InformationWeek

June 21, 1999

Part 1 of a 3-part E-Business discussion
Altered Relationships

continued...page 2 of 3

Walter Curd,
IT director, Fujitsu Microelectrics

Glover Ferguson,
co-director, E-commerce program, Andersen Consulting

Chris Hanan,
VP of business development, E-Steel

Gene Moses, director of technology operations/strategic services, E-Steel

Gary King,
CIO, Barnesandnoble,com

Lisa Richard,
VP of strategic business planning, Toshiba America

Chris Sorensen,
director of business development, Art.com

InformationWeek: How can e-Steel improve the relationship between an existing buyer and seller?

Hanan: The Internet dramatically democratizes technology. Much like books, knowledge was once only available to a select few. Libraries developed to spread the cost over a broader base of the population and make the knowledge accessible to a broader population. Similarly, the Internet makes highly advanced technology available to large and small corporations alike. New intermediaries such as e-Steel [the forthcoming Internet marketplace for steel] centralize the development and maintenance of high-end E-commerce environments and are able to spread the cost over thousands of users. This means that suddenly the small 25-person job shop has access to the same powers of electronic communications and commerce as a mighty corporation with a 85-person IT staff. All for the investment of a PC.

The effect of this democratization is the ability to conduct business electronically not only with a select few trading partners but to drive the efficiencies throughout the entire universe of trading partners. Likewise, small companies are no longer excluded from participating in certain aspects of business simply because they don't possess the means to communicate electronically. Thus, where companies once were limited by paper and fax, they now have the ability to conduct business electronically, and reap the concurrent efficiencies with all their counterparts, both large and small.

Lisa Richard

Closer To Customers
Richard: At Toshiba's Electronic Imaging Division, we've had an extranet with our 325 dealers for almost two years. They place 80% of their orders over the extranet, check order status, see accounts receivable balances, sales history, and many other things.

While you think of the Internet as "less personal" than other forms of communication, it is amazing how much closer it has brought us to our customers. Since they can "see" all their activity with us at any given moment, they feel more connected to us as their supplier. It has improved the communication and the relationships.

InformationWeek: Please provide a few specific examples.

Richard: Customers have available on the extranet their sales activity with Toshiba, both a two-year history and current-month activity. For the sales force and the customers, they now have immediate access to up-to-the-minute sales data, so conversations avoid any discussion of what orders are in-house, how many units are pending, etc. The sales force is more able to address issues with the customer, and the customer has a complete picture of their business with us for any discussions. Everyone is automatically "on the same page." This is a huge benefit for Toshiba and our customers.

Keeping The Personal Element
Richard: One of the risks of moving to E-commerce from personal contact is the feeling a customer may have of losing the human touch ... of true customer service. This can be minimized by developing E-commerce solutions that have an edge of personalization to them.

When the user enters the site via their user name and password, the system recognizes the user and greets them by name. As simple as this is, it is a reassurance to the customer that can make a big difference. We have also built in the ability for each user to customize some of their home page via personal "hot buttons." This can help the site be more effective on a single-user basis.

While these examples are simplistic, they are worthwhile for our business. In analyzing your end users' needs, you can integrate into the site any feature or function which achieves this same end for you. It's worth the extra effort.

InformationWeek: Does personalization help drive sales higher?

Richard: Yes. We have found that the addition of the personal element improves traffic on the site by as much as 25%. However, I can't give you a measurement of the effect on revenue, since the introduction of E-commerce was to increase productivity rather than drive a new sales number. From a productivity and usage standpoint, it has been great for us.

Hanan: Apart from making the customer feel like he/she gets individualized attention, personalization features are a clear business-to-business, E-commerce imperative. In business-to-business relationships, there exist few "one price fits all" models. While in the business-to-consumer space, everyone will pay an identical price for the latest "Bug's Life" video from Amazon.com or any number of similar sites, this is not the case in the world of business-to-business relationships.