某咨詢行業(yè)互聯(lián)網(wǎng)影響oinofView

Authors:Reviewers:

bcPointofViewCreated:June1999HeidiLockeSimonLangstonJonesJeffreyKuoDavidSandersonEmmaGrayAaronCheris1PointofViewWhatimpactistheInternethaving?HowwilltheInternetaffectmybusiness?Whatshouldwebedoingtorespond?Whatarethekeystosuccess?Executivesacrosstheboardareposingfourfundamentalquestions:OverviewBain’sPointofView2PointofViewAgendaInternetImpactDetailBusinessImpactDetailResponseAlternativesKeySuccessFactors

3PointofViewTheInternetisamajordiscontinuitythatwillredefinethestrategiclandscapeineveryindustry.DefiningcharacteristicsoftheInternetcreateatrulyuniqueuserexperienceUbiquitousreachDramaticallylowercostinteractionComplete,symmetrical,“free”informationTheseresultindramaticchangesacrosscompanyrelationshipswithcustomers,suppliers,employeesandotherstakeholdersRedefinitionofentireuserexperienceNewchanneltocapturegrowthopportunitiesElectronicmanagementofupstreamsupplychainrelationshipsTightlinkageofend-userdemandtocompanyoperationsRedeploymentofphysicalandhumanresourcestofacilitatedramaticproductivityimprovementOverview(1of2)InternetImpactDetail4PointofViewTheInternetisamajordiscontinuity.ThestakesarehighforshareholderwealthcreationOverthepastthreeyears,asmallgroupofInternetcompanieshavecreatedmorevaluethananyotherindustryachievedovertenyearsTheInternetisadynamicmedium,andfurthersignificantshiftshaveyettoplayoutDramaticallyenhancednetworkperformanceHighspeedaccesswidelyavailableNewdemographicwavesNewspecialized(non-PC)accessdevicesandnewaccessbusinessmodelsValueaddedreintermediationIntegrationofphysicalandelectronicparticipationOverview(2of2)InternetImpactDetail5PointofViewTheInternetwillredefinethestrategiclandscapeineveryindustry.Productcustomization/qualityGeographicproximityMechanicalinnovationTransportationinfrastructureScaleeconomiesMassmarketingUbiquitousreachtoallstakeholdersDramaticallylowercostinteractionsComplete,symmetric,“free”informationWellordered,multi-tiereddistributionEfficient,optimizedphysicaltouchrelationshipsTrulyuniqueuserexperiencedeepercustomerrelationshipsbroaderreachCompleterestructuringofindustrysupplychainsLowercostandenhancedproductivityCraftBasedEconomyIndustrialRevolutionMassProductionInternet/InformationRevolutionS

u

p

p

l

i

ersDIstrIbutorsManufacturingResellersCustomersInternetRevolutionInternetImpactDetail6PointofViewInternetCharacteristicsDefiningcharacteristicsofthisnewcommunicationsmediumareredefiningallcompanies’stakeholderinteractions.ExampleImplications:DramaticallyLowerCostInteractionKeyCharacteristics:Anyone,anytime,anywhereinteractionSubstituteshighcosthumanforlowcostelectronicinteractionFrictionlessinformationexchangeUniversalaccessLowcost/highbandwidthinfrastructurePowershiftstobuyersthroughpricing,inventoryandotherinformationvisibilityTargetedsegmentationenables“customer”levelcustomizationandprofitmeasurementInternetGlobalCommunicationsMediumComplete,Symmetrical,“Free”InformationAvailabilityReducesnumberof“touches”ineachinteractionEliminatesindustryandorganizationallayersProvidesaccesstonewcustomersegments,broadersupplierbaseandincreasedpoolofemployeesCreatesfoundationforstrengtheningrelationshipsandimprovingeffectivenesswithcustomers,suppliersandemployeesUbiquitousReachInternetImpactDetail7PointofViewImpactOverviewSupply

ChainIntegrationRedeploymentofphysicalandhumanresourcestofacilitatedramaticproductivityimprovementsbetterstakeholdercommunicationknowledgesharingandcollaborativeworkenvironmentsleverageofITinvestmentsenhancedaccesstoemployees/outsourcingElectronicmanagementofupstreamsupplychainrelationshipsvendorselectionandnegotiationbillingandpaymentinformationexchangeTightlinkageofend-userdemandtoinventory,R&D,andmanufacturingRedefinitionofentirecustomerexperiencecomplete,frictionlessinformationexchangedifferentiatedexperienceusercontrolledfulfillmenttrackingtargetedloyaltyprogramsNewchanneltocapturegrowthopportunitiesincreasedcustomeraccessaccesstoproductadjacencies/crosssellingintegrationwithphysicalworldTheseresultindramaticchangesacrosscompanyrelationshipswithcustomers,suppliers,employeesandotherstakeholders.CustomerRelationshipManagementInternalBusinessManagementInternetImpactDetail8PointofViewCustomerRelationshipManagement(CRM)EvolutionDescription:Multi-tiereddistributionmodelMassmarketingLimitedinventoryFewvalue-addedservicesTraditionalModelE-CommerceModelStreamlineddistributionmodelTargetedmarketingScaleinventoryandselectionRobustrangeofvalue-addedservicesProducerExample:“Bricksandmortar”bookstoreADistributorRetailerConsumerProducerProducerProducerCommunityRetailerValue-AddedServicesConsumerE-TailerInternetImpactDetail9PointofView(CRM)BenefitsAisacompellingexampleofanE-Commercecustomerrelationshipmodel.Efficientpurchaseprocessquicklog-insearchbytitle,subject,authorreadreviews,recommendationsone-clickorderingreceivebooksbymailSuperiorselectionandavailabilityAdjacentproductofferingse.g.,music,video,othersValue-addedservicesreviewsproactive,tailoredrecommendationsBenefitstoCustomersBenefitstoFirmSubstantiallylowercostsinfrastructureinventorypersonnelDeepcustomerrelationshipone-to-onemarketingpotentialforhigherloyaltypurchasesacrossotherproductlinesmorefrequentpurchasesBroadercustomerbasegeographicreachexpandedpoolofprofitablecustomersInternetImpactDetail10PointofViewSupplyChainIntegrationBusinessModels(SCI)(1of2)Threeprimarymodels...IndustryConsortiaVirtualCommunitiesCompanyExtranetsDescription:IntermediarysponsoredareaswherebuyersandsellerstradegoodsandservicesBuyerorsellersponsoredgroupstocollectivelypurchaseorsell/bundlegoodsandservicesCompanysponsoredgroupcomprisingitsdownstreamand/orupstreamsupplychainBasisforSCI:ScaleScaleSupplierCooperationDriversofValue:Opportunitytoincreasesales/liquidateexcessinventorylowercostintermediarybroadeningofpotentialsupplier/buyerbaseReducedprocurement/salescostsscalebenefitsBroadeningofpotentialsupplier/buyerbaseLowerinventorycostCycletimereductionLowerprocurement/salescostIncreasedsharingofcompany/customerdataNote:*TPNhastwosub-networksTPNPostandTPNRegisterInternetImpactDetail11PointofViewSCIBusinessModels(2of2)CompanyExamples:IndustryConsortiaVirtualCommunitiesCompanyExtranetsFastPartsMetalSitePlasticNetVerticalNetTPN*ANXVIPARTPN*BoeingCiscoCSXDellNote:*TPNhastwosub-networksTPNPostandTPNRegisterSignificantnumberofactiveparticipantsSufficientscaletoachievefavorabletermsinpricingandavailabilityPurchasescaletosecuresuppliercommitmenttouseextranetKeySuccessFactors:InfrastructuretofacilitatetransactionsStructurethatallowsflexibilityinnegotiationanddecisionmakingAbilitytocost/timeeffectivelylinkextranettointernallegacysystemsSmallgroupofcompaniesfocusedondrivingconsortiumeffortCompatibleinformationsystemsacrosssupplychainDreyer’’sGrandIceCreamPitneyBowesInternetImpactDetail12PointofViewSCIEvolutionDescription:Multiplebuyer-sellerinterfacesinbiddingprocessIndividualcompanyscaleinbuying/sellingCatalog-basedselectionandpurchasingoutdatedinventorylistingsmanualprocessTraditionalModelSinglebiddinginterfaceScalebenefitssharedacrossparticipantsVirtualmarketplaceconnectingsuppliersandcustomersUp-to-dateonlineinventorylistingsOnlineorder-takingprocessExamples:TraditionalindustrialmodelGETPNChemdexE-CommerceModelSupplierSupplierSupplierSupplierSupplierSupplierBuyerBuyerBuyerBuyerBuyerBuyerVirtualCommunity/IndustryConsortiumInternetImpactDetail13PointofViewSCIBenefitsChemdexisapowerfulexampleofanE-Commercecustomerrelationshipmodel.LowercostsmarketingleveragemarketingthroughChemdexpresencedistributioncatalogsoverallcostreducedby15%ofrevenueIncreasedsalesdecreasebuyertransactioncostswillincreasedemandBenefitstoSuppliersBenefitstoCustomersIncreasedconvenienceduetoonlineproductinventorymoreaccurate(updateddaily)consolidated(130suppliersparticipating)space-saving(freesupshelfspaceincustomers’offices)comprehensive(fivetimesmoreproductsthanbiggestpapercatalog)Lowercostsmoreefficientordering/purchasingprocesstransactioncostreducedfrom$100to$10or$20InternetImpactDetail14PointofViewSCIEvolution(CompanyExtranets)Description:Multi-tiereddistributionmodelMultiplepurchaseordertriggersBlockordering(manual)LimiteddatasharingTraditionalModelE-CommerceModelIntegratedpurchasing/ProductionModelSinglepurchaseordertriggerAutomaticjust-in-timeorderingDetailedDataSharingSupplierSupplierSupplierSupplierSupplierSupplierProducerExample:TraditionalFoodManufacturerDreyer’sGrandIceCreamDistributor/WholesalerRetailerConsumerProducerRetailerConsumerPurchaseP.O.P.O.P.O.P.O.P.O.InternetImpactDetail15PointofViewSCI(CompanyExtranet)Efficientprocurementprocessautomaticallyupdated/linkedtosalesincreasedforecastaccuracylowercostprocurementdecreasedriskofstockoutReducedinventorylevelsReducedcycletimesBenefitstoProducer/RetailerBenefitstoSupplierImprovedassetutilizationforecastaccuracy/productionplanningReducedinventorylevelsLowersalescostAbilitytocreatestrongercustomerrelationshipwithproducerdatasharingordertakingislower%ofsalestimeInternetImpactDetail16PointofViewSCIEvolutionTraditionalApproach:E-CommerceSCIApproach:Note:*Supplier,Distributor/WholesalerandProducerPartInventoryProductionGoodsInventoryReplenishmentHeldatmultipletiers*,basedonorganizational,legalandownershipconsiderationsStockisheldatthefewesttierswithpartsgoingdirectlyfromsuppliertoproduceronanasneededbasisManualbatchorders,drivensequentiallybytransfersfromonetiertoanotherReplenishmentacrossalltiersdrivenbyactualsales/usagedatacollectedatthecustomerinterfacePlannedbydiscreteorganizationalunitswithbatchfeedsbetweendiscretesystemsPlannedacrossfunctionalandorganizationalboundariesfromsuppliertovendortoconsumerthroughhighlyintegratedsystems,withminimumleadtimesBulkofinventoryisfinishedgoods,dispersedgeographicallywaitingtobesoldLoweroverallinventorylevels.Bulkofinventoryheldas‘workinprogress’’awaitingbuild/configurationinstructionsInternetImpactDetail17PointofViewInternalBusinessManagementEvolution(IBM)Description:Hierarchical,functionally-orientedcommunicationbarrierstosharinginformationcross-functionallyslowtoshareinformationverticallyMultredundantincompatibleLinearcross-functionalworkprocessesseriallyprocessedmultiplehandoffsiterativeTraditionalModelE-CommerceModelFully-networked,flatinformationexchangeFullycompatibleinformationsystemsUniversalaccesstoinformationCollaborativeworkenvironmentInternetImpactDetail18PointofViewIBMBenefitsStreamlinedprocesseslowercostfastercycletimesLower-costinteractionsinformationexchangecollaborationLeverageduseofresourceshumanresourcesequipmentFacilitatedimplementationofglobalstrategiescoordinatedconsistentconcurrentImprovedcreationanddistributionofnewapplicationsfasteasycost-effectiveBenInternetImpactDetail19PointofViewInternetTrendsFasterDramaticallyEnhancedNetworkPerformanceDemographicWavesBroaderCustomizationDeeperIntegrationCross-MediumInternetuserbasebecomesmorereflectiveofoverallpopulationindividualsbusinessesTechnologicalinnovationsmakehighspeedaccesswidelyavailableNewspecializedaccessdevicesoptimizedforapplicationsValue-addedreintermediationOn-lineandphysicaleffortsbecomeintegratedTheInternetisadynamicmedium,andfurthersignificantshiftshaveyettoplayout.InternetImpactDetail20PointofViewTrendImplications(1of3)Thesetrendsimpacteachrealmdifferently.PRELIMINARYCustomerRelationshipManagementOnlineinterfacesandservicesdevelopedtoretaincustomersMoreproducts,servicesbecomesuitableforonlinesaleFASTERDramaticallyenhancednetworkperformance:Marketing/productdevelopmenteffortsshiftfocustoaddressnewdemographicgroupslessaffluentuserschildrenandseniorcitizenswomenNewindustriesexperienceincreasedonlinepenetrationBROADERInternetUserBase

BecomesMoreReflective

ofOverallPopulation:IncreasedrangeofopportunitytocapturecustomerdataasmoreactivitiesareconductedinnetworkedenvironmentPDA,cellphonebasedwebbrowsingnetworkedhomeappliancesDEEPERNewspecializedaccessdevicesoptimizedforapplications:Successfulcompaniescreatecross-mediumcustomerexperienceonlineandofflinepromotionsconvenienceofonlineservice/shoppingcombinedwithrichnessofphysicalworldexperiencedeepenscustomerrelationshipCROSS-MEDIUMIntegrationofphysicalandelectronicparticipation:NewintermediariesarisetohandleincreasedinformationstreamsDynamicpricingmodelsemergeValue-addedReintermediation:InternetImpactDetail21PointofViewTrendImplications(2of3)SupplyChainIntegrationPRELIMINARYIntegrationofdataintensiveactivitieswithpartnersbecomespossibleIndustrialcycletimesdeclineFASTERDramaticallyenhancednetworkperformance:BarrierstoparticipationfallforsmallerbusinesspartnersConsortia/cooperativesincreasebargainingpowerofsmallerplayerspurchasingmarketingBROADERInternetUserBase

BecomesMoreReflective

ofOverallPopulation:CriticalbusinessfunctionswillbetightlyintegratedbetweenpartnersDEEPERNewspecializedaccessdevicesoptimizedforapplications:Moreaccuratecross-companybusinessforecastingwillbepossibleStrongrelationshipswithkeybusinesspartnerswillbecreatedbymixingbreadthandaccessibilityofonlineinterfacesanddepthofpersonalinteractionsCROSS-MEDIUMIntegrationofphysicalandelectronicparticipation:Non-corebusinessfunctionswillbeoutsourcedValue-addedReintermediation:InternetImpactDetail22PointofViewTrendImplications(3of3)InternalBusinessManagementPRELIMINARYVirtualofficesandworkcommunitiessimulaterealworldexperienceFASTERDramaticallyenhancednetworkperformance:Collaborationbetweenoffices/functionalgroupsgreatlyenhancesproductivityBROADERInternetUserBase

BecomesMoreReflective

ofOverallPopulation:Employeeshaveconstantabilitytoreceive/updatecompanydataDEEPERNewspecializedaccessdevicesoptimizedforapplications:IncreaseddepthofinteractionwithemployeesresultsinhigherretentionratesEmployeesarefreedtofocusonhighvalue-addedactivitiesasnon-coretasksareautomatedoroutsourcedCROSS-MEDIUMIntegrationofphysicalandelectronicparticipation:N/AValue-addedReintermediation:InternetImpactDetail23PointofViewMarketValuation(1of2)Note:InternetcompaniesincludeAOL,Yahoo,EBay,Amazon,E-trade,Lycos,Excite,@Home,CNET,Priceline,Geocities,BandInfoseek;Marketcapitalizationsareasof5/6/99;MarketcaptakentobeaproxyforMVAforInternetstocksSource:SternStewartPerformance1,000;YahooFinance!;Companyreports;BainAnalysisOverthepastthreeyears,asmallgroupofInternetcompanieshavecreatedmorevaluethananyotherindustryachievedin10years.TenYearIncreaseinMVA(1986-95)InternetImpactDetail24PointofViewMarketValuation(2of2)Note:InternetcompaniesincludeAOL,Yahoo,EBay,Amazon,E-trade,Lycos,Excite,@Home,CNET,Priceline,Geocities,BandInfoseek;Marketcapitalizationsareasof5/6/99;MarketcaptakentobeaproxyforMVAforInternetstocksSource:SternStewartPerformance1,000;YahooFinance!;Companyreports;BainAnalysisThreeYearIncreaseinMVA(1996-99)InternetImpactDetail25PointofViewAgendaInternetImpactDetailBusinessImpactDetailResponseAlternativesKeySuccessFactors26PointofViewOverviewAllbusinesswillbeimpacted...ThetimingandmagnitudeoftheoverallimpactwillvarybyindustryTherearesignificantpotentialthreatsaswellasopportunitiesPotentialimpactcanbeunderstoodandproactivelyaddressedProfitpoolshiftsandcommensuratemarketvaluescouldbesignificantlyimpactedUltimately,thecompetitivelandscapecouldbedramaticallydifferentfromtodayBusinessImpactDetail27PointofViewEvolutionFrameworkHighLowTransformationPhases(Time)MagnitudeOfImpactExtensionExperimentationParticipationCRMSCIIBMStakeholderImpactsHighMedLowCustomerRelationshipManagementSupplyChainIntegrationInternalBusinessMangementBusinessImpactDetail28PointofViewPhaseIParticipationPhaseIIExperimentationPhaseIIIExtensionPhaseIVTransformationEstablishWebPresenceInternet-EnableTraditionalFunctionsLeverageElectronicPlatformToBuildNewCapabilitiesIntegratedTransformationVeryfewcompanieshaveyetdevelopedaplantotakeadvantageofthetransformationalopportunitiestheInternetenables.E-CommerceTransitionBusiness29PointofViewE-CommerceTransition(1of4)CRMMarketingsitebasiccompanyinformationkeyproductinformationEstablishWebPresenceIBMBuildbasicIntranetpostdocuments/policiesSCIMarketingsitebasiccompanyinformationImpactMinimumbusinessrequirementLowdifferentiationpotentialDeploymentExamplesPhase1ParticipationPhase2Phase3Phase4BusinessImpactDetail30PointofViewCRMDevelopelectronicorderingcapabilitiesEstablishInternet-basedcustomerserviceaccountinformationbilling/paymentInternet-EnableTraditionalFunctionsIBMUploadkeyfunctionsontotheInternethumanresourcesadminSCIExchangepricingdataelectronicallywithsuppliersMakeinventorylevelsvisibleDeploymentExamplesImpactIndustryleaderstakingmarketshareE-CommerceTransition(2of4)Phase1Phase2ExperimentationPhase3Phase4BusinessImpactDetail31PointofViewE-CommerceTransition(3of4)CRMAutomatecustomerserviceBuilddatawarehousingandminingcapabilitiestotargetcustomerProvidevalueaddedcustomerexperience(e.g.,purchaserecommendations,virtualcommunities)LeverageElectronicPlatformToBuildNewCapabilitiesIBMIntegrateinternalfunctionstoprovideseamlessdataflowLinkcustomerpreferencedatatoproductdevelopmentSCIIntegratesuppliersintoERPsystemCreate/utilizevalue-addedelectronicbuyingagentsImpactOpportunityforcompetitiveleadershipDeploymentExamplesPhase1Phase2Phase3ExtensionPhase4BusinessImpactDetail32PointofViewE-CommerceTransition(4of4)CRMDevelopinteractivejointmarketingapproachesCreateseamlessuserexperience,notreplicableinphysicalworldIntegratedTransformationIBMSeamlessdataflowandknowledgesharingacrosstheorganizationSCIIntegratecustomers,suppliers,employees,andpartnersinaninteractivenetworkprovideendtoendsupplychainvisibilityImpactSignificantopportunityforcompetitiveadvantageDeploymentExamplesPhase1Phase2Phase3Phase4TransformationBusinessImpactDetail33PointofViewBusinessChangesImpactFrameworkSuppliersCustomersInternalOperationsInternalBusiness213BusinessDefinition4InternalOperationsBusinessImpactDetail34PointofViewBusinessChanges;ThreatsandOpportunities(1of2)ThreatsOpportunities2SupplyChainManagement:ReintermediationbypowerfulelectronicmiddlemenseizingcustomercontrolLegacysystem/implementationbarriersenablecompetitorstoobtainlowercostpositionEnd-to-endintegrationofoperationsfromcustomerdemandthroughsupplierproductionfastertimetomarketlowerinventorycostDeepenrelationshipwithstrategicsuppliersand/orincreasesupplierbasebreadthtolowerprocurementcosts1CustomerRelationshipManagement:Significantvolumes/mostvaluablecustomersshiftpurchasesCommoditizationpressureasbuyershaveaccesstogreaterinformationandbroadercompetitorsetAbilitytocreateuniquecustomerexperiencethatcannotbereplicatedinphysicalworldNewchanneltocapturegrowthincreasedcustomerbaseproductofferingexpansionBusinessImpactDetail35PointofViewBusinessChanges;ThreatsandOpportunities(2of2)ThreatsOpportunities3InternalBusinessManagement:MosttalentedemployeesleavetojoinInternetstart-upsSignificanttechnologyinvestmenthaslowyieldDramaticproductivityimprovementsthroughbettercommunicationandknowledgecaptureanddisseminationOpportunitytooutsourcenon-corefunctions4BusinessParticipation:RedefinitionofbusinessboundariesunderminescompetitivepositionNewagilecompetitorsfundedwithmuchlowercostofcapitalCreatespotentialnewbusinessparticipationoptionsthroughleverageofassets/capabilitiesOpportunitytoleapfrog/repositionversustraditionalcompetitorsBusinessImpactDetail36PointofViewImpactAssessmentFramework(CRM)Adetailedevaluationofunderlyingcharacteristicsneedstobeperformedforeachindustry/segment.LowerpriceBetter(unique)productselectionandinformationImprovedresponsespeed/accessLowertransactionexperiencecostGreatercommunityvalueGlobalreachexpandsmarketsizeHigh(enough)customermargins/lifetimevalueAbilitytocross-marketwithphysicalworldtoleveragecollectionofuniquecustomerdataLowcustomerservicecostsImproveddistributionandinventorycostsIncreasedassetutilizationDegreeofproductstandardizationEasyonlinesubstitutionforphysicalworld(e.g.,““PhysicalShoppingexperience””notimportantpartofsalesprocess)ProductvaluecommensuratewithdistributioncostAttractiveEconomicsProduct/ServiceConducivetoOnlineSaleUnique/SuperiorCustomerValuePropositionStructuralBarriersSurmountableDistributioninfrastructureProprietaryrelationships(suppliers,funding,affiliates,etc)Regulatory/legal/taxissuesReasonablecost/timingtoconvertlegacysystemsordevelopnewsystemsBusinessImpactDetail37PointofViewInternetPenetrationPotential(BusinesstoConsumer)Source:IndustryandTradeOutlook;StatisticalAbstractoftheUnitedStates;S&PIndustrySurvey;ElectronicIndustriesAlliance;TravelIndustryWorldYearbook;AnalystReports;BainAnalysisThesecriteriademonstratewhyBooksandPCSoftwarehavehadearlypenetrationinbusinesstoconsumermarkets.ModerateLowProductConducivetoInternetHighLowLowHighHighMedium-TermShort-termMedium-TermLong-termBusinessImpactDetail38PointofViewInternetPenetrationPotential(BusinesstoBusiness)Source:Forrester;BainAnalysisComputing/ElectronicsandUtilitiesaretheindustriesthataremostlikelytoseesignificantInternetpenetrationinthebusinesstobusinesssector.HighLowLowHighModerateLowProductConducivetoInternetHighMedium-TermShort-termMedium-TermLong-termBusinessImpactDetail39PointofViewImpactAssessmentFramework(SCI)Underlyingcharacteristicsshouldbeevaluated,indetail,toassessapplicabilityandpotentialvalueofSupplyChainIntegrationinvariousindustries/segments.Product/ServiceConducivenesstoOnlineSaleStructuralBarriersSurmountableAttractiveEconomicsOperationalImprovementsChannelconflict/distributioninfrastructureProprietaryrelationships(suppliers,funding,affiliates,etc.)Regulatory/Legal/TaxissuesCost/TimingtoconvertlegacysystemsordevelopnewsystemsAbilitytocircumventinternalpurchase-approvalprocessDegreeofstandardization/commoditizationAbilitytodeliverproductelectronically(e.g.Software)Frequencyofpurchase/replenishmentProductvalue/bulkratioNeedforfrequentcatalogupdatesTighterintegrationofoperationreducedcycletimeseliminationofredundantactivitiesincreaseddatasharingOpportunitytoeliminatelayersofmulti-layersupplychainAbilitytoaggregatepurchaseswithotherbuyersReducedinventorylevelsLowerpurchasingcostsInternal(laborcosts,materials,etc.)External(increasedpricecompetitiondrivenbyexpandedsupplierbase)IncreasedassetutilizationBusinessImpactDetail40PointofViewImpactAssessmentFramework(IBM)Adetailedevaluationofunderlyingcharacteristicsneedstobeperformedforeachindustry/segment.InternalinfrastructureReasonablecost/timingtoconvertlegacysystemsordevelopnewsystemsValueofknowledge-sharingcycletimereductionproductcostreductionproductimprovement(design,quality)Highcurrentinternaltransactioncosts(e.g.,purchasingprocess)LongcycletimesAbilitytooutsourcenon-corefunctionsandlinkthemelectronicallyHighlevelofcentralizationHighlycollaborativeprocessesDistributedorremotefacilitiesNeedtoshiftresourcesquicklyandfrequentlyPotentialStrategicImpactofIntegrationonCoreBusinessesPotentialforProductivityGainsInternalOrganization/ProcessesConducivetoOn-LineActivityStucturalBarriersSurmountableBusinessImpactDetail41PointofViewAgendaInternetImpactDetailBusinessImpactDetailResponseAlternativesKeySuccessFactors42PointofViewTypicalCompanyContextMostCEOsaregrapplingwithhowtorespondtonumerous,disjointeddecisionsrelatedtotheInternet.Uncoordinatedsetofactivitiesunderwaythroughoutbusinessdifferingstagesofdevelopmentlargerangeofinvestmentsrequired,notprioritizedbasedonimpactLackofconsensusonstrategiccontextwithinwhichtomakecriticalneartermdecisionsUnclearhowtoorganizetowinNumerousalliancesbeingactivelyproposedSeveralsignificantsystemsinvestmentsunderwayunclearROIlackingspecificobjectivesChallengetoattract/retainnecessarytalenttoexecuteResponseAlternatives43PointofViewRoadmapDefineandtracksuccessmeasuresIdentifyandmonitormajortriggersAdjustapproach,definenewexperiments/initiativesEvaluatetimingandmagnitudeofthreats/

opportunitiesinindustrieswhereyou(will)competeGathercompetitiveintelligenceonnewbreedandtraditionalplayersArticulatecompelling“pointofarrival”visionBuildconsensusonshortandlongterm

E-CommerceobjectivesDefinebusinessmodelparticipationLaunchexperimentsandinitiatives(linkedtoobjectives)Defineandputinplaceorganizationstructure,staffingandsystemsCommitinvestmentfundsDeveloprequiredpartnerships/networkDefineandimplementITinfrastructureTrack,MonitorandLearnActandCommitInternal

vs.ExternalSetDirectionResponseAlternativesCompaniesfaceneartermdecisionsbutlackaframeworkandaclearlydefinedroadmaptocriticallyevaluateoptionsandexecuteanE-Commerceplan.44PointofViewSetDirectionE-CommerceObjectives(2)PointofArrival(1)BusinessModel(3)OfferingBreadthCustomerBreadthValueChainParticipationDepthBreadthBusinessObjectivesCurrentPositionTosetdirection,acompelling““pointofarrival””visionandunderstandingofthe