The Future of e-Commerce Georgios Georgiou Business Innovation Services IBM Global Services IBM Cyprus.

The Future of e-Commerce

Georgios Georgiou

Business Innovation Services

IBM Global Services

IBM Cyprus

Understanding the promises of e-commerce

Ready for the New Frontier

How Do You Dominate

Our Objectives

Electronic Commerce Is ... Buying and selling across the supply chain Another way of doing business electronically Integrating with systems, applications and processes

Manufacture/Distributors

Seller WCS

Web Browser

XML/Program

Web Browser

Business-to-business

Supplier

Supplier

Supplier

Buyer

Buyer

Buyer

WCS

Buy-side/ Sell-side

Tools

e-Marketplace

Consumers

Seller WCS

Web Browser

Web Browser

Web Browser

Business-to-consumer

New global opportunities

New rules of engagement

New competition

New customers

e-commerce ... A Whole New World!

Business to Consumer Growth

$7.7B

$35B

1999 2000 2001 2002

e-commerce Growth WW

1999 2000 2001 2002

$48B

$1.3Te-commerce Growth WW

Business to Business Growth

e-commerce Growth

e-commerce Drivers

Business

Improvedefficiencies andcycle times

Customer loyaltyNew opportunities

for revenue growth

Customers

ConvenienceEffectivenessValue

Integrated Product Development

Integrated Supply Chain

Procurement Production Fulfillment

Customer Relationship Management

Human Resources Finance

ibm.com

e-procurement e-care

e-commerce

Suppliers Customers

Employees

Wave 1

Wave 2

Wave 3

Since 1993 IBM has:

Improved efficiencies and cycle timesSaved $3.6 billion in materials acquisition cost Cut overall logistics costs by 24% Reduced annual IT costs by 45% Improved on-time shipment to 90%-98% Shortened delivery cycle time by 55% Improved inventory turn by 44% Put 80% of parts on consumptive pull Shortened demand/supply planning cycle from 60 to 20 days

Customer loyaltyReduced supplier listNew opportunities for revenue growthCustomer Relationships

One Proof Point

B2B Trends: e-marketplaces

More than 8 million participants expected by 2002 and more than 3 million sellers participating in e-Marketplaces by 2002

0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004

Bilateral Trade e-Marketplaces

E-Marketplaces are:Neutral Internet based intermediariesFocused on specific industry verticals or specific businesses processesHost electronic marketplacesMediate any-to-any transaction among businesses.

Horizontal- focused on reducing the inefficiencies of spot purchasing

Vertical- facilitate the exchange of manufactured inputs to specific vertical industries

Vertical Exchanges

Horizontal ExchangesA

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spac

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Uti

litie

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Ele

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Au

tom

oti

ve

Insu

ran

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Hea

lth

care

Pet

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emic

als

Fin

ance

CP

G

Tra

vel &

Tra

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ort

.

e-Marketplaces Are Here

ContentManagement

Commerce Community

Advertising /Promotion

BuyerServices

TechnicalFunctions

SellerServices

Support Services

E-MARKET

What functionality do e-markets provide?

Content ManagementPersonalisationSearchMulti-language

CommerceCatalog ManagementPrice Discovery- RFQ, Fixed Pricing, Auction, ExchangeTransaction ProcessingPayment Processing

AdvertisingTargeted AdvertisingCampaign Mgt.Ad performance monitoring

CommunityDiscussion ForumsBulletin BoardsChatMessaging

SupportMember registrationMember SupportLogisticsSite Analysis

Buyer ServicesRegistrationCatalog populationIntegration

Seller ServicesRegistrationCatalog populationIntegration

Technical FunctionsAny to any connectivitySecurity

eMarketPlaces

Expand to New Markets or Geographies

OlympicsLargest quadrennial event in the worldProvide intranet for 260,000 members of the Olympic family (athletes, coaches, officials and media)

Deployed e-commerce for merchandise andTicket Sales!

Expand to New Markets or Geographies

Olympics: Business ValueHandled 11.3 billion hits during the GamesEntire Olympic Web hosting complex was 100 percent available from start to finish

IBM results system carried times and scores of every event from every venue to more than 20,000 broadcasters and world news press agencies

Transaction that is partially or completely facilated by the use of mobile wireless means and takes

place between 2 or more parties and involves the 2-way exchange of

goods/services for monetary consideration

Mobile: Business to Everywhere!

— Aberdeen Group, August 2000

“

”

0

100

200

300

400

500

600

1998 2001 2003

Mobile Devices

0

10

20

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60

1998 2001 2003

IT Revenue

The Market Is Real!

— Forrester, 2000

Th

ou

sa

nd

s

Bil

lio

ns

wirelessPDA

Personal Digital Assistant w/modem smaller screen, often no keyboard HTML browser PALM VII, Psion, PocketPC, ....

cellphonew/SMS

Short Message Service == 160 character text messages

like pager or instant messages receive-only or receive & send

laptop w/wireless modem standard browser no special application considerations

laptop w/wireless

modem

cellphonew/WAP

cellphone with tiny or small screen Wireless Application Protocol (WAP) with

Wireless Markup Language (WML) browser Japan: i-mode & cHTML limited keyboard

Mobile Devices

B2B/B2C Purchase and receive notification via cell phone/PDAOrder from downloaded interest listObtain price quotesLead Management / Distribution

AuctionsRegistration via browserEvent notification via SMS/WAP

MarketplacesDynamic marketplace functions (e.g., RFQs)Exchanges

Vertical MarketsHealthcare: Patient Tracking and reportingPharmaceuticals: Samples and signature management

Mobile Scenarios!

e-commerce

e-commerce is Just the Beginning

93% of CEOs view customer retention as most critical

success factor!

It costs 5-10X more to acquire a new client than retain your

current customers

Companies lose 50% of their Customers every 5 years

Know Thy Customer

Explicit - Registration/Q & A - Legacy data - Third party sourceImplicit - Past history - Current activity on site

- Usage analysis- User analysis- Commerce

analysis- Data mining

- Ads- Promotions- Up-sell- Cross-sell- Configurations- Customization- Editorial (content)- Updates- Reminders- Loyalty programs- Service and support

Business Intelligence

Customerdata

Content

PersonalizationFramework

Business Manager

What'sdelivered

POS

Callcenter

Web

Print

e-mail

Relationship MarketingProcess

Product Creatives Editorial Images

Customization Targeting Prediction

e-commercee-commercee-commercee-commerce

e-commerce Integrates Everything

Getting Started Develop a corporate-wide, customer-driven strategy

m-commerce integral part of any e-biz strategy

Define Measureable GoalsImproved EfficienciesCustomer LoyaltyNew Revenue

Determine your requirements

Degree of e-Commerce functionality

Data warehousing and data mining

Integration of e-Commerce and legacy apps

Web site hosting

Web site design

e-commerce skills assessment or consultant costs

Requirements

Gartner Group, The Real Cost of E-Commerce Sites, May 1999

$20M

$1 million to $5 million

$300,000 to $1 million

Get on the Map Run with the Pack Market Differentiator0

5

10

15

20

Future Cost of an E-Commerce Site (Circa 2000)

"Increasing efficiency through Internet transactions will result in an estimated $57 billion in cost savings."

Executive commitment

Cross-functional Internet team

Experience (Start simple, grow fast!)

Customer-centric seamless experience

Customer intimacy

Fanatical customer service

What works

What works Experienced web developers

Integrated with existing systems, processes

Robust, secure, and available environment

Accessible to your audience

Be prepared for the unexpected!

“e-businesses promise to create the richest, most diverse marketplace the world has ever seen.

Now is the time to exploit this opportunity, or be exploited by those who do!”

Plan for Success!