio, etc.), and through the multiple web sites of this company’s subcontractors. Cooperative Marketing Plans A number of cooperative marketing activities are planned with the company’s network of subcontractors. These include advertisements through the company’s seller assisted 31
  36. 36. marketing plan, and sponsoring events to introduce business customers to network services. The goal of such efforts is to give NAME added exposure to potential customers and increased stature through being associated with a host of information providers. The company will soon be negotiating with a number of network providers (e.g. subcontracted providers of information, equipment and services), so that the company may benefit from their established client base. Nascent Applied Methods & Endeavors will also become a member of the Los Angeles and Orange County Chamber of Commerce and will participate in the Chamber’s sponsored trade shows, which features providers of business services and products. 32
  37. 37. Operations At the core of Nascent Applied Methods & Endeavors strategic concepts is the implementation of Employment Related Educational Research & Development. NAME is made up of a network of electronic marketing subcontractors working together to provide consultation and educational services. The NAME network includes technical and educational representatives from a number of diverse backgrounds according to their own expertise. The NAME network draws on the expertise of its members to provide customers with the latest information in ECA, EWA & ALP strategies. We can assist the client in research and development, engineering, manufacturing, and logistics. NAME specializes in automated business practices, including business process re-engineering, information management, electronic data interchange, and electronic commerce. There will also be other globally located Electronic Commerce Resource Systems, each having a different specialty to best meet the customer needs; 1. Automated Business Practices 2. EDI/ECA/EWA/ALP 3. Outreach and Consultation 4. Strategic Evaluation 5. Education 6. Situation and Procedural Mapping Automated Business Practices Automated Business Practices (ABP) are techniques that streamline business functions through the use of computers, machines and skilled human resources. NAME serves as a facilitator of automated business practices, providing explanations, training, and demonstrations of information management, and electronic commerce (EC). NAME also serves as a point of contact for explaining different methods of information management (IMS), electronic data interchange (EDI), and electronic commerce (EC). Nascent Applied Methods & Endeavors is actively addressing the technical issues affecting the customer. These include: • Automated Business Practices: using appropriate automation as a tool in decision making and information handling. The goal is to use new technologies to their fullest extent to achieve a business advantage. Such technologies include: Bulletin Board Systems, Value Added Networks (VAN), Local Area Networks (LAN), Wide Area Networks (WAN), the Internet, Fax and Electronic Mail (E-Mail). 33
  38. 38. • Electronic Commerce and EDI: bringing to the globe new markets and trading partners through EDI by helping the customer apply electronic commerce sensibly. • Scanning and Conversion: transforming hard copy data into an electronic form so it can be used more efficiently and cost effective. NAME maintains a common database of past experiences, and lessons learned in relation to automated business practices. This database provides a valuable resource in identifying solutions to client issues. The subcontractors of NAME are globally located and all have various specialties. These specialties include: networking technologies, scanning and conversion, information technologies, automated manufacturing, automated design and commercial technologies. Electronic Commerce Adopting EC & EDI can require a business to change its corporate culture, giving up old ways of doing business and old expectations. This century has produced many such changes already, as phone calls replace office calls and faxes replaces couriers and mail. Each such change occurred where it made business sense - and that is the recognition required of business. EC & EDI can make good business sense and businesses must be open to that responsibility. Substantial returns can reward businesses which interests are well considered toward change. EC & EDI offer competitive advantages, improved cash flow, expanded markets, and greater profitability for companies that implement them wisely. Outreach and Consultation Outreach In addition to promoting, and facilitating automated business practice initiatives within industry, government, and academia, NAME can: • Provide demonstrations of electronic commerce, enterprise work architectures, and related technologies. • Perform studies and analyses to identify how electronic commerce and information management can improve both performance and profits. • Conduct a business case analysis of a customer organization to determine the functional and economic impact of implementing EC technologies. • Assemble a team of business and technical specialists to address a customer’s situation in depth. • Assist the customer in developing prototype solutions using ABP and business process re-engineering. Consultation 34
  39. 39. NAME offers help in the technical areas concerning automated business practices. Such areas include: • The use of on-line and network data sources to support our clients. • Database tools for the collection and analysis of lessons from previous consultations with people and businesses across various industries. • Helping customers focus on important hardware and software features to assists in making “smart” purchasing decisions. • Hands-on experience with ABP through evaluating and incorporating them into NAME’s business operations. • The latest developments in ABP. • EDI, EWA and ALP software, hardware, and implementation. • Database design and implementation. • Electronic document management. • Scanning and conversion. • Local area networks (LAN) and wide area networks (WAN). • Multimedia. Training NAME provides seminars on information management, business process re-engineering, and electronic commerce. These seminars are available at both an NAME production site and at the customer’s facility. The available classes include: • Electronic Commerce/EDI Orientation • VAN Orientation • Business Needs Analysis • Process Management in a Technology Environment • Data In a Business Environment Costs and Time Effective Programs Nascent Applied Methods & Endeavors has developed a comprehensive plan containing specific time-phased recommendations, options, and actions including estimates of required resources. The plan’s purpose is to achieve the most rapid implementation of an electronic commerce application within a customer’s operational domain. The plan will address significant issues prioritized by the estimated cost to resolve them and specific initiatives to publicize and educate the customer on ECA contracting activities; and provides a two-year execution as directed by the General Contractor of Network Operations (GCNO). NAME’s plan offers benefits to both Government and Industry. The government and industrial procurement community, including their trading partners, face declining budgets, reductions in manpower and shrinking business bases. Survival in this challenging environment requires re-thinking traditional procurement methods, with emphasis on reduced inventories, and increased operational efficiency and effectiveness. 35
  40. 40. EDI’s inherent benefits are well documented. Therefore, rather than duplicate the results of previous studies, NAME performed an integrated assessment of the specific benefits that a customer will realize from implementing an ECA/EDI. These benefits for both individuals and industry are identified and categorized under mutual and governmental benefits, and mutual reengineering opportunities. The categories of programs and the applicable benefits are as follows: • Mutual Benefits 1. Significantly increases visibility of requirements and requiring activities. Such visibility will expand the trading partner’s market from two perspectives; both in accessibility to a larger volume of items and access to more customer purchasing offices. Increased visibility of requirements should increase the trading partner’s opportunities to market their goods and services to the network. The visibility of the network’s small purchase requirements will expand exponentially for the trading partner’s as the number of company buying offices transitioning to EDI/EWA & ALP increases. This allows the network trading partners greater opportunities to quote and compete. Also, a vendor will now have the opportunity to see the results of the proceeding procurement of an item or service because the network will be electronically posting the award results of all its EDI solicitations. This information will allow the company (network) trading partners to compare and analyze their knowledge of their competitors and their prices. This greater market visibility and new analysis will improve the network’s trading partners abilities to adjust to an improving or declining network business base. 2. Single point registration. The deployment of EDI/EWA and ALP will establish a single point registration that will allow the company trading partners to register one time for all network-buying offices. 3. Electronic payment processing. EDI’s automation of data required to support the payment process will allow for better information flow across the network procurement and logistics functions to the company. The automation of this data will greatly increase the sorting and compiling capabilities within the company. In addition to the payment cycle timesavings within the company, the trading partners will benefit from reduced mailing time of the pay related documents. EDI’s simple departure from the paper based payment process will increase the ease and speed with which payment data can be handled. • Network Benefits 1. Greater buyer productivity. 36
  41. 41. Historically, the network would have been inundated with clerical functions associated with the processing of Subcontractural Request for Quotes (SRFQ). This redundant repetitive operation would have been compounded over time due to the increases in the procedural requirements of the documentation associated with SRFQs and Purchase Orders (POs). Further impact to the contracting community would have been exacerbated by the reduction or increase in personnel within the network and governmental customers, particularly the clerical sector of the workplace, which historically performed these duties for the buyers and contracting officers. Savings in processing times will be realized in a more efficient execution of SRFQs, responses back from the General Contractor and subsequent POs. This electronic transmission of these documents will eliminate many of the repetitive and redundant clerical entries such as a significant reduction in reproduction, mailing, handling, telephone contracts, and repetitive data entry to legacy systems. With this capability, the network will be able to process more SRFQs, in an efficient manner and with higher quality, thereby allowing time for the more complex decision process required by the network. The contract writing system’s ability to collect SRFQs and automatically abstract the required quotes for the network will additionally enhance the network productivity, as well as provide proper analysis based upon a subcontractor’s performance, and quality items and services procured for the company (network). 2. More complete picture of requirements to Industry. The visibility of the company small purchase requirements will expand exponentially for the trading partners as the number of network customers transition to EDI/EWA/ECA and ALP. This allows the network trading partners greater opportunities to quote and compete. 3. Lower item prices. Through the expansion of the awareness of NAME’s requirements to subcontractors (trading partners), the present initiatives have indicated a reduction in item and service prices to the network as a whole. This is probable when the competitive items and services are basically advertised to all potential offerors through ECA/EWA/EDI and ALP versus the process that primarily is within the local area of the base installation. In addition, there will be new business opportunities for all, local area subcontractors will have access to all network requirements, and subcontractors not collocated with an installation will have the same information. It is projected that there will be an initial reduction in competitive item and service prices in stock or procedural classes, and it is probable that this reduction will level off after a period of implementation. The last purchase price of the item or service will be available for the subcontractor’s review prior to the submission of a SRFQ. This will circumvent the quoting on items and services in which the subcontractor is not competitive. Additional opportunities will be afforded to the subcontractors to expand their product and service lines on required items or services that historically have limited quotes received, or no quotes received at all. 37
  42. 42. 4. Reduced lead times. A reduction in lead-time has been experienced through the utilized of EC/EDI in contracting through the network’s existing initiatives. This primarily attributed to the fact that the requirement to process the SRFQ through an administrative area, than through the postal system to the subcontractor has been eliminated. The availability of NAME’s execution of the transmission of the SRFQ from the workstation from one to one, one to many, or one to all, is at the touch of the keyboard. In addition, the subcontractor receives the SRFQ immediately, if they were on the original source list, or a subcontractor may request the solicitation, via the computer, without expending additional resources. The execution of NAME’s implementation plan will provide this improved process to more sites and will further reduce the administrative lead times associated with the processing of SRFQs. In addition, it is speculated that upon the completion of the four year implementation plan, the period of time the solicitation is required to be open for quotes could be substantially reduced. 5. Reduced inventories. Our present systems will generate requirements from the using organizations, and due to the elongated processing times, often require the using organization to request procurements that will provide a substantial inventory of the service or item. The warehousing of these items or services until they are requisitioned out of stock or used is very expensive. As we move into a full implementation of EC/EDI in contracting, with the reduced administrative lead-times, we can anticipate a lesser need for large inventories. As Contracting Officers established contractual instruments for repetitive required items and services, and provide the inter-connectivity to their customers, an additional reduction in lead-time will be experienced, as well as reduced inventories. Depending upon the availability of the item or service, a “Just-In-Time” procurement will facilitate the user, thus, eliminating the need for an inventory. • Mutual reengineering opportunities 1. Reduced administrative workload and the use of multi-use databases. A generic small purchase of an educational item or service routinely requires an extensive network file to document the purchase and support payment of a transaction. This multiplied by almost 11million purchases and delivery orders made by the network adds up to over 100,000 reams of paper. Normal distribution of these actions consumes an additional 500,000 reams of paper. EDI/EWA & ALP will automate this collection process and provide for databases that can be shared by the separate functional workstations. Electronic storage of this data will also facilitate less expensive archiving, retrieval, and audit and analysis of the small purchase data. 38
  43. 43. 2. Automated linkage from the company’s acquisition systems to the network’s trading partner systems. From the trading partners perspective, the automation of the network’s purchase orders provides an opportunity to interface directly with the trading partner’s other internal automated systems that support the order fulfillment process. This can reduce the administrative burden associated with invoicing, payment, transportation, and restocking. Depending on the sophistication of the network’s material requirement planning system, EDI/EWA and ALP will even support an automated interface. Such interfaces enhance accurate reporting of sales/orders to the network’s host CPUs. 3. Electronic ordering and bar coding. Measurements of EDI/EWA & ALP implementation recommended by NAME focuses on macro process improvements that impact every network component. Initially, the GCNO explored the possible use of more than 50 measures to capture both the impact of the technology deployment and its associated cost savings, as well as the depth of this new technology’s employment in the procurement process. NAME eliminated most of these measures for the following reasons. First, the decision to deploy and invest will have already been made. That decision is based upon a substantial experience base both in the public and private sector, that EDI, its peripheral processes and opportunities, has conclusively proven to merit the investment provided normal reasoning is used in its application. This makes the measurement of the savings redundant in proving, once again, that the application of this technology saves money. Second, regardless of the findings, a manager cannot manage sunk costs, which is what the implementation and new equipment costs represent once an EDI & ECA are implemented. Third, many of the current measures used by the procurement managers will provide insight to the impact of EDI on customer productivity and procurement lead-time; therefore the recommendation of new measures is unnecessary. Finally, the procurement workload continues to increase. The addition of new measures should be kept to the absolute minimum and only in areas where current automated collection techniques can be used. Additional key measures required to determine the extent of ECA/EDI/EWA and ALP implementation are as follows: • percentage of total actions - EDI; • percentage of SRFQs receiving no responses; • percentage of total purchase dollars - EDI; and • number of active EDI trading partners. As discussed, analysis performed by the General Contractor of Network Operations showed that EDI would increase the efficiencies and effectiveness of the procurement process. Improvements will increase, over time, as procurement processes are re- engineered and more subcontractors and customers utilize this method of contracting for products and services. 39