Electronic commerce: the work is just beginning - roundtable discussion at SIM Interchange conference in San Francisco 1996 - includes related articles on electronic commerce and productivity and the Internet - Internet/Web/Online Service Information

Software Magazine, Jan, 1997 by David R. Brousell, Patrick L. Porter, Deborah Radcliff, Theresa Rigney

Doing business with customers, suppliers and partners electronically holds much potential and promise. But to realize benefits, say IS executives, IS must first sort through infrastructure, security, development tools and management issues.

At the recent SIM Interchange conference in San Francisco, hosted by the Society for Information Management, Software Magazine met with a group of senior-level IS executives to discuss key issues related to electronic commerce.

Q: What does electronic commerce mean to you and your company?

Stevenson: Lennox International [a vendor of heating, air conditioning and refrigeration products] is beginning to see a higher and higher recommendation from our dealer group saying [we would like to] electronically do order management, shipping status, price quoting, parts control, etc. We may have a higher percentage of our orders that take place without the overhead of human contact, the human operator handling the phone calls. Second is the Internet's ability to work for our field sales force, where we can cut down the alternative mechanisms and the cost of 1-800 service for dial-in for our field sales force and the ability to co-link data from new client/server systems out to laptop systems. The primary ingredient is customer preference to do electronic commerce with us as opposed to voice commerce.

Eastin: I think Starbucks would look at electronic commerce in two ways: what's internal and what's external. Because our whole business is associated with direct contact to the consumer, electronic commerce first for us will be focused on the consumer more than it would be on our vendors or other outside sources. Externally we do have a mail order business, we're currently on AOL and we are looking at how we can make our next steps into the other delivery mechanisms that are Net-based, as well as the standard mail order. We call it direct response. We are in the process right now of investigating how to reach the consumer from a brand image perspective through the Net.

Baumann: Our definition of electronic commerce is very broad. It's basically just another way of conducting business. We think about it from a customer or broker or supplier chain point of view. In the reinsurance business it's all about partnering. A lot of people think electronic commerce starts with EDI but we go a step higher and say it's faxing and mail, voice, data, text, video. It's any way that we communicate with people electronically and globally.

Fritz: Today we do a great deal of EDI and bulletin board activity, but we see a lot of that transferring to the Internet. That kind of commerce just continues to be a much better tool for us to stay on top of our information flow. But we're also looking at the ability to transport meter reading information and service order information without having to build a great deal of infrastructure.

Q: Do you see electronic commerce becoming a core function in the company or just an extra tool?

Fritz: At Atmos, we see it as an added tool, not really anything driving the core business functions.

Temares: An added tool, the same way as a fax is an added tool for voice mail or E-mail or whatever mail you want to use. It's another way of communicating, it's another way of getting your information across.

Stevenson: It may replace a current functionality at this point or it may provide a new functionality that we have not been able to solve economically in the past. But right now I think it's still a little early to tell and our prayers, I think, probably around the table, are that both will happen as a by-product of the Internet environment that we're seeing.

Q: So let's see if we read you right: Are you or the company thinking about E-commerce as a replacement for EDI or something that's going to supersede EDI?

Fritz: As a replacement for EDI. The real attractive part that we see is we're a very rule-oriented company and today we go to 110 sites. In the future, we hope to make that more like 40 to 50 sites, and be able to download this information to the Net rather than build expensive infrastructure. We deliver some 700,000 bills a month at this point, soon to be over a million bills, and we think if we can just get a portion of these bills on the Net within the next three years, it'll be very attractive to us.

Q: What do you think that'll produce in terms of cost savings in billing? Do you have any feel for that yet?

Fritz: We don't have a feel for it yet. We know it's going to be substantial because you have all the paper activities of envelopes, the bill itself, the printing of the bills. The postage is tremendous. We feel like we'll be able to give customers a fairly nice discount if they do commerce through the Net.

Q: It sounds from what you're saying that you're all looking at it at almost a very basic operational level. We're not hearing the words, 'My company expects a strategic advantage out of electronic commerce,' or, 'My company expects an innovative new business to emerge out of electronic commerce.' Are we reading you right or are we off base?