With the installation of iProcure, Laminated Products achieved a unified purchasing system. Budgeting is now easier and more accurate, and invoice preparation is much quicker. Electronic purchase orders are sent to vendors instantly. This means spare parts are delivered quickly, and redundant administrative duties are cut.
"I am pleased with the time savings iProcure affords us," Aulozzi comments. "We often need to do batch purchase orders, as many as 10 to 12 per batch. Faxing these can take a lot of time. To purchase electronically through iProcure is a matter of seconds."
Paired with MP2 Professional, iProcure automates purchasing and frees up maintenance workers to focus on more important tasks.
"The nicest feature of MP2 Professional for us is the inventory tracking module and its ability to automatically re-order when parts get low," says Aulozzi. "Now, we know exactly what parts we have, and what we will need in the future."
Monday, February 11, 2008
The Ability to Plan Ahead
With its new system, the maintenance shop can estimate how long each task takes and plan ahead accordingly.
"I use the task and work order modules frequently," says Aulozzi. "We have about 80 monthly preventive maintenance tasks set up in MP2, and we can now monitor how quickly these tasks are being completed. MP2 gives me a more accurate reading of our efficiency."
In addition, Laminated Products uses MP2 Professional to track equipment histories and perform preventive maintenance.
"Working with MP2 is a tremendous help because it makes everything easier to manage," Aulozzi comments. "We can look at the history of the machine and the spare parts used. Based on that, we can keep the right parts on hand. Because downtime is so critical for us, we rely on this feature."
iProcure's Purchasing PowerMP2 Professional's open architecture enables its integration with iProcure online purchasing software. iProcure allows companies to purchase maintenance, repair, and operations (MRO) spare parts directly from the MP2 Professional system. The software provides 24-hour access to the most current catalogs of the nation's leading MRO suppliers.
Aulozzi is pleased with the suppliers available through iProcure. Not only are their rates highly competitive, but they also search for parts they do not carry regularly.
"The suppliers through iProcure are very flexible," Aulozzi says. "They are willing to work with me to get the right part when I need it.
"As iProcure grows and adds more suppliers, we will have more choices," he says. "We will continue to automate our maintenance and purchasing cycles even more in the near future."
"I use the task and work order modules frequently," says Aulozzi. "We have about 80 monthly preventive maintenance tasks set up in MP2, and we can now monitor how quickly these tasks are being completed. MP2 gives me a more accurate reading of our efficiency."
In addition, Laminated Products uses MP2 Professional to track equipment histories and perform preventive maintenance.
"Working with MP2 is a tremendous help because it makes everything easier to manage," Aulozzi comments. "We can look at the history of the machine and the spare parts used. Based on that, we can keep the right parts on hand. Because downtime is so critical for us, we rely on this feature."
iProcure's Purchasing PowerMP2 Professional's open architecture enables its integration with iProcure online purchasing software. iProcure allows companies to purchase maintenance, repair, and operations (MRO) spare parts directly from the MP2 Professional system. The software provides 24-hour access to the most current catalogs of the nation's leading MRO suppliers.
Aulozzi is pleased with the suppliers available through iProcure. Not only are their rates highly competitive, but they also search for parts they do not carry regularly.
"The suppliers through iProcure are very flexible," Aulozzi says. "They are willing to work with me to get the right part when I need it.
"As iProcure grows and adds more suppliers, we will have more choices," he says. "We will continue to automate our maintenance and purchasing cycles even more in the near future."
A Better Way to Work
Clearly, Laminated Products needed a comprehensive system to monitor maintenance activities, from in-house work orders to parts inventory. MP2 Professional is specifically designed for maintenance operations at facilities, offering features such as preventive maintenance (PM) controls, spare parts tracking, and inventory management.
In addition, MP2 Professional helps track equipment and monitor maintenance costs using the secure and reliable Access database for Microsoft Windows® operating system. Access integrates data from sources such as spreadsheets and other databases to generate, analyze, and create reports quickly and easily. The Windows-based graphical interface means employee training is minimal.
"The involvement with Microsoft was a selling point for me," Aulozzi says. "I am very comfortable using their software. Coupled with the comprehensive features of MP2 Professional and iProcure, our choice for maintenance software was simple."
Both MP2 and iProcure were developed in part with Microsoft's BizTalk, an e-commerce framework that makes it easy for businesses to integrate applications and conduct business over the Internet. The BizTalk framework is based on Extensible Markup Language (XML) industry standards that enable integration across industries and between business systems, regardless of platform, operating system, or underlying technology
In addition, MP2 Professional helps track equipment and monitor maintenance costs using the secure and reliable Access database for Microsoft Windows® operating system. Access integrates data from sources such as spreadsheets and other databases to generate, analyze, and create reports quickly and easily. The Windows-based graphical interface means employee training is minimal.
"The involvement with Microsoft was a selling point for me," Aulozzi says. "I am very comfortable using their software. Coupled with the comprehensive features of MP2 Professional and iProcure, our choice for maintenance software was simple."
Both MP2 and iProcure were developed in part with Microsoft's BizTalk, an e-commerce framework that makes it easy for businesses to integrate applications and conduct business over the Internet. The BizTalk framework is based on Extensible Markup Language (XML) industry standards that enable integration across industries and between business systems, regardless of platform, operating system, or underlying technology
Laminated Products
The manufacturing industry has had to keep up with this increased market activity with quicker turnaround times while maintaining high-quality customer service. For Laminated Products, Inc., a manufacturer of European-style laminated countertops and kitchen and bathroom fixtures, keeping up with the customer demand means maximizing machine uptime in their manufacturing plant with regular maintenance and repair.
To help manage maintenance tasks and ensure that staff time is spent wisely, Laminated Products chose Datastream System's MP2 Professional for Microsoft Access, a comprehensive maintenance management software system, and iProcure, Datastream's Internet purchasing system. Together with Microsoft's BizTalk e-commerce framework, these products create a seamless, powerful maintenance management system that has paid for itself through reduced administrative overhead and purchasing errors. A Maintenance MuddleThe maintenance staff at Laminated Products is responsible for 180,000 square feet of manufacturing equipment and facilities. Their responsibilities include minor plumbing, ventilation system and electrical work, and most importantly, equipment maintenance.
To help manage maintenance tasks and ensure that staff time is spent wisely, Laminated Products chose Datastream System's MP2 Professional for Microsoft Access, a comprehensive maintenance management software system, and iProcure, Datastream's Internet purchasing system. Together with Microsoft's BizTalk e-commerce framework, these products create a seamless, powerful maintenance management system that has paid for itself through reduced administrative overhead and purchasing errors. A Maintenance MuddleThe maintenance staff at Laminated Products is responsible for 180,000 square feet of manufacturing equipment and facilities. Their responsibilities include minor plumbing, ventilation system and electrical work, and most importantly, equipment maintenance.
Benefits: Increased Efficency and Better Communication
By automating communication using the new system, H&R Johnson's suppliers can access stock information and identify requirements in advance. They can also provide assurance for H&R Johnson that stock will arrive on time and that the necessary quantities are available for dispatch. This means that suppliers can also improve their own internal efficiency by knowing stock requirements far in advance. Because all the paperwork is completed online, both companies involved in a transaction can significantly reduce the time spent completing paper-based order forms and re-keying information.
But the new system has additional benefits that go beyond replacing similar manual processes. Coxon says: "Using electronic commerce we have built an alternative line of communication to our suppliers. Now they can see our requirements and can react by providing us with the necessary materials. Because they can participate in the order and delivery cycle and we can all monitor progress online. Nothing gets overlooked."
As a result, the tile maker does not have to hold large amounts of stock and has much better management and financial control of its business. Cost is reduced because H&R Johnson can automate many of its previously manual processes and it does not have to spend time chasing deliveries and suppliers—everything can be monitored online.
"By providing our suppliers with access to stock information using the Internet, we can streamline our ordering process and make sure that we don't run out of essential materials. The Microsoft technologies that we are using provide the stability and scalability which enable us to concentrate on our business with the peace of mind to know that our backbone technologies won't let us down," Coxon explains.
Personalization of the pages and accounts has been achieved using Active Server Pages and the system is based on the Microsoft Visual Studio® development system, and Microsoft Windows NT Server Internet Information Server and Microsoft Transaction Server technologies, with plans to extend to Microsoft Site Server Commerce Edition.
But the new system has additional benefits that go beyond replacing similar manual processes. Coxon says: "Using electronic commerce we have built an alternative line of communication to our suppliers. Now they can see our requirements and can react by providing us with the necessary materials. Because they can participate in the order and delivery cycle and we can all monitor progress online. Nothing gets overlooked."
As a result, the tile maker does not have to hold large amounts of stock and has much better management and financial control of its business. Cost is reduced because H&R Johnson can automate many of its previously manual processes and it does not have to spend time chasing deliveries and suppliers—everything can be monitored online.
"By providing our suppliers with access to stock information using the Internet, we can streamline our ordering process and make sure that we don't run out of essential materials. The Microsoft technologies that we are using provide the stability and scalability which enable us to concentrate on our business with the peace of mind to know that our backbone technologies won't let us down," Coxon explains.
Personalization of the pages and accounts has been achieved using Active Server Pages and the system is based on the Microsoft Visual Studio® development system, and Microsoft Windows NT Server Internet Information Server and Microsoft Transaction Server technologies, with plans to extend to Microsoft Site Server Commerce Edition.
The Solution: A Web-Based Supply-Chain System
As a result, the company conducted a survey to identify its customers' key requirements for an EDI system. The most apparent were the need for stock information, order-progress information, and order entry. To address these needs, H&R Johnson worked with Microsoft Certified Solution Provider (MCSP) ABS to create an e-commerce solution.
Using advanced client/server environment (ACE) from ABS, the two companies developed a Web-based supply-chain system using Microsoft Windows NT® Server as a gateway to the existing AS/400 system. Because ACE is a development environment for Microsoft Windows® operating systems, it enables programmers to concentrate on the business logic and user interface by generating much of the application code automatically.
The business-to-business system, which is based on the Microsoft BackOffice® family of server applications, allows H&R Johnson's smaller distributors, which could not previously access the EDI system, to enter orders via the Internet, check stock levels, and track the progress of their orders.
Mike Coxon, IT manager for H&R Johnson, says, "An EDI system is fine for many of our larger customers but we have other, smaller distributors who do not have the technical infrastructure or know-how to work in this way. This is where our online ordering system is so useful. Any shop can check stock, place an order, and track delivery for no more than the price of a local phone call."
Because its distributors already hold an account with the company, H&R Johnson has not had to address online payment and security. Once an order is placed, the credit control department co-ordinates invoices in the same way that it would for orders made by fax, mail, or telephone.
ABS marketing manager Sue Banks says, "The project proved that business-to-business Internet commerce was being successfully implemented. Right from the start, the company achieved real value from its virtual supply chain and this value has not diminished. This is largely thanks to the reliability and quality of the Microsoft products which were used and which allowed the company to adapt and integrate its existing infrastructure with the online commerce systems."
Thanks to the online success of the Web-based stock control and ordering system between H&R Johnson and its distributors, the company more recently decided to extend the system to include its own suppliers. Once again the company enlisted ABS. A prototype has been developed which will enable H&R Johnson's established suppliers to monitor internal stock requirements. The system, which will integrate packaging and raw materials suppliers into the supply chain, will mean that the company no longer needs to devote unnecessary effort to monitoring stock levels and processing orders. While these materials are critical to its business, the company cannot hold large amounts of stock. Improving the lines of communication with its suppliers means that they can take responsibility for anticipating when the stock will need replenishing.
Using advanced client/server environment (ACE) from ABS, the two companies developed a Web-based supply-chain system using Microsoft Windows NT® Server as a gateway to the existing AS/400 system. Because ACE is a development environment for Microsoft Windows® operating systems, it enables programmers to concentrate on the business logic and user interface by generating much of the application code automatically.
The business-to-business system, which is based on the Microsoft BackOffice® family of server applications, allows H&R Johnson's smaller distributors, which could not previously access the EDI system, to enter orders via the Internet, check stock levels, and track the progress of their orders.
Mike Coxon, IT manager for H&R Johnson, says, "An EDI system is fine for many of our larger customers but we have other, smaller distributors who do not have the technical infrastructure or know-how to work in this way. This is where our online ordering system is so useful. Any shop can check stock, place an order, and track delivery for no more than the price of a local phone call."
Because its distributors already hold an account with the company, H&R Johnson has not had to address online payment and security. Once an order is placed, the credit control department co-ordinates invoices in the same way that it would for orders made by fax, mail, or telephone.
ABS marketing manager Sue Banks says, "The project proved that business-to-business Internet commerce was being successfully implemented. Right from the start, the company achieved real value from its virtual supply chain and this value has not diminished. This is largely thanks to the reliability and quality of the Microsoft products which were used and which allowed the company to adapt and integrate its existing infrastructure with the online commerce systems."
Thanks to the online success of the Web-based stock control and ordering system between H&R Johnson and its distributors, the company more recently decided to extend the system to include its own suppliers. Once again the company enlisted ABS. A prototype has been developed which will enable H&R Johnson's established suppliers to monitor internal stock requirements. The system, which will integrate packaging and raw materials suppliers into the supply chain, will mean that the company no longer needs to devote unnecessary effort to monitoring stock levels and processing orders. While these materials are critical to its business, the company cannot hold large amounts of stock. Improving the lines of communication with its suppliers means that they can take responsibility for anticipating when the stock will need replenishing.
It's a New Day
So what is it that's rattling around in the brains of today's young adults? To understand their mindset, look again at the world in which they're growing up. Gone are the days of putting in 50 years with one firm, then retiring with a smile and a gold watch. Today's entrants to the workforce follow a switch-back trail through the professions. Four or five careers are par for the course. Moreover, the Internet has launched a stay-at-home revolution. It's the age of freelancing, day-trading, and working in one's pajamas. Careers are patchworks of varied roles and responsibilities.
This environment shapes young people into integrative thinkers, people who make the most of whatever resources they can find. But it's these qualities of youth, not youth itself, that foster new-economy success, Colony argues: "I don't think it has anything to do with age. It has to do with openness. It has to do with the ability to learn."
Flexibility and speed are essentials. "What's important is being willing to change your mind," says Web pundit and venture capitalist Esther Dyson. "If you can't change," she adds, "someone else will implement your business model better and put you out of business."
Julie Wainwright, CEO of Pets.com, describes the struggles of the old-school executives she has hired: "Sometimes they get paralyzed because they are required to move very, very quickly in making a lot of decisions."
Yet Wainwright concedes that mistakes and dead ends are to be expected when navigating mysterious terrain. She counsels CEOs to create an environment where mistakes are okay, as long as the people making them learn from them, and fast.
Like young adults who assemble hodge-podge careers, CEOs seeking to establish an Internet presence, or boost revenue overall, should exploit all the resources at their disposal. The traditional three channels—person-to-person, mail, and telephone—aren't going away. The Internet simply adds a fourth to the mix. "The artistry in this," says Colony, "is to harmonize these channels. Leverage your strength in one, two, and three to dominate the fourth." Use the Internet, for example, to publicize this weekend's giveaways at your 90-year-old corner store.
"My best advice," Colony adds, "is to swim in this technology. Go online at least a half-hour a day. Place a technologist or two on your board of directors. Visit Silicon Valley once a year. Be connected to this world." And above all, field your kids' advice. Ask them for a grand tour of the information age. They hold the key.
This environment shapes young people into integrative thinkers, people who make the most of whatever resources they can find. But it's these qualities of youth, not youth itself, that foster new-economy success, Colony argues: "I don't think it has anything to do with age. It has to do with openness. It has to do with the ability to learn."
Flexibility and speed are essentials. "What's important is being willing to change your mind," says Web pundit and venture capitalist Esther Dyson. "If you can't change," she adds, "someone else will implement your business model better and put you out of business."
Julie Wainwright, CEO of Pets.com, describes the struggles of the old-school executives she has hired: "Sometimes they get paralyzed because they are required to move very, very quickly in making a lot of decisions."
Yet Wainwright concedes that mistakes and dead ends are to be expected when navigating mysterious terrain. She counsels CEOs to create an environment where mistakes are okay, as long as the people making them learn from them, and fast.
Like young adults who assemble hodge-podge careers, CEOs seeking to establish an Internet presence, or boost revenue overall, should exploit all the resources at their disposal. The traditional three channels—person-to-person, mail, and telephone—aren't going away. The Internet simply adds a fourth to the mix. "The artistry in this," says Colony, "is to harmonize these channels. Leverage your strength in one, two, and three to dominate the fourth." Use the Internet, for example, to publicize this weekend's giveaways at your 90-year-old corner store.
"My best advice," Colony adds, "is to swim in this technology. Go online at least a half-hour a day. Place a technologist or two on your board of directors. Visit Silicon Valley once a year. Be connected to this world." And above all, field your kids' advice. Ask them for a grand tour of the information age. They hold the key.
Look no further than your teenage kids.
Forrester Research recently studied the Internet use and buying patterns of 10,000 16- to 22-year-olds. Their spending power poses a force to be reckoned with. Strategic marketing calls for understanding what makes today's teens tick.
But there's a second very good reason to pick their brains. They've grown up in the frenetic, fast-paced, hyper-stimulating world that older Americans have had to adapt to. It has equipped them with the very qualities—flexibility, quick decision-making, and a willingness to gamble and learn from mistakes—that spell success in the uncharted territory of the information age. Colony isn't recommending hiring a CEO right out of high school. But from this group, today's CEOs can learn some very important lessons.
What's at stake? By the year 2003, anywhere from 500 million to one billion people will be online, and seventy-five percent of 16- to 22-year-olds who go online buy online. Forrester predicts that online sales of $170 billion in 1999 will jump to $3.2 trillion in 2003. More liberal estimates forecast $10 trillion—in a mere four years.
It's a myth, says Colony, that e-commerce is maturing. The truth: "We are sitting around campfires in loincloths chewing on bones." Today's "faint vibrations" are mere tastes of the "true tectonic movements" to come. "If you're a retailer," he advises, "you should be offering e-mail access at your point of sale. That's how you're going to pull these young consumers into your world." Viral marketing by e-mail also works wonders. "But it should be highly targeted and highly relevant," he cautions, "or you're spamming and pissing off your young consumers."
But there's a second very good reason to pick their brains. They've grown up in the frenetic, fast-paced, hyper-stimulating world that older Americans have had to adapt to. It has equipped them with the very qualities—flexibility, quick decision-making, and a willingness to gamble and learn from mistakes—that spell success in the uncharted territory of the information age. Colony isn't recommending hiring a CEO right out of high school. But from this group, today's CEOs can learn some very important lessons.
What's at stake? By the year 2003, anywhere from 500 million to one billion people will be online, and seventy-five percent of 16- to 22-year-olds who go online buy online. Forrester predicts that online sales of $170 billion in 1999 will jump to $3.2 trillion in 2003. More liberal estimates forecast $10 trillion—in a mere four years.
It's a myth, says Colony, that e-commerce is maturing. The truth: "We are sitting around campfires in loincloths chewing on bones." Today's "faint vibrations" are mere tastes of the "true tectonic movements" to come. "If you're a retailer," he advises, "you should be offering e-mail access at your point of sale. That's how you're going to pull these young consumers into your world." Viral marketing by e-mail also works wonders. "But it should be highly targeted and highly relevant," he cautions, "or you're spamming and pissing off your young consumers."
Full Circle
While surging into the virtual sphere, many businesses are paradoxically returning to their roots. In describing his company's latest strategy, Microsoft president Steve Ballmer says, "In some sense we've decided to go back to what we're good at—software. You've got to start with some fundamental proposition of what you can do, long term, better than the other guys."
Roots are also a matter of geography. True, in today's market, teenagers in Bombay can launch an Internet company with spare parts and start creating and marketing software. The Internet transcends distance. Yet location—not so much location, per se, but community—still matters. Venture capital alone doesn't account for the way that Silicon Valley, Boston's biotech corridor, and Pittsburgh's robotics hub are thriving. Clusters of companies in related fields benefit from the informal flow of information as people circulate from firm to firm, run into each other at the grocery store, and spend time interacting, face-to-face.
People, after all, bring businesses to life and sustain them. E-commerce needs to appreciate human talent and quirky human needs.
"The thing that is in short supply is minds," says EDventure Holdings Chairman Esther Dyson. "I have certainly counseled people out of doing start-ups. The big reason is the people. In the venture capital business, you have to ask yourself, 'I know these guys are going to get into trouble. Am I going to want to help? Or am I going to feel I made a mistake?' There are too many copies of the same, sometimes good ideas and there's almost no one to implement them." Any "two-bit salesperson" can pull in $25 million from venture capitalists "to duplicate the idea" of the guy who pulled the same stunt two days ago.
More and more marketers are spending hundreds of thousands of dollars to command the public's attention, she adds. But people have no more time at their disposal. Only the supply of choices, and competition between them, is rising.
The way to command attention, Dyson asserts, is to give it back. "Every once and a while consumers want to call up and ask a stupid question and still get a polite answer. They want someone to pay attention. Most online shopping is like going into a warehouse. You get ignored. You can't tell if they have the red one in your size. And no one's going to tell you."
The biggest challenge in marketing today, Dyson adds, is no different than it was before the dawn of the Internet: getting the attention of the people you want to reach.
"Like that guy," she says, pointing to the NBC techie waving his arms to tell Williams that time is up. Because of the spell cast by good conversation, by a little person-to-person contact, the polished anchor just missed his cue. Time on the network may be up, but the human give-and-take keeps on rolling.
Roots are also a matter of geography. True, in today's market, teenagers in Bombay can launch an Internet company with spare parts and start creating and marketing software. The Internet transcends distance. Yet location—not so much location, per se, but community—still matters. Venture capital alone doesn't account for the way that Silicon Valley, Boston's biotech corridor, and Pittsburgh's robotics hub are thriving. Clusters of companies in related fields benefit from the informal flow of information as people circulate from firm to firm, run into each other at the grocery store, and spend time interacting, face-to-face.
People, after all, bring businesses to life and sustain them. E-commerce needs to appreciate human talent and quirky human needs.
"The thing that is in short supply is minds," says EDventure Holdings Chairman Esther Dyson. "I have certainly counseled people out of doing start-ups. The big reason is the people. In the venture capital business, you have to ask yourself, 'I know these guys are going to get into trouble. Am I going to want to help? Or am I going to feel I made a mistake?' There are too many copies of the same, sometimes good ideas and there's almost no one to implement them." Any "two-bit salesperson" can pull in $25 million from venture capitalists "to duplicate the idea" of the guy who pulled the same stunt two days ago.
More and more marketers are spending hundreds of thousands of dollars to command the public's attention, she adds. But people have no more time at their disposal. Only the supply of choices, and competition between them, is rising.
The way to command attention, Dyson asserts, is to give it back. "Every once and a while consumers want to call up and ask a stupid question and still get a polite answer. They want someone to pay attention. Most online shopping is like going into a warehouse. You get ignored. You can't tell if they have the red one in your size. And no one's going to tell you."
The biggest challenge in marketing today, Dyson adds, is no different than it was before the dawn of the Internet: getting the attention of the people you want to reach.
"Like that guy," she says, pointing to the NBC techie waving his arms to tell Williams that time is up. Because of the spell cast by good conversation, by a little person-to-person contact, the polished anchor just missed his cue. Time on the network may be up, but the human give-and-take keeps on rolling.
Celebrity E-Commerce Observers Reminisce About the Corner Store
NBC production trucks sit on the Harvard lawn, poised to link to orbiting satellites and transmit sight and sound into the digital ether. In a nearby classroom, camera and lighting wires have taken over the floor like so many snakes. Two NBC crewmen are on all fours, crawling, ready to pounce and stick a microphone into the hand of anyone in the audience who poses a question. A TV-studio glow washes over the room. MSNBC anchor Brian Williams works the crowd, then takes his place at the podium. The six members of his "Technology and Commerce" panel are miked, powdered, and ready to talk business to the world.
Yet there's something quite classic, premodern even, about the room. Rows of seats rise from an open center, like a Mayan ballfield, or the Coliseum in Rome.
The setting is a perfect, poetic match for the conclusion that the panel will reach: Yes, the Internet has created boundless opportunities. But even today's cutting-edge start-ups stand to learn a thing or two from the gas-lit corner stores of the turn of the century. There, when the door opened, a knowledgeable, courteous counterperson snapped to attention; someone who knew the customer by name, and knew what they'd be needing.
The corner store captures what many of today's start-ups need to succeed: skilled and conscientious people to run them and provide customers with a high quality of service. Businesses that thrive—virtual and terrestrial alike—are those that best serve and appeal to enduring consumer needs.
"If you're running chain drugstores where the help doesn't understand what's in the store, and you have to wait in a 12-person line to get your prescription filled, you're probably going to be vulnerable to the Internet," warns Wall Street Journal Technology Columnist Walt Mossberg. "But if you provide much better, human-centered pharmaceutical advice than the Web, then you'll be okay." This much won't change, he says: Consumers keep going back to the people and shops they trust.
Mossberg asserts that the Web's benefits for consumers have as much to do with competence and comfort as with price. He recently ran an experiment of posing sensitive questions to Drugstore.com and PlanetRx.com. "They gave much better answers," he says, "in a much more private way, than if you are in Walgreen's with 10,000 of your neighbors and you have to ask about some rash."
The Web wields the power of information, but at a cost. On Pets.com, for example, consumers can't cuddle a pup they're thinking about taking home. But they can learn all about care and feeding, immunizations, life expectancy, and the hottest treats and toys. Staff veterinarians, says Pets.com CEO Julie Wainwright, are constantly fielding calls from people who aren't getting the help they need any place else.
Yet there's something quite classic, premodern even, about the room. Rows of seats rise from an open center, like a Mayan ballfield, or the Coliseum in Rome.
The setting is a perfect, poetic match for the conclusion that the panel will reach: Yes, the Internet has created boundless opportunities. But even today's cutting-edge start-ups stand to learn a thing or two from the gas-lit corner stores of the turn of the century. There, when the door opened, a knowledgeable, courteous counterperson snapped to attention; someone who knew the customer by name, and knew what they'd be needing.
The corner store captures what many of today's start-ups need to succeed: skilled and conscientious people to run them and provide customers with a high quality of service. Businesses that thrive—virtual and terrestrial alike—are those that best serve and appeal to enduring consumer needs.
"If you're running chain drugstores where the help doesn't understand what's in the store, and you have to wait in a 12-person line to get your prescription filled, you're probably going to be vulnerable to the Internet," warns Wall Street Journal Technology Columnist Walt Mossberg. "But if you provide much better, human-centered pharmaceutical advice than the Web, then you'll be okay." This much won't change, he says: Consumers keep going back to the people and shops they trust.
Mossberg asserts that the Web's benefits for consumers have as much to do with competence and comfort as with price. He recently ran an experiment of posing sensitive questions to Drugstore.com and PlanetRx.com. "They gave much better answers," he says, "in a much more private way, than if you are in Walgreen's with 10,000 of your neighbors and you have to ask about some rash."
The Web wields the power of information, but at a cost. On Pets.com, for example, consumers can't cuddle a pup they're thinking about taking home. But they can learn all about care and feeding, immunizations, life expectancy, and the hottest treats and toys. Staff veterinarians, says Pets.com CEO Julie Wainwright, are constantly fielding calls from people who aren't getting the help they need any place else.
Microsoft as a Service Company
This digital feedback loop is forcing Microsoft to remake itself. We have to get out of the "software business long-term" and get into the "software equals a service business long-term." The digital feedback loop transforms the way our product is delivered and that transformation will have a huge effect. Today we'll work for two years and introduce a new product. We get feedback for a year, work for another year, and then ship another product. The digital feedback loop means we literally can tune a product. We're getting continuous feedback, and we can continuously update and improve the product. The whole culture and psychology of that is quite different for us.
We need to provide our software as a service. A consumer or a small business will just register for that service. Will we have something that gives you spreadsheet capabilities, and word processing capabilities? As long as I work at Microsoft, absolutely. Will we have code that executes on your PC as long as I work at Microsoft, absolutely. But, if I could actually come to enterprise customers and say, we'll provide you the service, then they don't have to have people set it up, configure it, and worry about it.
The user can still personalize, but it's not being done in an unpredictable way, in a bunch of different IT shops. We take cost out for the IT guy. We take cost out for us, and we give a better customer experience. We don't stop being a product company. But, we have to be sure that we take on a service orientation during the next several years.
So can we deliver as much or more value with a service as we do with packaged software? We can deliver a ton more value, if we do it right. We can take care of customers and that's what our customers want from us.
We need to provide our software as a service. A consumer or a small business will just register for that service. Will we have something that gives you spreadsheet capabilities, and word processing capabilities? As long as I work at Microsoft, absolutely. Will we have code that executes on your PC as long as I work at Microsoft, absolutely. But, if I could actually come to enterprise customers and say, we'll provide you the service, then they don't have to have people set it up, configure it, and worry about it.
The user can still personalize, but it's not being done in an unpredictable way, in a bunch of different IT shops. We take cost out for the IT guy. We take cost out for us, and we give a better customer experience. We don't stop being a product company. But, we have to be sure that we take on a service orientation during the next several years.
So can we deliver as much or more value with a service as we do with packaged software? We can deliver a ton more value, if we do it right. We can take care of customers and that's what our customers want from us.
What Can You Do Better on the Internet?
My experience at Microsoft shows me that our customers want to be able to serve themselves. They want to be able to go get the information themselves. They want to answer their own questions.
Take small business today, which is not served by the PC industry and IT terribly well. For example, it's just too complicated to buy a set of computers and network them together. You pay a guy $120 an hour and he comes out and stitches them together and maybe throws on a piece of software. Small businesses will be better served when there is a service that can manage the interaction between the service and the computers, allowing you to automate things that are complicated and expensive today. So, Microsoft is trying to think through how we use the Internet to change the service process.
Improving meetings and communication is another area to consider. Can you to have a richer dialogue with customers because you are all on the Internet? There are times when you want to have some kind of real-time audio, audio/video discussion, and you want to be able to look at the same documents at the same time, and share those documents. When it comes to changing the online experience in some important way, none of these communications technologies has really been as pioneered as I think they will be.
Creating new marketplaces or new ways of interacting in the marketplace also deserves focus. It is very hard in the physical world to bring large enterprises, small businesses, and consumers together at the same time. We simulate it with dealer networks or affiliate networks. If you're in the healthcare business, there are hospitals, pharmaceutical companies, healthcare insurers, and patients trying to come together. If you're in the auto business, there are dealers and manufacturers, and consumers trying to come together. The Internet not only provides a way to knit business-to-business buying, but will also enable dealers, consumers, and businesses to come together in different ways. This will wind up benefiting the people who set up these relationships and are able to figure out a way to profit by them.
Another area that doesn't currently receive enough attention is what we call "the digital feedback loop." The Internet gives you real-time learning, and yet most companies aren't understanding and improving their products or services as fast as they could given the potential feedback loop from the Internet. Most companies are still very casual today when it comes to their Internet interactions with customers.
Take small business today, which is not served by the PC industry and IT terribly well. For example, it's just too complicated to buy a set of computers and network them together. You pay a guy $120 an hour and he comes out and stitches them together and maybe throws on a piece of software. Small businesses will be better served when there is a service that can manage the interaction between the service and the computers, allowing you to automate things that are complicated and expensive today. So, Microsoft is trying to think through how we use the Internet to change the service process.
Improving meetings and communication is another area to consider. Can you to have a richer dialogue with customers because you are all on the Internet? There are times when you want to have some kind of real-time audio, audio/video discussion, and you want to be able to look at the same documents at the same time, and share those documents. When it comes to changing the online experience in some important way, none of these communications technologies has really been as pioneered as I think they will be.
Creating new marketplaces or new ways of interacting in the marketplace also deserves focus. It is very hard in the physical world to bring large enterprises, small businesses, and consumers together at the same time. We simulate it with dealer networks or affiliate networks. If you're in the healthcare business, there are hospitals, pharmaceutical companies, healthcare insurers, and patients trying to come together. If you're in the auto business, there are dealers and manufacturers, and consumers trying to come together. The Internet not only provides a way to knit business-to-business buying, but will also enable dealers, consumers, and businesses to come together in different ways. This will wind up benefiting the people who set up these relationships and are able to figure out a way to profit by them.
Another area that doesn't currently receive enough attention is what we call "the digital feedback loop." The Internet gives you real-time learning, and yet most companies aren't understanding and improving their products or services as fast as they could given the potential feedback loop from the Internet. Most companies are still very casual today when it comes to their Internet interactions with customers.
Lower Costs and Greater Delivery Options
Technology will change in the way Web sites are built. Today when you build a site, you guess how many customers you're going to have and how much capacity you'll need to protect against the site going down. Then you spend a whole bunch of money. You may end up spending $1.5 million on a computer without knowing whether it will stay up 24 x 7—and that doesn't include the cost of programming, software, or people. Within the next two or three years, this process will be far more linear. You'll start out with one machine or two machines, and you'll add a bunch of little cheap machines as demand grows. This will give you greater protection and lower cost going in.
Technology will also have an impact in the home. In a few years, homes will be nothing like they are today. In the U.S., people of middle incomes on up will have at least seven places in their home where they can access the Internet: televisions, PCs, cellular phones, and viewing devices we call screen pads. This will change the way we think about advertising. In five or 10 years, all advertising, not just Internet advertising, will be direct-response advertising. You'll have click-through abilities on your television screen, for example. This transformation also will change the way we think about reaching people with the Internet. As the Internet and television merge, it will change the brand-building experience even more.
What About Now?So what to do about e-commerce today?
Customer acquisition on the Internet is a tough challenge for most businesses today. They are spending a lot of money to acquire customers through portal distribution deals, as well as on Internet advertising and on traditional print and television advertising. And people are trying to decide which methods of advertising are the most efficient. At this stage in the game, you either have to be willing to spend a lot of money to establish a brand presence or you've got to have a brand that you are clever about associating with the Internet, which is hard to do.
Right now, most companies are so focused on bringing people to the Internet that they are not considering whether that is really changing some aspect of the buying experience for their customers. And it's not the core question asked by most of the people I talk to, whether they're CEOs, IT people, or marketing people. The core question is not "How do I have a very different experience from everybody else on the Internet or what goods or services do I provide." The core question is really "What is different about that experience other than it is on the Internet?" Are you really going to provide better personalization? Are you going to make it easier to pay or cheaper to pay? Will you provide better customer service on the Internet? Hardly anybody thinks about that.
Technology will also have an impact in the home. In a few years, homes will be nothing like they are today. In the U.S., people of middle incomes on up will have at least seven places in their home where they can access the Internet: televisions, PCs, cellular phones, and viewing devices we call screen pads. This will change the way we think about advertising. In five or 10 years, all advertising, not just Internet advertising, will be direct-response advertising. You'll have click-through abilities on your television screen, for example. This transformation also will change the way we think about reaching people with the Internet. As the Internet and television merge, it will change the brand-building experience even more.
What About Now?So what to do about e-commerce today?
Customer acquisition on the Internet is a tough challenge for most businesses today. They are spending a lot of money to acquire customers through portal distribution deals, as well as on Internet advertising and on traditional print and television advertising. And people are trying to decide which methods of advertising are the most efficient. At this stage in the game, you either have to be willing to spend a lot of money to establish a brand presence or you've got to have a brand that you are clever about associating with the Internet, which is hard to do.
Right now, most companies are so focused on bringing people to the Internet that they are not considering whether that is really changing some aspect of the buying experience for their customers. And it's not the core question asked by most of the people I talk to, whether they're CEOs, IT people, or marketing people. The core question is not "How do I have a very different experience from everybody else on the Internet or what goods or services do I provide." The core question is really "What is different about that experience other than it is on the Internet?" Are you really going to provide better personalization? Are you going to make it easier to pay or cheaper to pay? Will you provide better customer service on the Internet? Hardly anybody thinks about that.
The Role of Technology in Shifting Power to Consumers
The XML RevolutionThis XML revolution will happen over a two-, three-, or four-year period. In our industry, it will completely revolutionize who makes the software that's important to people in the future and it will revolutionize the way people think about the Internet.
Let me give you some examples. Today, most financial services firms I talk to want to be the one-stop shop for financial services. But in the future, your broker, your bank, and your insurance company will all have Web sites that describe themselves, and somebody will probably have a piece of software that produces your personal page, which provides you with your personal financial situation even if you have accounts in 20 brokerage firms, 10 banks, and six insurance companies. The Web sites that don't do this will find themselves at an increasing competitive disadvantage because there will be a pressure to return power to consumers. The companies that do so will be the ones that thrive.
Manufacturers will also see changes in the amount of data available to them. If you have a very complicated manufacturing supply chain, the key is the ability to see not only your suppliers, but also your suppliers' suppliers, and your suppliers' suppliers' suppliers, as well as your dealers and your customers. You want a very linked view of that. Today, creating any kind of a linked view is very hard because it's unlikely that your suppliers' Web sites will work with your Web site, or your dealers' Web sites, or your retailers' Web sites.
XML technology makes it possible to have data flow easily and seamlessly across these sites. The Internet will be something that gets programmed or customized by businesses, by end users, and by software companies on behalf of end users. It's a fundamental change whether we're taking about business-to-business or business-to-consumer.
Another example is in the mobile area. Today, there's a sort of captivity between what happens on the Internet and these new mobile devices. If you want to bring out a new cell phone, you literally have to go work with a couple of guys and get them to render their data so it can be displayed on your mobile devices. XML will lead to a separation between those two things, so that any Web site can be accessed on any device.
Let me give you some examples. Today, most financial services firms I talk to want to be the one-stop shop for financial services. But in the future, your broker, your bank, and your insurance company will all have Web sites that describe themselves, and somebody will probably have a piece of software that produces your personal page, which provides you with your personal financial situation even if you have accounts in 20 brokerage firms, 10 banks, and six insurance companies. The Web sites that don't do this will find themselves at an increasing competitive disadvantage because there will be a pressure to return power to consumers. The companies that do so will be the ones that thrive.
Manufacturers will also see changes in the amount of data available to them. If you have a very complicated manufacturing supply chain, the key is the ability to see not only your suppliers, but also your suppliers' suppliers, and your suppliers' suppliers' suppliers, as well as your dealers and your customers. You want a very linked view of that. Today, creating any kind of a linked view is very hard because it's unlikely that your suppliers' Web sites will work with your Web site, or your dealers' Web sites, or your retailers' Web sites.
XML technology makes it possible to have data flow easily and seamlessly across these sites. The Internet will be something that gets programmed or customized by businesses, by end users, and by software companies on behalf of end users. It's a fundamental change whether we're taking about business-to-business or business-to-consumer.
Another example is in the mobile area. Today, there's a sort of captivity between what happens on the Internet and these new mobile devices. If you want to bring out a new cell phone, you literally have to go work with a couple of guys and get them to render their data so it can be displayed on your mobile devices. XML will lead to a separation between those two things, so that any Web site can be accessed on any device.
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