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September 27, 1999

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From training on demand to full-service customer care, it's all online

By Caryn Gillooly

uch of the innovation in the IT industry can be summed up in one word: online. It's not, however, simple E-commerce. IBM is bringing in more than $1 billion a month over the Web; Cisco Systems is using just-in-time learning to help reduce travel and retain valuable employees; and Computer Associates says if you can't do business online, it doesn't want to do business with you at all.

"I don't want to fax you anymore, and I don't want to call you anymore," says Gary Quinn, executive VP of global information and administration services at Computer Associates. "One of our goals for CA internally is that we only want to do business with someone we can deal with electronically."

At IBM, E-business is already having a major impact on business overall. The company's first-quarter 1999 E-commerce revenue totaled $2.5 billion. That figure represents an increase of about 1,300% over the same quarter of the previous year, according to the company. The $2.5 billion also equates to about $28 million a day in E-commerce revenue-among the highest take of any company, says Stephen Ward, CIO and manager of business transformation at IBM. "That's five to six times bigger than Amazon.com," he notes.

But for IBM and other computer-industry companies that are taking advantage of the growth of the Internet and E-business in general, the bigger story is that while they are making so much money on the Web, they're also spending a significant amount of money there as well. Ward says IBM spends about $800 million each month over the Web on everything from office supplies to computer production parts, and the company expects to reach $12 billion in the purchase of goods and services over the Web in 1999.

One method of electronic procurement IBM is testing is to give its suppliers direct access to IBM employees. If, for example, an employee needs more fax paper, more toner for the printer, or even a new chair, that person can go directly to the supplier and place an order immediately. With that direct link, the supplier gets the order and, in turn, the revenue faster than if the employee had to have management approval. Since the supplier is getting revenue more quickly, IBM asks that supplier for the lowest possible price and next-day delivery.

The system is set up as a Notes- and Domino Net.Commerce server engine sitting on a high-end IBM server that runs through a DB2 database. Though the system is working fine, IBM is still working out some of the finer details, such as which employees should get this type of access and how best to keep track of costs and inventory.

Despite the kinks, "In this scenario, everybody is happy," says Ward, explaining that employees are getting the supplies they need within a day, and the supplier is getting nearly guaranteed business and accelerated revenue returns. "This is part of a simpler lifestyle."

This direct-access approach has been so successful that some of IBM's customers with similar needs have expressed interest in buying IBM's E-procurement setup-hardware and software. Some have even shown interest in changing over to IBM's suppliers to keep each piece of the system the same as IBM's.

In response, IBM is turning its own E-procurement applications and systems into a service for itscustomers. "Some have even said, 'Give us access to your suppliers directly and you, IBM, run the systems,'" Ward says. "So this is now a new kind of service we can offer customers."

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