The Digital Enterprise

Introduction to e-Business

Discussion of Digital Media and e-Business

Supply Chain Essentials – Key Players

Supply Chain Essentials - Processes

Supply Chain Essentials - The Value Chain

Supply Chain Management (SCM)

• SCM is management of product life from buying, making, moving, and warehousing to selling

BuyingBuying

What is SCM?

SellingSelling

MakingMaking

MovingMoving

WarehousingWare

housing

SOURCE: i2

Business Before ERP (Enterprise Resource Planning)

Customers

CustomerDemographic

FilesSales Dept.

Vendor

OrdersParts

Accounting

AccountingFiles

PurchasingPurchasing

Files

Order is placedwith Vendor

Invoicesaccounting

InventoryFiles

Warehouse

Checks for Parts

Calls back “Not in stock”

“We ordered the parts”

“We Need parts #XX”

“We ordered the parts”

Sends report

Sends report

Sends report

Ships parts

Business With ERP

Database

Customers Sales Dept.

PurchasingWarehouse

Accounting

Vendor

Inventory DataIf no parts,

order is placedthrough DB

OrdersParts

Order is submittedto Purchasing.

Purchasing recordorder in DB

Order is placedwith Vendor

And invoices accounting

Financial Data exchange;Books invoice against PO

Books inventoryagainst PO

Ships parts

Procter & Gamble Supply Chain

Customer wantsdetergent, goes to Giant Eagle

Customer wantsdetergent, goes to Giant Eagle

Giant EagleSupermarketGiant Eagle

Supermarket

Giant Eagle or Third PartyDistributor

Giant Eagle or Third PartyDistributor

P&G or OtherManufacturerP&G or OtherManufacturer

PlasticProducerPlastic

Producer

ChemicalManufacturer

(e.g. Oil Company)

ChemicalManufacturer

(e.g. Oil Company)

TennecoPackagingTenneco

Packaging

Paper Manufacturer

Paper Manufacturer

TimberIndustryTimber

Industry

ChemicalManufacturer

(e.g. Processed Minerals)

ChemicalManufacturer

(e.g. Processed Minerals)

MiningIndustryMining

Industry

SOURCE: SANJAY CHOPRA

Loan Application Workflow

e-Business Defined

According to one consulting firm: “e-Business refers to all business processes that take place

across electronic networks. This includes everything from buying and selling of goods and services through the World Wide Web, to interactive television and a whole host of other emerging technologies. E-Business integrates [Information Technologies] with traditional business processes, introducing efficiencies that cut costs and increase profits.”

e-Business Examples

e-Business is any commercial activity conducted over networks linking electronic devices (typically computers). Often includes: Commercial transactions over the Internet, telephone, or fax; Electronic banking and payment systems; Trade in digitized goods or services; Servicing customers and collaborating with business partners;

and Procurement and inventory control.

Potential Marketplace for e-commerce…..

The Internet - Catching on at Net Speed for 50 million users

Years0 10 20 30 40

Radio38

Years

PC16 Years

Television13 Years

Internet4 Years

Users

50 million users

Growth of the Internet

Potential Marketplace

World penetration of broadband/100 people Q2 2005

Consumption of digital media is growing

Video Streams Served, Year Ending (millions)

12 billion video streams served/viewed in 2005

Source: Accustream iMedia Research

0

2000

4000

6000

8000

10000

12000

14000

1999 2000 2001 2002 2003 2004 2005 2006

Million

s

Why is Consumption Growing?

1. Infrastructure

2. Consumer Applications

3. Revenue

4. Business Applications

Source:Source:

1. Infrastructure

194.5m mobile subscribers

47m broadband subscribers

Converging wired and wireless

networks for IP delivery of

media

Ubiquitous High Bandwidth IP Networks

Source: CTIA.org, Computer Industry Almanac, Nov 2005

2. Consumer Applications

• Surge in the deployment of streaming technology in applications that provide access to libraries of digital shows, movies, and other media

• Streaming to mobile devices is driving usage– Consumer demand for multi-media experiences is

prompting huge increase in demand for streaming platforms to portable wireless devices

New Consumer Applications

Source: Frost and Sullivan 2004

3. Revenue

Digital Media Digital Media Generates RevenueGenerates Revenue

•Streaming audio and video advertising valued at $343 millionin

2005, up 78% over $193 million dollars billed in 2004

•Streaming subscription revenue is forecast to rise by 35% in 2006 to $821 million dollars(excluding download revenue)

Source: AccustreamiMediaResearch

1

2003 2008

BIL

LIO

NS

Online Advertising

2

3

4

5

6

7

11

2003 2008

BIL

LIO

NS

Online Advertising

22

33

44

55

66

77

Online AdvertisingOnline Advertising

Streaming PortionStreaming Portion

Online AdvertisingOnline Advertising

Streaming PortionStreaming Portion

4. Business Applications

Business are Extending Usage

Enterprises are implementing streaming media along with their other core technologies, treating it as a real business communication tool in every vertical imaginable.

Source: Aberdeen Group/Streaming Media Inc

Source: Gartner

50%

70%

New Applications Investment

% of 2005 Spend or Rich Media Based E-

business Transformation

New IT Infra Investment

Digital Media Value Chain

• Simple example:

• Exercise: come up with another example

CREATE DELIVER PLAYBACK

The Current Landscape - Coexistence of Competing Cooperative Heterogeneous Infrastructures

FWA, LMDSMMDS

GSM/GPRSUMTS

Wireline

xDSL

Wireline

xDSL

BroadcastingDAB/DVB FibreFibre

CableCable

SatellitePLCPLC

IP Optical based core

network

Short RangeEdge and Moving

Networks:UWB, BANs,

PANs, WLANs etc

BROADBANDEntertainment,E-Business, Services

MEDIAPre-Recorded ContentPersonal Media

MOBILE MULTIMEDIAEntertainment,Personal Pictures and Video, Services

BROADCASTServices,Entertainment

Future Scenario - Co-operative interoperable devices

Consumers want theirdevices to work together

and share content

Consumers want theirdevices to work together

and share content

Consumers want theirdevices to work together

and share content

Consumers want theirdevices to work together

and share content

MEDIAMEDIAPre-Recorded Content

Personal Media

MOBILE MULTIMEDIAMOBILE MULTIMEDIAEntertainment,

Personal Pictures and Video,Services

BROADCASTBROADCASTServices,

Entertainment

BROADBANDBROADBANDEntertainment,

E-Business, Services

Consumers want theirdevices to work together

and share content

Consumers want theirdevices to work together

and share content

Some Challenges

Digital Rights Management New Functional and Architectural Framework Security and privacy

Media Format Media technologies Media players

Middleware New APIs, support new Business Model Platform (hardware & Software + Resources)

Network Aspects (Local/Ad Hoc and Wide Area networks) QOS (Quality Of Service) Security Transportation

Communications Full range of Wired & Wireless Technologies

Challenges - NAB 2006 Multimedia World Keynote Session

• Consumers .. are increasingly more comfortable with new ways of obtaining and enjoying content. “Appointment TV” no longer fully meets the expectations of a new generation of consumer.

• The traditional distribution channels are being replaced by increasingly on-demand ways of obtaining entertainment content.

• Media & entertainment companies have to decide what strategies they will pursue to capitalize on the disruption that is beginning to occur as a result of digital technologies and the internet.

• The winners will be those who anticipate and respond to shifting consumer desires and expectations, by embracing IT to deliver better consumer experiences and more flexible and efficient supply chains that:– are scalable and adaptable, enabling broad, rather than point solution capabilities

and are effectively “future-proof”, and;– leverage digital content delivery, content metadata, customer profile and behavior

data to deliver breakthrough, highly targeted content sell-through services that extend to the delivery of highly targeted promotional and ad content.

Potential Benefits - NAB 2006 Multimedia World Keynote Session

• The benefits available are compelling and will form the basis of competition in the coming decades– Speed: shortening the time-to-market and time-to-profit for newly released titles

– Responsiveness: making content available quickly for an increasing variety of distribution models and consumer formats and devices

– Visibility: having immediate, real-time access to all of your assets – knowing exactly where and in what formats they reside

– Cost efficiency: driving lower cost structures through more automated workflows, less repetitive work and reduction of physical inventory

– Global scalability: easily enable growth and extension of the business, both via increasing global reach and increasing volume

– And ultimately, better consumer choice and experience that should translate in higher revenues and higher profits

Where companies are putting their bets

Commercial content- Movies, television, games, music- Formats- DVDs, hi-def DVDs, electronic files, broadcast signals- Delivery channels

• Satellite, terrestrial broadcast, cable• Physical store, mail,• Download, streaming, webcast, cell phone

- Business models• Purchase, rental, subscription, advertising-supported

- Playback experience• TV, DVD player• PC, portable video player, mobile devices

ERP-style applications to support the new Media market

A new “digital media exchange” for secure, published content will emerge where• eMasters and eSKU are produced;• orders are placed and fulfilled;• license and royalty transactions are executed;• titles are distributed and sold;• and targeted, relevant advertising is added;• all in near real-time, and all without a tape, a courier, a phone call, a fax, or a printed invoice

Big Players – e.g. IBM, HP

IBM - MediaHub Solution Framework

BusinessSystems

ContentSystems

Production &DistributionTransformation

Transforming the Back Office and Supply Chain

Analog to Digital Transformation

Customer Sales & Service TransformationCRMCustomer Analytics Call Center Consolidation

Intellectual PropertyManagement

Ad Sales Transformation

Digital

Media Framework

Optimize business customer offerings

Drive direct - to - consumer relationships

Prepare for integrated media

Consolidate overhead

Integrate operations

Requirements - MediaHub

Media companies need to know where content is and how manage it through the production and distribution process

New requirements…Understand different workflow

dependencies, perform intelligence forecasting and execute actions across the organization

Handle content as digital objects, and remove analog dependencies

Reduce the time and cost to create, manage and distribute media assets

Dynamically change business processes and launch new business models using existing/legacy assets

Home Entertainment Home Entertainment

MusicMusic

Filmed Entertainment (Film & TV)

Filmed Entertainment (Film & TV)

Newspaper/MagazinesNewspaper/Magazines

BooksBooks

Pay TV Networks (Cable)

Pay TV Networks (Cable)

Online Service ProvidersOnline Service Providers

Broadcast Networks Broadcast Networks

CONTENTCONTENTCONTENTCONTENT

CONTENTCONTENTCONTENTCONTENT

CONTENTCONTENTCONTENTCONTENTCONTENTCONTENTCONTENTCONTENT

CONTENTCONTENTCONTENTCONTENT

CONTENTCONTENTCONTENTCONTENT

BUSINESSBUSINESSBUSINESSBUSINESSBUSINESSBUSINESSBUSINESSBUSINESS

BUSINESSBUSINESSBUSINESSBUSINESS

BUSINESSBUSINESSBUSINESSBUSINESS

BUSINESSBUSINESSBUSINESSBUSINESS

BUSINESSBUSINESSBUSINESSBUSINESS

Business &ContentSystems

Business &ContentSystems

Today’s chaotic environment

Built on Existing Applications

The MediaHub Solution Framework is built on the IBM portfolio of software and media industry Business Partners

Solution ComponentsMedia Hub Solution Framework

Management

Business System & Content System Connectors

Business Process Status, Dashboards…

Assembly & Deployment

Business Modeling

Media-tuned Professional Services

WebSphere Business Monitor

Connector FrameworkRich Content Infrastructure

WebSphere Portal / Wiki

WebSphere Studio Application, WebSphere Information Integrator Content Edition, WebSphere Business

Integration Server Foundation

WebSphere Business Modeler

Media & EntertainmentBusiness Consulting Services

Media Industry ApplicationsApple, Ardendo, Avid, Documentum, Telestream,

Pinnacle, Sintec, Xytex….and others

HP Digital Media Platform

The HP Digital Media Platform includes storage, processing, management and distribution capabilities. It serves as a technology foundation to enable a wide range of applications, solutions and services that are built on top of the platform.

HP digital media services.

HP digital media offerings include HP Digital Vault Services and HP Video Merchant Services.

Discussion

How would this technology be applied to the Supply Chains discussed earlier?