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UNIVERSITE LIBRE DE BRUXELLES. eBusiness - Introduction Pascale Vande Velde. Solvay Business School. SEMINAIRE DE TECHNOLOGIES DE L’INFORMATION ET DE LA COMMUNICATION. GEST 116. Content of eBusiness course. Introduction – Part I. Introduction – Part II. Payments & security. - PowerPoint PPT Presentation
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Solvay Business School
SEMINAIRE DE TECHNOLOGIES DE L’INFORMATION ET DE
LA COMMUNICATION
UNIVERSITELIBRE DEBRUXELLES
eBusiness - IntroductioneBusiness - IntroductionPascale Vande VeldePascale Vande Velde
GEST 116GEST 116
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
2
Introduction – Part I
Introduction – Part II
Payments & security
Supply chain management
Content of eBusiness courseContent of eBusiness course
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
3
Trends, facts and figures
eBusiness value drivers
Application areas for eBusiness
Electronic marketplaces
AgendaAgenda
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
4
The internet economy boom is overThe internet economy boom is over
0
200
400
600
800
1000
1200
Nov-1996
Nov-1997
Nov-1998
Nov-1999
Nov-2000
Nov-2001
Cisco
Dow Jones
Microsoft
Implosion
Boom
1996: Yahoo! quote triples on first day of trading
1999: 188 IPO's double in value on first day (compared to 39 during the previous 24 years combined)
2000: AOL buys Time Warner for USD 100+ Bn
2001: 100.000+ lay-offs in internet-related companies (50.000 in 2000) ; 200+ US dot-coms companies go bankrupt in S1 2001
Post 2001 : consolidation of some players; market rationalization continues
In 2003, Amazon books its first net profit
1996: Yahoo! quote triples on first day of trading
1999: 188 IPO's double in value on first day (compared to 39 during the previous 24 years combined)
2000: AOL buys Time Warner for USD 100+ Bn
2001: 100.000+ lay-offs in internet-related companies (50.000 in 2000) ; 200+ US dot-coms companies go bankrupt in S1 2001
Post 2001 : consolidation of some players; market rationalization continues
In 2003, Amazon books its first net profit
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
5
Key drivers for the penetration of ebusinessKey drivers for the penetration of ebusiness
Increasing Consumer Penetration
Cooperative Regulatory Environment
Expanding Technology Infrastructure
Compelling Business Value
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
6
Source: Morgan Stanley, “The Internet Advertising Report,” 1998
Years to 50 Million U.S. Users
Millions of
Users
Internet(World Wide Web)
1930
1920
1940
1950
1970
1980
1990
1925
1935
1945
1955
1960
1965
1975
1985
1995
120
100
80
60
40
20
0
TV
CableRadio
Telephone
TThe recent adoption of the Internet has he recent adoption of the Internet has been truly amazing!been truly amazing!
Medium Years Timeframe
Telephone 25 1920-1945
Radio 38 1922-1960
TV 13 1951-1964
Cable 10 1976-1986
WWW 5 1993-1998
Adoption of Consumer Technologies in U.S.
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
7
97
120
140157
172184
196
46%44%40%
36%31%
49%
25%
0
20
40
60
80
100
120
140
160
180
200
2000 2001 2002 2003 2004 2005 2006
Onl
ine
Use
rs
0%
20%
40%
60%
80%
100%
Per
cent
age
of E
urop
ean
P
opul
atio
n O
nlin
e
Online users in Europe
Percentage of European population online
29
23
14 14
8 76
3 3 3 3 2 13 101
34%
10%
32%
13%
42%
60%
27%
35%
53%
42%
62%
19%
47%
23%27%
38%
35%
0
10
20
30
40
50
0%
20%
40%
60%
80%
100%
Online users
Online penetration (users)
Online users by country 2001
Online usage is growing fast in EuropeOnline usage is growing fast in Europe
Online users in Europe 2000-2006
By end 2006, about 50% of the European population will use internet at least one hour per month. The growth curve will then become fairly flat
Internet penetration is the highest in Scandinavian countries with more than 60% of the population online in 2001. Southern Europe lags behind (e.g. Greece, Portugal, Spain, France)
Penetration in Belgium was moderate compared to the European average in 2001 but increased very much in the meantime from 27 to 48%
Source: Jupiter MMXI Internet Population Model, June 2002
in millions
Onl
ine
Use
rs
Onl
ine
Pe
ne
trat
ion
(us
ers
)
in millions
NB : online usage measurement based on use of internet at least one hour per month (excluding email). Extrapolation based on two surveys (2,000 phone interviews + 60,000 internet questionnaires)
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
8
Belgium is catching up quicklyBelgium is catching up quickly
Online users in Belgium 2000-2006
In 2003, about 48% of the Belgian population (> 15 years old) uses internet at least one hour per month
In December 2003, about 4,0 million Belgians used internet at least one hour per month, which represented a 25% increase compared to October 2002
55% of regular home internet users use a high speed connection. It places Belgium amongst the top in terms of broadband penetration in Europe (with Sweden)
The number of connections is stagnating but the mix is evolving towards broadband (cable + ADSL)
4,0 4,4 4,7
3,63,22,82,3
23%
45%
27% 31%35%
39%43%
0
2
4
6
8
10
12
14
2000 2001 2002 2003 2004 2005 2006
Onl
ine
Use
rs
0%
20%
40%
60%
80%
100%
Per
cent
age
of B
elgi
an
P
opul
atio
n O
nlin
e
Online users in Belgium
Percentage of Belgian population online
in millions
Sources: Jupiter MMXI Internet Population Model, June 2002, InSites Internet Mapping, April 2002 Source: ISPA, 14th market study, September 30th 2002
Number of private connections in Belgium
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
mrt
/01
ap
r/0
1
me
i/01
jun
/01
jul/0
1
au
g/0
1
sep
/01
okt
/01
no
v/0
1
de
c/0
1
jan
/02
feb
/02
mrt
/02
ap
r/0
2
me
i/02
jun
/02
jul/0
2
au
g/0
2
sep
/02
Free active connections Paying residential PSTN and ISDN
Paying residential broadband
1,49 million connections for 4 million households
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
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Real growth is in Business-to-BusinessReal growth is in Business-to-Business
By end 2005, online B2B spending in Western Europe will be worth close to €3 trillion, with
Germany and the UK accounting for over half of the total
Computer/telecom goods and aerospace industry will be the most impacted by the growth of the
B2B commerce
Online B2B spending in Western Europe 2000-2005
Online B2B spending by industry 2000-2006
€ 205
€ 500
€ 1.805
€ 2.917
€ 63
€ 1.025
17%
11%
4%7%
1% 2%€ 0
€ 500
€ 1.000
€ 1.500
€ 2.000
€ 2.500
€ 3.000
2000 2001 2002 2003 2004 2005
0%
10%
20%
30%
40%
50%
Online B-to-B trade Channel shift
Per
cen
tag
e o
f M
ark
et O
nlin
e
Onl
ine
B-t
o-B
Sp
end
ing
Source: Jupiter European Business-to-Business Forecasts 2000-2005, September 2001
Belgium 2001: € 3 Billion
2005: € 50 Billion
Belgium 2001: € 3 Billion
2005: € 50 Billion
in billions
0%
10%
20%
30%
40%
50%
60%
70%
Computer and telecomequipment
8% 8% 15% 30% 41% 52% 60%
Aerospace and defense 8% 11% 17% 26% 35% 45% 54%
Motor vehicles and parts 7% 10% 16% 24% 33% 42% 50%
Metals and mining 6% 6% 11% 21% 28% 36% 43%
Chemicals 6% 7% 8% 12% 26% 33% 39%
2000 2001 2002 2003 2004 2005 2006
Source: Jupiter Internet B-to-B Commerce Model, June 2000, (US only)
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
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The B2C market is growing very fast but The B2C market is growing very fast but revenues base is smallerrevenues base is smaller
In 2002, online B2C spending in Western Europe is worth €20 billion, which accounts for 4% of the B2B market. Online B2C spending is forecasted to amount to €80 billion in 2007
By end 2007, about 4% of total retail commerce should be done via the internet
Travel, grocery, PCs and books are the most frequently goods bought on the internet
In 2003, Belgian internet surfers bought for about 0,8 bn EUR on the internet (3-4 orders a year @ 135 EUR/order). Most purchased goods are books and CDs. 680,000 Belgians have booked some travels via the internet in 2003 – Source : Insites Consulting
Online B2C spending in Western Europe 2002 and 2007
Online B2C spending mix 2002
Source: Jupiter MMXI Internet Commerce Model, August 2002
6,4 21,7
20,4
11,4
5
3,8
2,8
4,2
1,8
1,7
1,7
1,4
1,3
1
0,6
4,5
2,4
1,1
1
0,9
0,5
0,6
0,8
0,4
0,4
0,3
0,2
0,1
0 5 10 15 20 25
UK
Germany
France
Italy
Netherlands
Sweden
Spain
Norway
Denmark
Switzerland
Finland
Austria
Belgium
Portugal
Total online spending (Bio €)
2002 2007
€€20 Bio20 Bio in 2002in 2002€€20 Bio20 Bio in 2002in 2002
5,8 5,6 5,53,4
2,2 2,1 1,9 1,4
10,5
26,1
11,713%
2%2%3%3%
4%7%7%7%
33%
15%
0
5
10
15
20
25
30
Trave
l
Groce
ries
PCs
Books
Appar
el
Elect
ronic
s
Softw
are
Perip
heral
s
Musi
c
Ticke
ts
Other
s
0%
5%
10%
15%
20%
25%
30%
35%
Online spending % of total online spending
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
11
B2B B2B versus Bversus B2C eCommerce2C eCommerce
Retail consumers are:Business customers are:
Access/ familiarity
Confidence – Comfortable with electronic transactions
– Lingering reservations about transacting on-line
Incentive
– More brand conscious
– Focused on value and price
– More cost conscious
– More “bottom line” oriented
– Still lacking high speed internet access at home
– Challenged by rapidly evolving technology
– Technology enabled on a broad scale
– Readily accessible to professional training
The Greater Growth in B2B eCommerce Is Driven by Fundamental Differences Between B2B and B2C eCommerce
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
12
Telecommunication developments are key Telecommunication developments are key to boost internet penetration in Europeto boost internet penetration in Europe
By end 2007, about 22% of the European households should use a broadband connection (ADSL, cable, fiber) to access internet thanks to the democratisation/penetration of ADSL and an increased use of existing cable infrastructure
Wireless phones will also become an increasing internet access gateway in Europe when data transmission capacity increases (3rd generation mobiles)
Broadband penetration in Western Europe 2001-2007
Wireless penetration in Western Europe 2001-2006
3.515
7.249
11.687
30.481
37.070
23.729
17.27122%
18%14%
7%
11%
2%5%
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
2001 2002 2003 2004 2005 2006 2007
0%
10%
20%
30%
40%
50%
Broadband Households Broadband Household Penetration
Per
cen
tag
e o
f H
ou
seh
old
s
Bro
ad
ba
nd H
ouse
hol
ds
in thousands
Belgium has one of the highestbroadband penetration from 9% in
2001 to 28% in 2007
Belgium has one of the highestbroadband penetration from 9% in
2001 to 28% in 2007
Sources: Jupiter MMXI Broadband Internet Model, October 2001 (Western Europe only)
InSites, Belgium is European frontrunner in broadband Internet use, November 2001
291 294276 285
261
237
74%73%72%70%
60%66%
0
50
100
150
200
250
300
2001 2002 2003 2004 2005 2006
0%
20%
40%
60%
80%
100%
Wireless subscribers in western Europe Wireless penetration
Per
cen
tag
e o
f W
ire
less
Pe
netr
atio
n
Num
ber
of
Wir
ele
ss S
ub
scri
be
rs in
We
ste
rn E
uro
pe
Source: Jupiter MMXI European Wireless Model, 11/01 (Western Europe only)
in millions
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
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Telecommunication developments are key Telecommunication developments are key to boost internet penetration in Europe/2to boost internet penetration in Europe/2
Internet-enabled handsets (UMTS, WAP, PAD…) penetration increases
However, use of internet-enabled handsets to access internet and trade via the internet remains limited (a.o. WAP technology did not meet expectations)
Data transmission capacity increase is expected to boost the use of third generation phones in the coming years
Internet-enabled handsets and penetration in Western Europe 2001-2006
Active wireless internet users in Western Europe 2001-2006
in millions
Source: Jupiter MMXI European Wireless Model, November 2001 (Western Europe only)
171 174
138
167
82
32
59%59%59%
50%
13%
32%
0
50
100
150
200
2001 2002 2003 2004 2005 2006
0%
20%
40%
60%
80%
100%
Number of Internet-enabled handsets
Penetration of Internet-enabled handsets
Pen
etr
atio
n o
f In
tern
et-E
nab
led
Ha
nd
sets
Num
ber
of
Inte
rne
t-E
na
ble
d
H
and
sets
in W
este
rn E
uro
pe
87 90
7
22
75
48
31%
8%3%
17%
26%30%
0
20
40
60
80
100
2001 2002 2003 2004 2005 2006
0%
20%
40%
60%
80%
100%
Active wireless Internet users
Percentage of active wireless subscribers
in millions
Per
cen
tag
e o
f W
ire
less
Su
bscr
ibe
rs
Who
Are
Act
ive
Use
rs
Num
ber
of
Act
ive
Wir
ele
ss I
nte
rne
t U
sers
in
We
ste
rn E
uro
pe
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
14
Digital TV is another technology facilitating Digital TV is another technology facilitating internet accessinternet access
TV Households in Western Europe 1999
Households (in millions)
Device Platform Features
Analog TV One-way transmission
Analog signal (via satellite with set-top box)
DTV One-way transmission
Digital signal and set-top box
iDTV Two-way interactive services
Digital signal and set-top box
Source: Jupiter Strategic Planning Services: European Digital TV, markets and platforms, 2000
Average Penetration of broadcast platforms in Western Europe:
Terrestrial:50%Cable: 31%
Satellite: 26,8%
0,0
0,875
0,11,9
44
5,53,0
18
0,0 15,0 30,0 45,0 60,0 75,0
Terrestrial
Cable
Satellite
iDTV DTV Analog
0
20
40
60
80
100
120
140
160
180
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
iDTV DTV Analog-only
45
108
Hou
seh
old
s (i
n m
illio
ns)
TV Households in Western Europe 1999-2008
IDTV penetration is relying on both interactive device platforms (PC’s, TV’s, PDA, smartphones…) and broadcasts platforms (terrestrial, cable, satellite)
Increase of broadcasters’bandwith
New services and revenue streams
New content
In the long-term, nearly all DTV households will be iDTV-enabled
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
15
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Digital Terrestrial Digital Cable Digital Satellite All Analog
Digital TV is another technology facilitating Digital TV is another technology facilitating internet access/2internet access/2
Source: Jupiter Strategic Planning Services: European Digital TV, markets and platforms, 2000
Digital and Analog TV penetration in Western Europe 1999-2008
2001 split between households:
All analog: 137,5 MDigital Terrestrial: 0,8 MDigital Cable: 2 MDigital Satellite: 8,5M
2008 split between households:
All analog: 44,8 MDigital Terrestrial: 29,9MDigital Cable: 39,4 MDigital Satellite: 38,8M
Low takeoff is observed due to high investments required for the solution:
- Costs to broadcasters of DTV transmission (license, access, bandwidth,…)
- Conversion and upgrade costs for new or adapted modulation standard (e.g.:$7-10M for a
new station, $1-3M to convert an existing one)
- Development and manufacturing costs (station, antenna, components,broadband devices,
broadcast platforms,…)
- Partnerships costs (opportunity costs due to various intermediaries)
- Uncertainty of consumer demand: cultural and socio-demographical aspects
- Broadband and Telco's market national and regional characteristics
- Cable operators don’t have the money (huge debt structure)
- Limited opportunities in iTV fees (retail market)
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
16
Cooperative Regulatory EnvironmentCooperative Regulatory Environment
Pricing of internet services and free competition
Dial up
ADSL
Internet security (e.g. payments)
Legal recognition of digital signatures
Application of commercial laws
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
17
Trends, facts and figures
eBusiness value drivers
Application areas for eBusiness
Electronic marketplaces
AgendaAgenda
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
18
Value driversValue drivers
Value Creation Levers Opportunities Benefits
ValueValueCreationCreation
Sales Volume
Price
Sales & General admin. costs
COGS
Reach / access to new marketsNew value propositionsCreation of new product / servicesDeeper customer relationships
Brand image buildingDemand-supply matchingEffective customer segmentation
Sourcing price reductionBetter price-value matchingCost-to-serve improvement
Transaction cost reduction Logistics network efficiencyEffective marketingEnforcing company policy compliance
Logistics network productivityimprovementFleet productivity improvement
Inventory level optimizationTime-to-market reductionForecast accuracy improvement
Working Capital
Fixed Assets
RevenueEnhancement
CostReduction
Asset Intensity Reduction
Revenueenhancements
Typical: 10-20%
Best case: 55%
Cost reduction
Typical: 20-45%
Best case: 70%
Asset intensityreduction
Typical: 20-60%
Best case:90%
Share PriceShare PriceEnhance External Communication
Increase Brand AcceptanceMarket
Perception
See other leversOperational & Financial
Performance
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
19
Revenues driversRevenues drivers
Revenue
Enhancement
New Value Propositions
Benefits
New Channels/Reach
Individualized Customer Lifecycle
Customized offerings (one-to-one marketing) Value pricing Individualized shop/buy/own experience Micro-transactions Intelligent products/services
eCommerce Drivers
Electronic advertising
Electronic merchandising
Electronic sales
Electronic servicing/support
Improved contact rates
Improved targeting
Improved consideration rates
Improved closing rates (100% Dell)
Higher share of wallet (up to 300% e.g. Schwab)
Improved customer retention
V.1.4 Solvay Business School
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Cost driversCost drivers
Typical Savings Level
eBusiness
ExternalInteractions
Selling toCustomers
Buying fromSuppliers
InternalInteractions
Asset Utilization
OrganizationalEfficiency
Category
20-30%
20-30%
50-80%
25-50%
10-25%
20-30%
5-15%
20-50%
30-45%
30-55%
Human Resource Management
Technology Facilitated Training
IT Maintenance/Support
Supply Chain Operating Costs
Inventory Carrying Cost
Procurement Process
Procurement Spend
Sales and Marketing
Customer Service
Technical Support
ROUGH ESTIMATES
V.1.4 Solvay Business School
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Asset Intensity Reduction
Increase Working Capital Turnover
Asset Intensity Asset Intensity driversdrivers
Reduced Physical Infrastructure
Improved inventory turns from value network compression
Increased receivable turns from eCommerce enabled settlement
BenefitseCommerce Drivers
Reduced need for physical storefront
Reduced need for warehousing
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
22
Trends, facts and figures
eBusiness value drivers
Application areas for eBusiness
Electronic marketplaces
AgendaAgenda
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
23
eSupply Side eDemand Side
eMediary
eEnterprise
After Sales
SupportSalesMarketingProductionProcurementProduct
Development
Application areas for eBusinessApplication areas for eBusiness
V.1.4 Solvay Business School
Technologies de l’information et deLa communication
24
eSupply Side eDemand Side
eMediary
eEnterprise
After Sales
SupportSalesMarketingProductionProcurementProduct
Development
Supply side eSupply side eBusinessBusiness
Supply side B2B eCommerce offers tremendous opportunities for cost reduction and operational improvements
V.1.4 Solvay Business School
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Supply Side eCommerce Opportunities Definition
eProcurement Purchasing of hard goods and services Supplier selection Order placement Payment
eSupply Chain Management Management of the supply process Demand/Supply forecasting Inventory management Quality assurance
eEnabled Collaborative Engineering and Design
Work with suppliers to design and engineer products for competitive advantage Joint product development Prototype development Testing
SSupply-side eupply-side eBusinessBusiness
V.1.4 Solvay Business School
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Fiat Reduced Product Development Costs by Fiat Reduced Product Development Costs by Testing Auto Design Concepts on the InternetTesting Auto Design Concepts on the Internet
Objective
Description
Results
Evaluate users’ needs for the next generation Punto, Fiat’s best selling car
Customers answered a Web-based survey asking them to:
indicate auto design preferences
describe what they hate in a car
suggest ideas for new features
Customers designed a car, selecting from various styles and features; final result displayed on-screen
Software captured result and traced steps customers took to evaluate and select options
Received over 3,000 surveys totaling 30,000 pages of data in three months
Survey participants were in Fiat’s key target segment
Information influenced styling and concept designs
Test cost $35,000 -- about the cost of running multiple focus groups
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Fujitsu Fujitsu uused eProcurement sed eProcurement improve its improve its procurement processesprocurement processes
Objective
Empower and enforcing best procurement practices to drive procurement efficiency.
Description
Procurement practices include: on-contract compliance, vendor consolidation, spend waste reduction, and asset reuse
Procurement tied in with ERP applications and runs on PCs through a web browser
Program allows:
Automatically clearing requests through approval and purchasing
Reduces ability to engage in “maverick” purchases of higher-cost products through streamlined process
Allows analysis of buying patterns
Enables sharing data with suppliers, creating fact-based contract negotiating leverage
Results
Within a year since deploying the program, Fujitsu realized a 2-4% savings
Estimates project a 12-27% savings in operational spending
Approval process shortened to a standard of 24 hours from a less predictable timeline. Examples of poor performance of past requisition orders include a $750 order “lost” for 2 months
System rolled out to approximately 350 employees
Source: Electronic Commerce, Company web site, CommerceOne Web site
CommerceOne Procurement Software Capability
V.1.4 Solvay Business School
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DDemand side eemand side eBusinessBusiness
eSupply Side eDemand Side
eMediary
eEnterprise
After Sales
SupportSalesMarketingProductionProcurementProduct
Development
Participating in demand side eCommerce helps to achieve revenue enhancements, reduced SG&A costs and increased customer satisfaction
V.1.4 Solvay Business School
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Demand Side eCommerce Opportunities Definition
Management of the distribution process Collaborating with supply chain partners Demand forecasting Integration with customer systems Velocity: rapidly pulling together the right partners and
minimum scale to deliver compelling new product/service offerings
eSupply ChainManagement
Sales and marketing of products and services Tailored online catalogs and ordering Sharing inventory and production capacity information Online order fulfillment and payment
eSales & Service
Customer management services Self-service for customer inquiries Tailored service offerings Integration with customer systems Multiple resolution channels
eSupport
DDemand side eemand side eBusinessBusiness
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Dell Computer Dell Computer uused the Internet to sed the Internet to improve its sales improve its sales processes processes to to ccorporationsorporations
Objective
Reduce the costs associated with processing a purchase order and create one-to-one relationships with top customers
Description
Ranked number one in corporate PC sales. Internet reached $30 million per day (8/99)
Created 27,000 private intranet sites for corporate customers in two and half years since the program’s debut
Supply PC’s to numerous blue-chip customers, including Bayer, Toyota, Amazon.com, and Boeing
Results
Developed Premier Pages, a web site customized for each corporate customer
Allows customers to create custom configurations, contact customer support, place orders, and track inventory
Connects directly to customer procurement managers for order approval, submission, and tracking
Provides dynamic product pricing
Source: Company Web Site, Industry Reports
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Cisco Is Cisco Is oone of the ne of the lleaders in eaders in iimplementing mplementing ddemand emand sside B2B eCommerce ide B2B eCommerce ccapabilitiesapabilities
eSales & Marketing
Electronic catalogs, online sales support and order tracking reduce inaccurate orders from one in three to one in fifteen
“Commerce Agents” to automate and facilitate a dozen different functions
eCustomer Service
Over 80% of inquires previously handled by the call center are now answered electronically reducing support staff by 300%.
Savings of $2-15 per inquiry translate into $10.5M saved monthly
Customers receive extensive product information including email alerts on software bugs, product documentation, product pricing and software downloads
eSupply Chain Management
55% of orders now pass directly from Cisco to their suppliers
Source: The Economist, “When Companies Connect,” June 26, 1999. The Gartner Group
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eSupply Side eDemand Side
The eEnterpriseThe eEnterprise
eMediary
eEnterprise
After Sales
SupportSalesMarketingProductionProcurementProduct
Development
The adoption of eCommerce within the enterprise can result in significant operating efficiencies and increased employee satisfaction
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Enterprise eCommerce Opportunities Definition
eHR focuses on leveraging electronic channels for recruiting, orienting, developing and managing human capital more effectively and efficiently
eHR
Use of generic internet technology to enable effective internal communications & collaboration– Inter-office communication– Knowledge management and exchange– Document sharing
Intranet
The eEnterpriseThe eEnterprise
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UUse of eHR se of eHR to achieveto achieve eefficiencies in fficiencies in aadministrative dministrative pprocesses and rocesses and iincrease ncrease eemployee mployee ssatisfactionatisfaction
Objective
Description
Results
Produced >$2.5m HR and line management cost reductions
Reduced total cycle time for processing and approval from weeks to hours
Empowered line managers to manage human capital more effectively
Improved employee satisfaction with HR and improved HR department credibility with their customers
Reduce the time required for HR administration and cycle time for processing, and thus improving quality of service to HR customers
Exploited Intranet technologies to develop a self-service application focused on the key HR processes for employees and managers
Built a standards-based, open network architecture
Created a pilot application and distributed it to approximately 100 managers for technical and functional feedback (larger rollout to follow)
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UUse of eHR se of eHR to achieveto achieve eefficiencies in fficiencies in aadministrative dministrative pprocesses and rocesses and iincrease ncrease eemployee mployee ssatisfactionatisfaction
AttractAttract
RecruitingRecruiting
• Jobs ReqsJobs Reqs• ReferralsReferrals• Applicant Applicant
ProcessProcess
DeployDeploy
DeploymentDeployment
• AssignmentAssignment• Skills TrackingSkills Tracking
DevelopDevelop
LearningLearning
• Training adminTraining admin• Online deliveryOnline delivery• Online testingOnline testing
RewardReward
RewardReward
• Benefits/Life Benefits/Life Events-Events-RetirementRetirement, , stock optionsstock options
• PayrollPayroll• Time and Time and
ExpensesExpenses
ExitExit
Retirement and Retirement and severanceseverance
• Redeployment/Redeployment/outplacement mgmtoutplacement mgmt
• Pension and exit Pension and exit program adminprogram admin
PerformPerform
Performance Performance MgmtMgmt
• AppraisalsAppraisals• 360’s360’s• Goal SettingGoal Setting• Job profile Job profile
maintenancemaintenancewww.mycandidature.com
E-schedulinghttps.mylearning.accenture.com
GAT
http://myHoldings.accenture.com, e-zone
artes
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The Introduction of an Intranet Enabled Cisco to The Introduction of an Intranet Enabled Cisco to Optimize Its Workforce Performance Optimize Its Workforce Performance
Objective
Description
Results Increased employee satisfaction/ knowledge sharing Annual financial savings of $24m
Reduced operating expense 11$M Headcount avoidance 2$M Productivity increase 5$M Improved info flow 16$M Maintenance & development -10$M
1% added value of getting info/learning 85$M
Cope with rapid growth without increasing operating costs as well as shortening lead times.
Set of Intranet tools that provides scalability through automation & self service, including:
personalized portal employee administration/ directory recruiting & hiring payroll, expenses reporting & compensation review training system registration employee communications
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ShellShell
Objective
Drastically improve human performance by leveraging intranet for communications & knowledge sharing.
Description
Results
Pan-European intranet linking 31 operating units - functionality includes communications, training & coaching
Provides training tools, recommendations & guidance
Provides tools & guidance for coaching
Access to personnel database with personnel profile
Real time discussion forums & feedback section
More efficient shared service organization & processes - $m in reduced costs
More efficient HR processes - Open Resourcing High quality internal communications and knowledge- based
communities Innovative supplier relations - Honeywell/JWT Improved customer service
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eSupply Side eDemand Side
The eMediariesThe eMediaries
eMediary
eEnterprise
After Sales
SupportSalesMarketingProductionProcurementProduct
Development
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Emediaries descriptionEmediaries description
“Electronic Hub”
Market making mechanism
Industry or business function specific
eMediary Characteristics:
Customer
Distributor
Manufacturer
Suppliers
eMediaries
Source: Business 2.0, “Let’s Get Vertical”, Sept 1999
Organize industries of fragmented buyers and sellers
Create new distribution channels
Bring new products and services to market
Value of eMediaries:
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Value addedValue added
Provide efficient venue to buy/sell surplus inventory or exchange excess capacity
Create liquidity for new products and services
eCommerce Intermediaries
Aggregate Buyers and Suppliers
Reduce Costs
Create New Marketplaces
Improved matching of potential buyers and sellers in a market
Greater access and options for both buyers and sellers
Reduced searching and information transfer costs
Standardized buyer procurement
Source: September 1999 Business 2.0, “Let’s Get Vertical”
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Two Two kkey ey mmodels odels ddefine efine the the wway eMediaries ay eMediaries aare re eestablished and stablished and sstructuredtructured
Pla
stic
s
Ste
el
Procurement
Ch
em
ica
ls
Vertical eMediaries
Horizontal eMediaries
The Business-to Business Web
Examples:
Examples:
eSteel.com (New View Technologies)
PlasticsNet.comChemConnect.com
Ariba, CommerceOne, Oracle, i2 Technologies, SAP,…
Source: September 1999 Business 2.0, “Let’s Get Vertical”
eCatalogs
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Examples of vExamples of vertical eMediariesertical eMediaries
Industry ObjectiveCompany
Financial Services Act as electronic go-between for mortgage originators and the
secondary mortgage market (lenders, brokers and corporates)
Connect buyers with suppliers of paper and related equipment through electronic trading floor and classifieds
Provide a global electronic marketplace for the selling and purchasing of steel
Serve as an intermediary for electronics manufacturers and electronic parts suppliersElectronics
Industrial Products
Chemicals
Paper
Provide an online marketplace for buyers and sellers of life science chemicals products
Plastics Provides a sales and communications network for plastics industry players
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Sample of hSample of horizontal eMediariesorizontal eMediaries
Business Functions Objective
Automates procurement of non-production supplies
Creates an on-line MRO market for capital asset intensive industries
Company
Energy Management
Acquisition of non-production supplies
MRO procurement
Automates indirect goods and services supply chain activities
Logistics
Help businesses understand and manage their energy consumption for more effective use of power
Connect shippers who have loads they want to move cheaply with fleet managers who have space to fill
Rapid implementation (ASP) of ecommerce solutions for industrial and high technology companies (engineered products)
ecommerce, ecatalogs
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Trends, facts and figures
eBusiness value drivers
Application areas for eBusiness
Electronic marketplaces
AgendaAgenda
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Marketplaces profilingMarketplaces profiling
In Q42001, Booz Hamilton identified 2,233 e marketplaces and profiled 1,802 of them :
Type of model % of marketplaces
Comments Examples
Independent 92% Developed by pure play operators
6% of marketplaces listed. Others funded by private equity
Focus on cash generation
Autotradecenter.com
Consortium 5% or 92 sites Several industry players join forces to create a common forum for the exchange of goods and services
Deep pocketed founders
Possible difficulties to align interests of all parties
Covisint.com, transora.com, …
Private 3% or 57 sites One company develops a site for its customers and suppliers to facilitate transactions up and down the value chain
Most common function is online cataloging
Dell.com
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Marketplaces profiling (cont’d)Marketplaces profiling (cont’d)
In Q42001, Booz Hamilton identified 2,233 e marketplaces and profiled 1,802 of them :
38%
27%
10%
5%
21%
North America
Europe
Asia
Latin America
Global
Core service % offering
Information exchange 65%
Digital catalogs 63%
Online auctions 55%
Logistics services 21%
Supply chain planning 8%
Design collaboration 4%
Other value added services 45%
Geographic breakdown Service offering
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Marketplaces profiling (cont’d)Marketplaces profiling (cont’d)
With the help of the Darden Graduate School of Business at the University of Virginia, Booz Allen revisited a large sample of the e-marketplace sites (approx 1,100 out of 1,802) to document the failure rates in Q32002 :
– 45% of the e-marketplace have disappeared• 21% of consortium-based sites • More than 45% of independent sites
– Failure rates do not differ by geography
– Differences by sector• 60% of e-marketplaces in textile and advertising/medi failed• 35% of e-marketplaces in financial services, paper, aerospace and printing failed• 45% of generalist sites failed