1. HP Dutchworld Electronic Commerce Integrity What happens if something goes wrong? Alexander Drobik Research Director GartnerGroup October 1998

2. Technology Issues Buy vs. build Web security Standardisation Web vs. Extranets EC objects Strategies Coercion/Collaboration Channel extension Supply chain mgmt. Community Extranets E-Marketplace mgmt. Applications EDI E-Storefront E-Procurement E-Catalogues E-Billing/Payment Electronic Commerce and Extranet Applications Management Issues EC outsourcing EC organisation Content and context Regulatory and tax Willingness to pay SupplierCustomer Community Consumers Definition: EC and Extranet Applications

3. Impact of EC on Industry Restructuring Investment by Leaders EC will impact marketing, selling and customer service EC will impact structure of offerings and how delivered EC will restructure the entire industry Information as a Percent of the Total Offering

4. Impact of EC on Industry Restructuring Transportation Consumer Prod. Manufacturing Logistics Investment by Leaders EC will impact marketing, selling and customer service Government Services Automotive Manufacturing Information as a Percent of the Total Offering

5. Impact of EC on Industry Restructuring Retail Grocery Home Services Office Supplies Transportation Book Selling Telecom Consumer Prod. Manufacturing Logistics Recreation and Leisure Cards and Gifts Healthcare Investment by Leaders EC will impact marketing, selling and customer service EC will impact structure of offerings and how delivered Government Services X-Mart Retail Dry Goods Automotive Manufacturing Information as a Percent of the Total Offering

6. Impact of EC on Industry Restructuring Retail Grocery Home Services Office Supplies Transportation Advertising Book Selling Publishing Entertainment Telecom Consumer Prod. Manufacturing Stock Trading Logistics Recreation and Leisure Cards and Gifts Healthcare Investment by Leaders EC will impact marketing, selling and customer service EC will impact structure of offerings and how delivered EC will restructure the entire industry Electric Utilities Travel Gaming Government Services X-Mart Retail Dry Goods Automotive Manufacturing Banking Information as a Percent of the Total Offering

7. High Low Business Value Short-Term Projects Long-Term Strategies Short-Term Strategies Operations Automation Time to Implement B2B Vs. B2C Paths to EC Strategic Success Community Extranets Collaborative Extranets Supply Chain Management Channel Master Extranets Customer Self-Service Unassisted Selling E-Business? Procurement Automation Interactive Marketing Tech.-Enabled Relationship Mgmt. Integrated Web Store Web Brochures B2C Web Storefront and E-Catalogue B2B

8. European Web-Commerce Market European ‘Hockey Stick’ Jam tomorrow BUT some Gems Business-to-Business Focus 1997 1998 1999 2000 2001 2002 $100 BN European Market Inhibitors – Multiple Currencies – Multiple Tax Domains – Multiple Legislation Domains – Low PC & Internet Adoption – Less Perfomant Internet

9. Impact of EC Enablers Over Time 1998 19992000200120022003 Little EC Impact Affects EC Marketing Affects EC Imple. Affects EC Strategy Affects Business Strategy Packaged EC Apps. OBI Procurement Standard Micro Payments Real-Time-Capable Packaged EC Apps. Vendor- Driven EC Stds. XML Standard (content) Agents Web-EC Extranet EC Apps. Internet Security Smart Cards Certification Process- Ware Subsidised Apps. Content Rationalisation EDI WEB-EDI SET E-Payment Standard Distributed EC Object Apps. Networked EC Apps. Component EC Apps. E-Bills

10. Real-Time Applications? Gets Real! High-Speed Private Fibre Net. Dealer Develop- ment Server Dealer Online Dynamic Server Storage Array Web Content Server FTP Server Content Changes New Apps. Interactive Hosting and Development Back End Backup Server Tape Library Formatted data and images Searches & P.O.s Network and Content Redundancy Public Internet Consumer

11. EC Creates Data Velocity Disconnects Purchase Manager or Consumer Front-End EC Technology changes drive the fulfilment processes faster. Seconds or Minutes E-Catalogues, E-Procurement, Messaging, EDI, E-Payments, Interactive Apps. ERP Vendor or Other Packaged Application Proprietary APIs Public Internet EC Integration SW Vendor or Custom Code From SI Vendor Manufacturer Back-End EC WarehouseCarrier Retailer Reseller Available to Promise Non-integrated File Transfer and EDI X-Mart Days or Weeks Purchase Manager or Consumer

12. SCM Visibility and Process Smoothing Plant Scheduling VMI-Driven Spikes Smooth Idealism of SCP Messy Reality How “Smooth” Can Replenishment Get Through the Chain? Deal Buying DC Replenishment Retail Replenishment Flow of Data, Flow of Goods

13. Web SCM: Vendors’ Variability Vision Manufacturing (Sites) Plant Warehouse(s) Distribution Centre(s) Component Assemblers Purchasing Order Management Buying Co-operatives Demand Planning Transportation Planning Distribution Planning Production Planning and Scheduling Capacity Planning Years Minutes Network Planning Deployment Planning Sales and Operations Planning Personalised Supplier Database Personalised Customer Database Carriers/ Fleet Mgrs. Web-Based Apps. and Repositories Inter-enterprise Vision of SCM Applications Planning Horizon Application Integration Layer

14. Reality: Limited Near-Term Variability Manufacturing (Sites) Plant Warehouse(s) Distribution Centre(s) Component Assemblers Purchasing Order Management Buying Co-operatives Demand Planning Transportation Planning Distribution Planning Production Planning and Scheduling Capacity Planning Years Minutes Network Planning Deployment Planning Sales and Operations Planning Personalised Supplier Database Personalised Customer Database Carriers/ Fleet Mgrs. Web-Based Apps. and Repositories Deliverable Reality, 1998-1999 Inter-enterprise Vision of SCM Applications Planning Horizon Application Integration Layer

15. Potential Customers & Influencers Potential Competitors “Just a URL & a Dream” E-Business: High Level & Invasive Suppliers Industry Network(s) Distribution Channels Business Partners Product & Service Creation Logistics & Fulfil- ment Admin & Operations Marketing, Sales & Service Legally Defined Enterprise Supply Chain “Virtual Partners” Informal Info. Sharing Deals Competitors Customers Supply Chain Management Technology-Enabled Relationship Management Electronic Commerce Back Office Web Commerce Front Office

16. E-Business Architecture Components Intranet Users Suppliers and Customers Marketing Logistics Procurement Customer Service Web Browsers: Std. Look and Feel Customer Service Order Mgmt. Inventory Mgmt. Transpor- tation Procure- ment Marketing Firewall APIs, Message Queuing, Processware Firewall Extranet/VPN Common Data Warehouse Semantic Reconciliation Channel Partners Consultantware Transaction Manager Catalogues/Configurators Membership Directory Application Rulebooks Content Databases Dynamic Pricing Personalisation TP Data Cleaning Tools Integration Services EDI/EC Software and Svcs. Extranet Member Controls EC Tools and Services Internet Indirect Channel Direct Channel

17. E-Business Recommendations For Enterprises Analyse the E-business “forcing functions” in your industry or market. Decide when and how to act. Begin to work to get SCM, TERM and EC teams to communicate and develop common goals and strategies. Develop the financials for new business models, new sources of revenue, and new processes and partners. For Vendors Focus on solving the “SI burden” of E-business. Deliver solutions to reduce the 20-to-1 services to software. Partner with applications vendors to deliver quality, reliable and performant EC solutions. For the majority of EC vendors, forget the “land grab” game. Get focused and build a defensible market.

18. Electronic Commerce Integrity What happens if something goes wrong? Thank You You lose your business!