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Abstract -- Internet: Improving the Actual Benefit and Reducing the (Hidden) Cost Commercial and Business Aspects Track
C4: Future of Commerce on the Net

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Internet: Improving the Actual Benefit and Reducing the (Hidden) Cost

Veenis, Joop ( jve@tg.nl)


This paper will focus on how to increase the benefit and reduce the costs of establishing a commercial service on the Internet today. Quite a number of organisations are capable today of implementing the technical means for connection and information exchange on Internet. This by itself does not create a competetive edge for their business. There is more ground to be covered to acheive this. We will focus in our presentation on different ways to increase commercial exploitation of internet capabilitues as well as how to reduce related costs.

Based on Porters value chain we will analyse the need for information of different parties involved in a business process. The capability to provide the right information, in the right form, for the right price at the right time forms the basis of beneficial exploitation of the Internet.

To fully exploit the Internet capabilities available most companies face the chalenge to interface (on application and information level) the required Front office services with ( the often widely diffused) Back office applications, databases and networks. This might prove to be a costly and troublesome experience. Quite some time here is spent in choosing the right standards for supporting the integration of old and new information systemens.

The "Me-too-effect" is occupying the minds of Dutch companies today. Thanks to the Al Gore Hype. Companies are eager to enter and provide information they consider worthwhile, often without proper investigation of their chances to create a substantial userdemand for their service. Hence they involve themself in a costly adventure without clear sight on any potential benefits. In this presentation we will address the use of Internet as a communications medium between organisations (and individuals). We want a closer look on factors that drive the need for information. Currently providers face the problem that most Internet usage is based on window-shopping/glancing and not on the professional buying of services. Information consumers and suppliers just jumped on the bandwagon of the electronic highway and hold high expectations for business benefits. Early adopters are starting with information storefronts. Behind the often well dressed shopping-windows, the shop itself is often empty and the concrete buying of services still "under construction". Online ordering and other interactive enhancements are lacking. Most companies need to get used to the Internet culture where purchasing service is often the result of almost random navigation of users through "cyberspace", search tools and directories.

At Twijnstra Gudde, we use the so called strategic square or model. It can be used to develop a strategy based on these four questions: What do we want , What are we able to do? , what must be done and what is feasible ? In this case it is useful when considering alternative strategies for exploiting Internet capabilities for business and it can help your organisation when you want to establish a service. We consider the following steps necessary for establishing and maintaining a service as a provider. The first step is to invent a service that supports a businessprocess. We use Porters value chain and examples taken from the book "Doing bussiness on the Internet" by Mary J. Cronin. The next three steps are to develop, implement and promote the service, after this the service can be optimized and costs might be reduced.

When you have established a clear goal, based on the need for information by different parties involved, it is time to develop the service. Three main area's of expertise are required for this:
- communication and marketing,
- organisation
- technical

To implement the service in practice a design and planning must be rolled out. The required functionality must be translated to Internet capabilities. In order to interoperate with other systems connected to the Internet and to ease the integration, standards and product must be purchased or hired/rented. The initial investment can remain quite low (thanks to a large number of WWW-providers). To enter the next fase of interactive Internet-presence, most companies face a more troublesome (and costly) effort to re-engineer and integrate the information systems in the office with the Internet-Store-front. It's in this area where internal use of Internet-based technolgy will assure ease of compatibility. Judging from our experience E-Mail can prove very effective to provide the missing link between front and backoffice and support the bussiness process. To efficiently manage the change of technology it is important to choosing the right combination of standards for a certain period of time. Three processess need to be taken into consideration for this, they are: the standardisation process (community arena), the manufacturing process (vendors) and the implementation and usage (your organisation). Other optional management instruments are freezing all processes from time to time using:. standards- & procurement profiles and prefered suppliers, testing (conformance & interoperability) an integrated management platform (WWW-MIB) and last but not least consistent naming and addressing.

The next step to further integrate the Front-store with the Back-Office the customer's questions, queries, orders etc. as well as replies, can be moved via E-Mail (or WWW-SQL-Gateway) to the internal desktop (and databases).

Not all design problems can be solved internally today. Internet-security and Internet Cashregisters are still evolving today and developments need to be closely monitored.

After the Service is established and stable the organisation should measure it's use and optimize it where possible.