1 e & y consulting “from thought to finish” alain olivier director ecommerce service line...
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E & YConsulting
“From thought to finish”
Alain OlivierDirector
eCommerce Service Line Leader
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The “Electronic Commerce” phenomenon is unavoidable...
“Electronic Commerce is conducting or enabling the buying and selling of goods or services through electronic networks, including the Internet.”
E&Y Definition
0
50
100
150
200
250
Millions of
InternetWorld-wide
users
1994 1996 2000 2002
27m
60m
35m34m
240mIDC Research
Booz Allenand Hamilton
200mDurlacher
Media
190m
160m
EITO
1998
In 2002, there will be 200 millionsusers connected world-wide (+/-40 m)
Time to reach 50 M users :
Radio
TV
38 years
13 years
PC
Internet
16 years
4 years
Source: The emerging digital economy, US Department of Commerce
The rate at which successful technologies are adopted is rising
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Why this interest in eCommerce ?The rapid growth of the Connected Economy ischanging the fundamental Business Model
Supply chains are shortening and integrating
with the customer connections
Increasing competition from New Entrants for
deeper and broader customer relationship
Use of technology (GSM, Internet, Satellites, …) by customers for services and
products is growing exponentially
New business entities emerging from disaggregation,
consolidation (M&A) of traditional business models
Migration of conventional “business
models” towards “electronic market” places accelerating
Globalisation ofcommerce
ConnectivitySpeed
Intangibles
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The phenomenon is complex…
Because it is global and the supporting technologies enable interactive exchange of content rich information anywhere, anytime, at light speed
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Because it impacts the whole organisation and necessitates :• to reformulate entreprise strategy ( strategic level)• to review the entire information flow external and internal ( operational level)• the use of complex new technologies constantly evolving ( technical level)
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What to do…
Key Points
1. Integrate eCommerce in every development strategy
2. Identify and understand strength lines
3. Define a clear and precise strategy
4. Be ambitious
5. Quantify objectives
6. Be compliant with new technologies and emerging standards
7. Develop interactive communication capacity
8. Integrate the whole transaction chain
9. Manage competencies and knowledge
10. Master security
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1. Integrate eCommerce in every development strategy…
New technologies drastically change the way entreprises interact. They open new strategical perspectives …
• accelerated development of new products• creation of new market segments • definition of new distribution circuits• optimisation of value of exchanges between partners (clients, suppliers, bank, administrations, …)
EnterpriseSuppliers
Customers
VALUE NETWORKS - Content Stds.
- Net Applications- Process Stds.
ElectronicMarketplaces
Direct Access CollaborationDB DB
Partners
Banks
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2. Identify and understand strength lines
• personalise the offer by micro-segments of market• propose locally a global offer• take into account client needs and individual wishes • better convince thanks to interactivity• better understand competition • better compare with competitors• have access to the best available resources on the market• build cross-border alliances • differentiate by standing on the leading edge for innovation• simplify administrative procedures• realise scaling up benefit and reduce operational cost• redesign in a modern and harmonious way integration of entreprise systems
Electronic Commerce enables to :
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3. Define a clear and precise strategy
Evaluate current situation
• identify and evaluate current initiatives • analyse market trends• analyse competitors behaviour• identify critical success factors• build a matrix to classify opportunities• analyse the entity receptivity to eCommerce (processus, systems, people)
Ph
ase 1
Develop a strategy
• define strategical objectives• list and position candidate initiatives (projects) • identify important processes• define roles and responsibilities• specify guide-lines to lead the necessary technical change • establish priorities• define action plan
Ph
ase 2
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4. Be ambitious…
1991 1996 2001
EC Scope EC Scope
Sponsor Sponsor
Applications Applications
Strategy Strategy
Thousandsclients
Thousandsclients
IT DepartmentIT Department
Modification of existing
applications
Modification of existing
applications
Just-in-timeJust-in-time
DataInterchange
(EDI)
DataInterchange
(EDI)
Millions clients
Millions clients
Marketing Department
Marketing Department
Specific applications
Specific applications
Optimisation of prod. chain
Optimisation of prod. chain
Internet E-Markets
Internet E-Markets
GlobalEconomyGlobal
Economy
Top ManagementTop Management
eCommercePackage
eCommercePackage
Value NetworksValue Networks
EDI + EC Integration
EDI + EC Integration
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5. Quantify objectives
It’s necessary to set-up objectives through measurable criteria’s
e.g. : • profit increase from 30 to 40 %• administrative staff productivity increase 15 %• commercial forecast error reduction 50 to 60 %• time to react to customer request reduced by half • revenue increase for a specific product 100 %
%
%
%
%
%
%
%
%
0 50 100 150 200 250 300 350 400 450 500
%
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6. Be compliant and evaluate new technologies and emerging standards
Technological
Visibility
Time
Excessive
hopes DesillusionProduction
platform
Wearable Computers
Biometrics
On-line communities
Internet TV
E-Cash
xDSL
XML
Knowledge Management
Extranets
Agents
Streaming Media over Web
VRML
Java Plateform
Network Computers
Push
Videoconference Vocal Recognition
Personal Digital Assistant Data Mining
Message Brokers
Intranet publishing
Type A Type B Type C
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7. Develop interactive communication capacity
From mass marketing to micro marketing
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8. Integrate all functions
Marketing
Sales
Production
Administration
CustomerServices
Added Value
Internal Systems
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9. Manage competencies and knowledge (Knowledge Management)
• strengthen competencies• learn faster than competitors
• innovation• agility•efficiency
• costs• “time to market”
• sales and margin• market share• Customer service• quality• new products
… a discipline that promotes an integrated approach to identifying, managing and sharing all of an enterprise’s information assets …(Gartner Group - 1996)
… Knowledge and information are critical to the organization’s survival in an uncertain future …(Ernst & Young - 1997)
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10. Master security and manage risks
“Technologies exist, procedures exist… It’s probably the easiest problem to solve… but maybe not the less expensive .”
It’s necessary to frequently …
• raise awareness and train personnel • redesign structures• control strict application of security rules• verify conformity of equipments to security rules
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Projects samples and impactsProjects samples and impacts
Customers
Business Partners
A Portfolio of Opportunities CO-OPERATIVE PRODUCT DEVELOPMENT & PLACEMENT
Eg: Collaborate on product design or share ‘portal’ into common customer base speed to market and penetration
EFFICIENT ELECTRONIC PROCUREMENT
Eg: Buy all commodity and consumable items electronically Cost savings
NEW VIRTUAL BUSINESSES
Eg: design new business model unencumbered by ‘bricks and mortar’ legacy flexibility and cost advantage
TRANSFORMING BUSINESS TO BUSINESS RELATIONSHIPS
Eg: launch extranets to share information, increase inter- dependence and reduce admin Responsiveness and cost advantage
DEEPENING RELATIONSHIP WITH CUSTOMERS
Eg: launch interactive TV or mobile phone services to sell, serve and inform large customer base Loyalty, retention and cost advantage
EMPLOYEE SELF SERVICE
Eg: Provide direct access and update of internal and external information (HR, Pensions, Travel, Financial advice, shopping Loyalty and cost savings
INTEGRATED SUPPLY CHAIN
Eg: Link customer orders through to raw materials management Responsiveness and cost savings
Enterprise
Employee
Suppliers