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Leonie Valentine IntraCom Australia. Revolution the e-Business issue is not one of technology, we...
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Leonie ValentineLeonie ValentineIntraCom AustraliaIntraCom Australia
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RevolutionRevolution
the e-Business issue is not one of technology, we havehad many new technologies that have assisted business
and commerce, from the automobile to the facsimile
the real e-Business issue is the revolutionoccurring in the way business is done
this change is akin to the industrial revolutionin terms of its impact on company,and country, fortunes and survival
the only difference is that the industrial revolutiontook around 50 years whereas this revolution
will take less than 5 years
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Money Really MattersMoney Really Matters
there are only two real parts to e-Business
making moneymaking money
and saving moneyand saving money
too much media attention is on the former
rather than where the real action is
reducing business costs andreducing business costs and
improving communicationsimproving communications
for increased competitive advantagefor increased competitive advantage
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e-Business Resultse-Business Results
General ElectricGeneral Electric30% labour saving in Lighting Division maintenance supplies
and 15% materials price decline due bidding processnow deploying ‘trading extranets’ to all divisions,
expect $5 billion (14%) trade with 40,000 suppliers by 2001
CiscoCisco78% of orders handled over the net
- over $30 million per day -80% of customer service issues handled online
cut $1.5 billion in costs over past 3 yearswhile revenues grew to $12.2 billion from $1.3 billion in 1994
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IBM e-Business ResultsIBM e-Business Results
e-Caree-Caresaving of 70% to 90% for each customer call to ibm.comestimated 1999 customer support saving of $750 million
e-Learninge-Learningsaving of $400,000 for every 1,000 classroom
days delivered over the web:30% of internal training materials delivered online
in 1999 for anticipated savings of more than $120 million
e-Procuremente-Procurementover 6,700 suppliers in its online procurement system:
expects to buy $11 billion in goods and servicesover the web in 1999, saving at least $240 million
US Business Week, 13 December 1999US Business Week, 13 December 1999
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e-Business Resultse-Business Results
Federal ExpressFederal Express3 million shipments per day
FedEx intranet includes all policy manuals, sales presentations, etc - no hard copy versions
online WISMOs saving 175,000 man hours per month
Telstra White PagesTelstra White Pagesapproaching 1 million searches per week
each 013 call costs Telstra around 60 centssavings of around $20 million per annum
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Serious e-BusinessSerious e-Business
e-Business will be worth US$ 251 billion in 2000(up from US$ 19 billion) this year
and US$ 1.4 trillion by 2003
In contrast, consumer e-commerce is predictedto be worth a fraction of that, US$ 41 billion
Globalisation, escalating competition and theemergence of new technologies are fuelling the growth
Forrester Research, October 1999Forrester Research, October 1999
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Worldwide commerce on the webWorldwide commerce on the web
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US e-Business Internet CommerceUS e-Business Internet Commerce
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PriorityPriority
"I don’t understand the technology, and I never will.
But you don’t have to.
You have to understand what it can do for you.”
“We are moving from an old economy to a new one.
Every business has to find new ways of operating.
I cannot tell if it is going to be successful at News
Corporation, but everything will be different.”
Rupert Murdoch - Chairman, News CorporationRupert Murdoch - Chairman, News Corporation
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PrioritiesPriorities
"I don’t think there's been anything more important
or more widespread in all my years at GE.
Where does the Internet rank in priority?
It's No. 1, 2, 3 and 4.”
John F. Welch - Chairman, General Electric CompanyJohn F. Welch - Chairman, General Electric Company
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IntegrationIntegration
”The Internet is ultimately about innovation and integration.
Innovation is what your objective is -in cost structures, marketing, sales, supply chain.
But you don’t get the innovation unless you integrate web technology into the processes by which you run your business.
The true revolution coming from the web is whenthe web can get integrated with business processes.”
Louis V. Gerstner - Chairman, IBM CorporationLouis V. Gerstner - Chairman, IBM Corporation
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Case 1Case 1
global lubricants company
approached the strategy as the first step
distribution channel ‘value add’
ongoing competitive advantage
simplify processes and reduce costs
improve customer knowledge
improve supplier and alliance partner interactions
initial country selected for consumer change
full management commitment
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Case 2Case 2
global technology company
intranet / extranet focus
two prior intranets - without user acceptance
over-use of email
high levels of inefficiency
access restrictions - islands of information
significant cost and productivity opportunities
difficult management ‘sell’
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Case 3Case 3
Australian automotive group
highly successful Internet site
well underway with new ERP system
dealer interaction improvement
parts distribution review
customer database consolidation
customer profiling
long term brand positioning
strong management commitment
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Critical Success FactorsCritical Success Factors
senior Executive commitment to the vision
understanding how the business processes change
identification of priorities
indication of costs and benefits
acceptance of investment required
identification of the strategic and operational risks
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expense overhead expense overhead
productivity tool productivity tool
revenue tool revenue tool
competitive advantage competitive advantage
survival tool survival tool
‘‘this is not an option’this is not an option’
John Chambers - CEO, CiscoJohn Chambers - CEO, Cisco
ThreatThreat
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