| ------------------------------------- The eBusiness Bulletin e-mail newsletter of BrainStorm Group February 2001 Edition ------------------------------------- In this edition:
SPECIAL OFFER ON BRAINSTORM CONFERENCE REGISTRATION
LEAD
ARTICLES: THE ANALYSTS CORNER: THE BRAINSTORM DIFFERENCE ======================================================= Welcome to this first edition of The eBusiness Bulletin of the New Year! 2001 is off to a fast start and it's hard to believe that our Chicago event is right around the corner (April 16-18). In order to serve you better and provide a more concise format, we've changed the "look" of the Bulletin while maintaining the quality and readability you've become accustomed to. I look forward to your feedback and continued support. Best regards, ============== eBusiness Integration Conference, Chicago - April 16-18: The eBusiness Integration Conference is the leading source for B2B Integration Strategies and Solutions. Click here for the conference agenda and additional information. Receive a Limited Edition BrainStorm Group Pullover when you
register and pay for a 3-day conference package by February 28. Use Priority Code EBB201 when registering. ============== -------------------------- By William Ulrich, eBusiness Integration Conference Chairman and Business process re-engineering (BPR), the hottest management trend of the 1990s, was aimed at streamlining and eliminating business processes to make companies more efficient. But BPR got a bad rap because it focused on layoffs and forced retirements to boost profits and stock values. Today, e-business initiatives have made the need to streamline, integrate and automate processes even more pressing. But this time, we have an opportunity to do it right. Companies are seeking ways to integrate redundant processes, eliminate unnecessary tasks and automate deployment of processes. The intent: Make tasks more efficient and less error-prone. Two things differentiate BPR efforts of the past from today's process integration initiatives. The first is the motivation for process integration. The second is the ability to deliver technological solutions that streamline processes and support new external e-business requirements. The main motivator behind process integration is the need to function more efficiently within and beyond the enterprise. Consider a company that has spread its order-processing capabilities across redundant business units, processes and information systems. It could consolidate those capabilities into one center if management wants to eliminate discrepancies that arise when different people use different approaches to serve the same customers. But unlike BPR efforts, process integration must consider interfaces with various third parties, such as customers, suppliers, business partners and even competitors. The growth of the Internet requires that companies integrate processes that can extend to these third parties. Application service providers (ASP), supply chain consortia, e-marketplaces and other Web-based relationships offer such collaboration opportunities, but only if a company can manage all processes effectively, from procurement to billing and beyond. For example, if your company repeatedly fails to process major orders received from an e-marketplace that you established with competitors, you could lose your position within that e-marketplace. The same is true if processes are too redundant or inefficient to support relationships with your ASPs, suppliers, partners or customers. Process integration is essential to these relationships, which are essential to your bottom line. The second factor behind process integration is our ability to deliver solutions that extend to third parties. IT plays a key role here. Early BPR initiatives ignored intricate, interwoven patterns between technology, data and business processes and downplayed IT's role. To ensure the viability of process integration projects, IT must collaborate with business units and third parties to ensure that solutions deliver value and function both internally and in third-party environments. IT can assist in identifying and documenting where manual processes interface with redundant information systems. For example, if IT knows that two business units access redundant order systems and databases, it can relay that information to those business units. IT can also develop a knowledge base to help track process redundancies across business units. When business units begin integrating and streamlining processes, this knowledge base can help them find where processes can be integrated, eliminated or changed. Web-based process automation tools allow business and IT analysts to create Internet front ends that allow users to trigger or authorize a manual or an automated process. For example, an outsourced sales team could post an order from the road, and an in-house manager could then authorize internally. These tools can also invoke redundant legacy systems through common interfaces as a way to integrate systems. The fact that these tools run on the Internet means that employees, business partners, ASPs and customers can trigger processes internally and remotely. Business process integration and automation pick up where BPR left off. Extending process integration and automation solutions beyond the enterprise delivers the efficiency that management has been seeking for decades. And e-business is the prime motivation for you to pursue these solutions now. Copyright Computerworld, August 2000 ********************Sponsor Message************************* By Peter Bendor-Samuel, eBusiness Strategy Conference Organizations that wish to play in eSpaces must buy protection. They need strategies that allow them to survive the complexities inherent in an environment with a high velocity of change in technology. Major projects can take up to two years to formulate, and organizations can spend an enormous amount of money and other resources on something that will be out of date very soon. They need a doctor. Let’s say I am experiencing physical symptoms of dizziness, weakness in my hands and arms, frequent interference of vision and occasional stumbling or staggering. Would these symptoms indicate separate health problems? Or would they, together, indicate I have migraines or, perhaps, vertigo? Would they be indicative of multiple sclerosis or even a brain tumor? To cure myself, I’d have to keep up with all new research, medicines and surgical techniques. Since I haven’t done that, I’d have to hope that purchasing herbs that treat some symptoms, and an ice pack and over-the-counter headache tablets might do the trick. But the safest and fastest way to arrive at a diagnosis and a cure is to go to a specialist. Doctors spend a great deal of money and many years of their lives learning the intricacies of the human body and its afflictions. They have invested in equipment, and they continue to keep up with new discoveries in medicine and research. In business, an outsourcing supplier is like a doctor. By encapsulating the complexities of new technologies inside a service provider, organizations reap the benefits of the latest advances while avoiding investment and headaches. It’s an ideal solution, one that I refer to as “high-quality impermanence.” With new technologies, such as wireless, where time to market is a driver, outsourcing is the most effective strategy. It’s a plug-and-play strategy that allows you to have high-quality services that are not permanent. In today’s world of rapid technological changes, it’s crucial to be a player and not be left behind. The impermanent solution of a one-year contract with an outsourcer or a monthly subscription fee to an application service provider (ASP) allows organizations to experiment with new technology and expand their revenue channels while avoiding the headaches. In outsourcing, you buy the result of headaches going away. As with a medical doctor, if your supplier does not keep pace with changes as the technology evolves, you have the option to ally with a different supplier. The high-quality services but impermanent relationships in outsourcing is the ultimate strategy for mitigating risks of eSpace technologies and marketplaces. ============== eBusiness Strategy Conference, Chicago - April 16-18:
The eBusiness Strategy Conference is the leading source for E-Sourcing and Infrastructure Strategies and Solutions. Receive a Limited Edition BrainStorm Group Pullover when you
register and pay for a 3-day conference package by February 28. Use Priority Code EBB201 when registering. ===================== ---------------------------------------- The idea of online marketplaces creating nimble buyers and sellers who zip in and out of distribution channels has yet to materialize. The problem is that while there might be 10 significant exchanges for the energy industry, a utility may only have the resources to work with one or two at a time. And once a company invests in integration with one exchange, there's a natural reluctance to abandon the relationship in favor of other alternatives. Forrester Research says that $1.4 trillion will flow through online marketplaces by 2004. We at Doculabs don't doubt that. But with literally hundreds of marketplaces online now, and with new ones going into or out of business all the time, how do you pick the ones that give you the most bang for your buck? And how do you make sure that you aren't spreading your IT resources too thin as they do the dirty work of tying into multiple marketplaces? In an ideal world, companies wouldn't have to place their bets on just one or two marketplaces. A better strategy is to spread those options across a number of marketplaces, giving the buyer or seller a chance to reach customers and suppliers via whichever method provides the best deal. This sounds good in theory, but most of our customers are finding that to be too tall an order--especially considering the sheer number of marketplaces available and the speed with which companies may want to form and dissolve individual marketplace relationships. Integration, of course, is the big problem. Tying in to additional trading partners or marketplaces means publishing catalog content and data, dynamically updating this information, integrating with accounting systems and other back-end systems, and ideally handling negotiations, contracts, and approvals. Suppliers today must go through extensive data translation and integration efforts in order to work with a trading partner or a marketplace. For this reason, most companies that trade online concentrate only on integrating with their high-value trading partners or a limited number of marketplaces. The result is suppliers that are building a small number of point-to-point communications, as opposed to a broader syndication model that would let suppliers easily and quickly tie in to new marketplaces and partners in one-to-many or many-to-many relationships. The marketplaces themselves must shoulder some of the blame. In a recent Forrester Research survey of 50 online marketplace leaders, 72% are deploying homegrown software, and nearly half use labor-intensive methods for integration. These marketplaces are finding that packaged application software is inadequate, so they must resort to using their own solutions and performing manual processing of new marketplace entrants. The result is that some marketplaces are signing up participants faster than they can integrate them. If a given marketplace doesn't make it easier for suppliers to get up and running, suppliers will move on to easier exchanges. It won't get any easier for marketplaces if they continue to base their solutions on shaky infrastructures. The good news is that the marketplaces won't sit idly by. They realize that their success and value is tied up in matching buyers and sellers together in frictionless trade. This means more than just providing a forum for exchange--it means providing an infrastructure that integrates the business processes of buyers, sellers, and the marketplace itself. There's a flip side to making integration drop-dead simple: It's easier--physically and politically--for a supplier to leave a marketplace if it hasn't sunk money in up front. But the marketplaces that bet on simple integration will provide a huge differentiation point that will attract new participants and foster loyalty, just like useful information or advanced trading features do. Simple integration turns a marketplace into a valued broker for ongoing trade between trading partners. One tactic for simplifying integration with marketplaces or other outside trading partners is to use third-party integration products. There is no shortage of software vendors trying to capitalize on the opportunities to simplify inter-organization integration. Vendors of enterprise application integration (EAI) and other middleware components have extended their capabilities beyond company walls to address business-to-business integration needs--including marketplace integration. For example, vendors such as BEA Systems, New Era of Networks, Saga Software, Tibco, Vitria, and webMethods/Active Software specialize in helping disparate systems talk to one another, providing an integration layer that insulates in-house IT personnel from building these connections from scratch. One of the big keys to business-to-business integration is the Extensible Markup Language. This data-definition language gives trading partners a standard way to interpret and exchange data--assuming they use the same data definitions and schemas. Uniform standards haven't been widely adopted yet, despite efforts such as the ebXML initiative and the RosettaNet consortium, which are working to define industry-specific standards for data exchange based on XML. Fortunately, XML servers from vendors that include Bluestone, Microsoft (BizTalk Server), and webMethods provide a means to generate, exchange, and translate XML-based data. This should help companies and marketplaces move forward with XML even while industry standards are still being ironed out. For companies going down the integration path, it makes sense to launch application integration and middleware tools in-house in order to first make connections among their own disparate systems. After building deep legacy connections, these same middleware components can be used to tie in with outside parties. Meanwhile, the marketplaces themselves are beginning to turn to EAI and other integration technologies. Not only do marketplaces want to be able to integrate new trading partners quickly, but complex business-to-business transactions may involve multiple interactions with a number of trading partners using different back-end systems. Those trading partners may range from mom-and-pop operations to large conglomerates with electronic data interchange and other evolved trading systems already in place. For companies that want to play the marketplace field today, the answer is to start deploying translation tools and enterprise application integration components. This approach will enable them to serve up data in a standardized way to multiple partners and will simplify the process of tying them in to back-end systems. Recognize that you're likely to be working with many different marketplaces for different reasons. For example, you may work with several trading hubs in your industry to sell your goods, but you might also work with other exchanges for purchasing office supplies, procuring services, and even handling billing or invoicing. In the longer term--the next year or two--expect the leading marketplaces to begin offering this level of integration. Whether they do it through professional services, better integration tools and standards, or third-party brokers, these exchanges know they must support seamless transactions and quick integration of new partners to survive. While companies will still need to integrate their own back-office systems, they will eventually be able to rely on marketplaces or brokers to handle their business-to-business integration. The problem is that with so many exchanges available, how do you know that you're betting on a winner right now? And since massive consolidation of marketplaces is inevitable, how do you make sure that you can quickly move elsewhere and strike new relationships so you don't get burned by investing in a marketplace that becomes obsolete? The key is to keep your options open--and in the near term, that means adding the technologies that put your company in a position to syndicate your catalog data and tie in to any standard-based marketplace or trading partner. Don't just debate your strategy for another year or invest in expensive point-to-point integrations. Instead, start looking into technologies that will simplify your life, enable you to play the field, and insulate you from the instability and eventual shakeout of the online marketplace arena. James K. Watson Jr. is president of Doculabs, and Joe Fenner is a senior technical writer with Doculabs, an independent advisory firm that helps companies choose technologies and strategies for E-business. You can reach them at info@doculabs.com. Copyright InformationWeek , October 16, 2000 ********************Sponsor Message*************************
By Jeetu Patel, Vice President of Research, Doculabs As competition intensifies in the market for online trading hubs, marketplace operators know they must extend their offerings to provide more than just commerce capabilities. To attract and keep trading partners, they must expand their value. We're already seeing the addition of horizontal capabilities such as personalization, communities of interest, portal capabilities, and handling of requests for quotes and requests for proposals. Such capabilities provide value for buyers and sellers beyond just transaction support while enabling marketplace operators to embed themselves more deeply in their trading partners' relationships with each other. But it's vertical extension--the addition of specialized services--that will drive the next evolution of E-marketplaces. Vertical enhancements include add-on services that let the marketplaces control the end-to-end trading cycle. Such services will focus on fulfillment, settlement, and returns processing. Companies in vertical industries, such as banking, financial services, insurance, and shipping, all have a vested interest in getting their piece of E-marketplace trade. Think of all the financial services that would simplify life for E-marketplaces and their trading partners. For example, E-marketplaces need credit validation services to verify that buyers have sufficient funds available to back their purchases before allowing them to submit a purchase order. Likewise, in many cases there is a need to create escrow accounts to hold goods until funds are actually received. Another key area is cash management. Marketplaces need lines of credit for operating capital and to expand their businesses. They could extend lines of credit to a buyer in order to settle the buyer's account with a seller, while charging the buyer interest or fees for the advanced funds. Sellers are interested in receiving payment quickly, and the marketplace could guarantee timely settlement for a fee, of course. Then there's shipping, fulfillment, and return processing. Many low-tech trading partners don't have the sophisticated infrastructures needed to handle these functions, so marketplaces must take on more responsibility for delivery and returns. Insurance can also play a role here, as marketplaces provide insurance on shipments or returns for orders originating from their sites. Finally, invoicing, bill presentment, and payment are key services for marketplaces. If buyers and sellers use a marketplace for trade, it's logical for them to use it as the conduit for invoicing and payment processing. Again, this represents not only a value-added service for marketplaces but another opportunity to make money on the service. This vertical services trend will apply not only to dot-com marketplaces but brick-and-mortar companies that are adding E-marketplaces to expand their businesses. For any marketplace, the challenge lies in integrating all of these services into their offerings. And the choices for marketplaces are changing. Of course, marketplaces can always strike partnerships with service providers and attempt to integrate them into their existing infrastructures. This poses plenty of technical challenges, not to mention the business challenges of forming multiple partnerships and making bets on which partners will be successful over time. With this approach, switching costs are extremely high. Knowing this, we expect the vertical service firms to jump into the market with packaged offerings. Likewise, insurance, shipping, logistics, and inventory management providers will likely provide bundled offerings of technology and services. For example, UPS Capital is building a B-to-B E-billing consolidation service that will also provide cash management services and an electronic lockbox. Clearly, the scope of services that marketplaces will offer is poised for explosion. This means that marketplaces can offer more compelling hubs and can provide end-to-end commerce capabilities, something that's particularly appealing for low-tech trading partners that are hesitant to spend big bucks on building their own E-commerce infrastructures. The key to success is choosing the right partners to create a compelling package, while keeping it simple enough for marketplaces to justify their investments. Jeetu Patel is VP of research with Doculabs, an independent advisory firm that helps companies choose the right technologies and strategies for E-business. He can be reached at info@doculabs.com. BrainStorm Group's Conferences are the ONLY executive forums featuring:
======================= This newsletter is a service of the BrainStorm Group's eBusiness Integration Conference Series and the eBusiness Strategy Conference Series. In Northboro, Massachusetts: For Sponsorship Information: For Registration
Information: For Call for Papers:
Return to Newsletter Index |