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LEADING YOUR COMPANY TO THE WEB

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Number of online households. Revenues from Web advertising ... Customers get passwords to watch at leisure. Information exchanged electronically ... – PowerPoint PPT presentation

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Title: LEADING YOUR COMPANY TO THE WEB


1
LEADING YOUR COMPANY TO THE WEB
  • Ned C. Hill, Dean
  • Marriott School
  • Brigham Young University

2
Electronic Commerce A Quick Overview
  • Whats wrong with the old paradigm?
  • What is e-Commerce?
  • How large is the market?
  • How is e-commerce (and the Web) changing
    business?
  • Should my company enter Web-space?
  • What we are doing in the Marriott School and at
    BYU

3
Whats Wrong with the Old Paradigm?
4
The Paper-based Commercial Transaction
Seller
Mail
Mail
Check
Check and Remittance Advice
Request for Quote
Purchase Order
Banking System
Carrier
Quote
Invoice
Bill of Lading
Mail
Mail
Mail
Buyer
5
Keying in the Paper World
Sellers Computer System
Keying
Keying
Keying
Keying
Postal System
Keying
Keying
Keying
Keying
Buyers Computer System
6
Whats Wrong with this Picture?
  • Labor intensive
  • Slow
  • Error prone
  • Uncertain
  • Excessive inventory (and cash)
  • Bottom Line ITS EXPENSIVE

7
What Can We Do?
  • Option 1 Make paper work harder
  • Option 2 Get rid of the paper altogether

8
Definitions of e-Commerce
  • Simple The selling of products and services
    using the Internet.
  • More General The use of computer and
    communication technology to facilitate the
    information exchange between two parties in a
    commercial transaction.

9
Primary Types of e-Commerce
  • Paperless
  • Application to application
  • Electronic data interchange (EDI)
  • Financial EDI (firm to bank)
  • File transfer
  • Manual to application
  • Web applications
  • Electronic order entry
  • E-mail

10
Additional Types of e-Commerce
  • Physical media assisted by computers
  • Facsimile transmission
  • MICR, OCR, ICR
  • Bar coding
  • RF
  • Voice recognition

11
Map of e-Commerce
All Electronic
EDI, FEDI, FTP
Internet, E-mail, E-trade
MICR, OCR, ICR, Bar Coding
FAX
All Paper
Traditional Paper Transactions
12
An e-Commerce Transaction
Seller
Bill of Lading
Request for Quote
Banking System
Quote
Payment and Remittance Advice
Invoice
Carrier
Purchase Order
Goods
Buyer
13
Manual Processes in an e-Commerce World
Sellers Computer System
Keying
Translation
Translation
Translation
F.A.
F.A.
F.A.
Computer Network (VAN, Internet)
Invoice
P.O.
RA
Keying
Translation
Translation
Translation
Buyers Computer System
14
Benefits of e-Commerce
  • Lower personnel costs
  • Reduced error rates
  • Faster cycle time
  • Improved customer service
  • Reduced inventory
  • Fewer stock-outs
  • Reduced paper handling costs
  • Faster payments
  • Better control over information

15
What is the Size of the U.S. e-Commerce Market?
  • Accurate data is hard to find
  • Three measures
  • Number of online households
  • Revenues from Web advertising
  • Dollar volume of transactions through the Web
  • This is NOT the entire e-commerce market
  • EDI market is even higher than Web market

16
Online Households
Million
From Net Profit by Peter S. Cohan
17
Web Ad Revenues
Million
From Net Profit by Peter S. Cohan
18
Business Through the Web
Billion
Est. from the U.S. Department of Commerce
19
Cost Curves
  • Labor costs
  • Paper costs
  • Building costs
  • vs.
  • Computer costs
  • Telecommunication costs

20
Faster and Faster!Time Required to Transmit the
32 VolumeNew Encyclopedia Britannica
  • 1200 bps modem..28 days
  • 28.8 Kb modem..28 hours
  • Basic Rate ISDN...6.3 hours
  • T-1 line...31 minutes
  • T-3 line..1 minute
  • ATM-SONET (OC-3)....17 seconds
  • ATM-SONET (OC-12).....4.7 seconds
  • Newly proposed technology .005 second

21
How the Web Changes Business
Traditional Web
Broadcast 1 to N Network N to N Sellers more
powerful Buyers gain more power Customer
loyalty Less customer loyalty High barriers to
entry Low barriers to entry Speed slow Speed
very fast Charge for each product Often give away
products Transactions costs high Transaction
costs low
22
Should My Company Enter Web-Space?
  • Do we have 100,000 to 200,000 to invest in
    launching a Web site? (And are we willing to
    invest in maintaining it?)
  • Are our competitors involved in the Web?
  • Do our customers demand Web services?
  • Do we have customer service opportunities that
    could be improved via the Web?
  • Is a significant portion of our customer base
    under the age of 30?
  • Do we want to be in business 2-5 years in the
    future?

23
Three Stages of Web Involvement
  • Stage 1 Brochure
  • One-way information broadcast
  • Lowest cost, easiest to maintain
  • A holder for your place in e-commerce
  • Stage 2 Basic Transactions
  • Offer basic transactions orders, payment
  • Requires significant maintenance, real-time
    processing
  • May compete with existing business avenues

24
Three Stages of Web Involvement
  • Stage 3 Complete Business Partnership
  • Multiple transactions with customers
  • Integrated functionality
  • Builds customer loyalty, long-term relationships
  • Involves major funding commitments

25
Three Stages of Web Involvement
Stage 1
Stage 2
Stage 3
Cisco Product Info. Design Orders Status Custom
er service Delivery Payment
LandsEnd Catalog Orders
WSJ News
26
Suggestions on Entering Web Space
  • Keep your focus on your customer--dont get lost
    in the technology
  • Use EC to improve processes and information
    flow--dont pave over old cow paths
  • Develop customer loyalty by providing multiple
    connections that add value
  • Partner when necessary to widen your ability to
    provide services

27
Can We Sell Through the Web?
Web Applications Difficult/Impossible
Web Applications OK but Must Be Sophisticated
Simple Complex
Product
Web Applications OK
Web Applications OK
Unskilled
Sophisticated Customer Knowledge Level
28
Can We Sell Through the Web?
Cisco
Estate planning
Dell
Simple Complex
Product
Term insurance
Amazon.com
Groceries
Unskilled
Sophisticated Customer Knowledge Level
29
Suggestion Analyze the Timelines You Create for
Your Customers
  • What processes do they go through to find us?
  • How do we tell them about our products?
  • How do they order from us?
  • How do they contact us about customer service
    problems?
  • How do they pay us?
  • What other information would they like to have
    about status, payments, availability, etc., and
    how do they get it?

30
Determine Your Timelines
Seller
Mail
Mail
Check
Check and Remittance Advice
Request for Quote
Purchase Order
Banking System
Carrier
Quote
Invoice
Bill of Lading
Mail
Mail
Mail
Buyer
Time delays, internal processing, costs,
bottlenecks
31
Want to Find an Internet Business
Opportunity?Hint Study Possible Timelines
  • Consumer shopping
  • Applying to college
  • Buying a house
  • Booking a flight
  • Checking out a book from a library

32
Illustration NetRoadshow
  • Public stock and bond offerings
  • Old timeline
  • Executive visits to possible customers
  • Extensive exchange of paper information
  • Innovation
  • Create electronic roadshow
  • Customers get passwords to watch at leisure
  • Information exchanged electronically
  • Sales calls follow
  • Results
  • SEC approved
  • Over 400 shows in 1999, at 20,000 each
  • Goldman Sachs, DLJ, Bear Stearns use
  • Company acquired for 50M by broadcast.com

33
The University--As a Business
  • BYU located in Provo, Utah
  • 31,000 students--largest private university
    campus in U.S.
  • 300,000 alumni
  • 6,000 employees
  • 300 million annual budget
  • Cost structure 80 salary

34
The Marriott Schoolof Management
  • 110 faculty
  • 5 masters programs, 2 undergraduate
  • MBA, top 50 (tops in payback)
  • Masters of Accounting, number 2
  • 2,300 undergraduate students
  • 700 graduate students
  • 1,100 graduating students per year

35
Why We Entered Web Space
  • Marketing
  • Competition uses Web extensively
  • Image is important (rankings)
  • Desire to improve customer service
  • Prospective students
  • Current students
  • Alumni
  • Recruiters
  • Desire to extend influence internationally
  • Need to contain costs/positions

36
How We Did It
  • Used outside consultant to develop strategy
  • Brought together all programs and functions
  • Developed list of priorities
  • Coordinated with rest of university efforts
  • Formed a Web development team
  • Four students plus full-time staff member
  • Analyzed top Web sites from other universities
    and companies
  • Developed plan to phase in Web site over time

37
Marriott School Web Site
  • Phase 1 Infrastructure and design
  • Went online Aug. 30th
  • Primarily information (Brochure Stage)
  • Navigation tools developed
  • Phase 2 Database integration
  • Data base driven pages (Oracle)
  • Some transactions (applications)
  • Ease of maintenance
  • Online spring 2000
  • Phase 3 Transactions and customization
  • Multiple transactions and value-added services
  • My Marriott, My Courses, My Students, etc.
  • Online fall 2000

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46
Other Uses of e-Commerceat Brigham Young
University
  • Grade transcripts EDI
  • Telephone bills EDI
  • Inter-library loans EDI
  • Applications Internet
  • Student loan documents EDI
  • Course registration Intranet
  • Ordering supplies Internet
  • Course delivery Internet, etc.

47
Technology Goals at BYU
  • Permanent e-mail address for all students/alumni
  • Moving towards use of Internet for 100 of
    applications and registrations
  • Apply EDI to purchasing, invoicing, prices, etc.
  • Move 100 correspondence courses to Internet by
    Jan 2000 (then 200, 300, etc.)
  • Intranet-based services for students, alumni,
    recruiters, etc.
  • Increase electronic holdings for library
  • Use of Internet to assess teaching, services,
    etc.
  • Will soon require laptops for all students

48
Changing the Educational Paradigm
  • Utilize technology to help deliver course content
  • Asychronous vs. synchronous
  • Mixed-mode learning
  • Use professors for what they do best
  • Mentoring
  • Q A
  • Discussion subjects
  • Use technology for what it does best
  • Exercises
  • Factual material
  • Objective testing

49
Examples of Computer-Assisted Courses
Course Key Feature
  • Chemistry Replaces lectures
  • Rat Lab Decreases costs
  • Bacteriological Lab Allows experiments
  • Engineering Technology Controls equipment
  • Languages Adaptive learning
  • Music Visualizing Bach
  • Accounting Repetitive drills

50
Conclusions
  • Technology is changing the business (and the
    educational) paradigm
  • Learn all you can about e-commerce
  • Direct benefits of e-commerce are impossible to
    measure--but can you measure the value of your
    telephone?
  • You will be doing e-commerce sooner or
    later--might as well get started now!

51
References on e-Commerce
  • Peter Cohan, Net Profit, Jossey-Bass,
    1999--investing and competing in the Internet
    business world
  • Bruce Judson, Hyper W_at_rs, Scribner, 1999--good
    commentary on online business opportunities
  • Nicholas Negroponte, Being Digital, Knopf,
    1995--one of the most insightful commentaries on
    the Information Age
  • Karen Southwick, Silicon Gold Rush, Wiley,
    1999--strategies for developing a high-tech
    business
  • Don Tapscott, The Digital Economy, McGraw Hill,
    1996--how the Information Age will impact the
    economy
  • Don Tapscott, Growing Up Digital, McGraw Hill,
    1998--how the younger, computer-literate
    generation will change business and the world

52
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