Forrester Forum Prepares Companies for Dynamic Trade in the Internet Economy

Business Wire, Nov 16, 1998

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Nov. 16, 1998--The Internet economy will be shaped by the three rules of dynamic trade: Customer service eclipses products; real-time demand drives production; and pricing matches market conditions. On Nov. 5 and 6, more than 600 senior-level executives gathered at the 1998 Forrester Forum in Boston to learn how dynamic trade will affect their business relationships and processes.

Dynamic trade leverages technology to satisfy current demand with customized response. It pushes Internet commerce beyond today's brochureware, on-line order taking, and customer self-service to enable many-to-one interactions like aggregate buying and selling. To compete under the rules of dynamic trade, firms must achieve agility -- the ability to execute fundamental business change at high speed -- by building a flexible execution environment.

"Flexible execution demands that firms redefine their business relationships, optimize their internal and external business processes, and adopt new technologies to support rapid but incremental change," said Bobby Cameron, principal analyst in Forrester's Packaged Application Strategies service. "In spite of the challenges these tasks present, the key to dynamic trade success will be cooperation among business partners."

To create the cross-company agility required for dynamic trade, companies need to coordinate their external business policies with trading partners through an extranet. Integrated business processes will increase the velocity of the supply chain, decrease cycle time, and improve service levels while capturing information on buying habits and supplier capabilities. The results: lower supplier costs as well as reduced costs for operations, sales, and marketing.

Companies must also be prepared to contact customers in any channel they use, turning service into selling opportunities in real time. To meet customer expectations, sites must give users a guided selling experience that incorporates expanded search capabilities, flexible merchandising, intelligent cross-selling and upselling, and customer service. Companies should use self-service and personalization to lower costs and increase sales, while on-line bidding and auctions will ensure that prices reflect market conditions.

Forum attendees acknowledged the importance of dynamic trade to their companies' Internet commerce plans. Forty-eight percent of audience members indicated that their companies are preparing for dynamic trade, while 31% have already started to adopt flexible execution. Similarly, 42% expect to implement advanced planning systems with their supply chain partners within 24 months.

Attendees identified lack of executive buy-in (35%), internal politics (27%), and channel conflict (21%) as the principal barriers to successful iCommerce efforts. And 58% felt that the need to overhaul business processes presented the greatest obstacle to supply chain agility.

When asked about their expectations for iCommerce, 45% indicated that their companies will sell more than $1 million in goods and services on-line in 1998, and 38% will purchase at least $250,000 via the Internet. Looking ahead to 2001, 80% will sell more than $1 million on-line, and 84% will make at least $250,000 in on-line purchases.

The Forrester Forum Series is designed to provide opportunities for senior executives to informally share ideas, discover the latest technology tools and vendors, and develop successful business strategies. "Preparing For Dynamic Trade In The Internet Economy" was the last of six Forrester Forums for 1998. Plans for the 1999 Forrester Forum Series will be announced in late November.

Forrester Research, Inc., is a leading independent research firm offering products and services that help its clients assess the effects of technology on their businesses. The company provides analysis and insight into a broad range of technology areas such as new media, computing, software, networking, telecommunications, and the Internet, and it projects how technology trends will affect businesses, consumers, and society. Additional information about Forrester Research and the Forrester Forum Series can be found at www.forrester.com.