InformationWeek
Defining The Business Value Of Technology
January 31, 2000
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Whirlpool: The Evolution Of An E-Business Unit"). "Our vision is that the portal becomes the desktop for every employee, trading partner, and supplier to conduct business, globally," says Greg Rodgers, national director of the company's E-Whirlpool group. "It will be the desktop that we all use to conduct business at Whirlpool."
There also are areas that provide the greatest return on investment from moving online. Lisa Williams, a senior analyst with the Yankee Group, says among the first business processes that companies put on the Web are those related to money: buying and selling. "The ones with the loudest 'ka-ching' are obvious firsts," says Williams, explaining that companies will initially look for ways to sell to customers or buy from partners or suppliers online before doing other business processes over the Internet.
Procurement is a prime example. At Chase Manhattan Corp., online purchasing through software from Intelisys Electronic Commerce LLC is one of the many self-service applications available to employees on the ChaseWeb intranet. "Making employees responsible for their purchases is a real fundamental change in our business," says Allen Stillman, the New York bank's senior VP of corporate staff systems.
Texas Instruments Inc.'s online procurement project is changing the company's entire approach to purchase approvals. Instead of routing every employee requisition to managers for approval beforehand, the application automatically approves all purchases below a specified limit, and notifies management of the transaction when it sends it to the vendor via the Web. Managers can still spot "rogue" purchases and take action later, but legitimate purchases--the vast majority of transactions--sail through much faster.
Stonebridge Companies, an Aurora, Colo., hotel-management company with 29 properties and another 300 under construction, recently signed a deal to purchase its guest supplies, including room amenities (such as shampoos and soaps), coffee, etc., from hsupply.com, an online commerce portal for the hospitality industry. "Procurement is our huge process," says Scott Gericke, regional director of operations. Allowing the properties to order their guest supplies through hsupply.com cuts paperwork, simplifying the procurement process, including invoicing and accounting time, by about half--from 20 days to 10 days, Gericke says.
Online procurement will help eliminate the mistakes that can happen when Stonebridge employees key in accounting information, and it will standardize the supplies available to Stonebridge-managed hotels, rather than making each property manager responsible for finding and buying his or her own supplies. "This process will be faster and will improve accuracy and consistency," Gericke says.
Web-enabling Stonebridge's procurement process is only the first step, Gericke says. By the third quarter, most of the company's major business processes, including policy and procedure information and employee training, will be moved online. "The Web can improve just about all business processes," Gericke says. Even though the hospitality industry is a service business, "you can still keep a personal, open line of communication with customers while improving your business processes online," he says.
But even some of E-business' most ardent practitioners say it's not for everything. "With anything that's very relationship-oriented, you want to stay away," says Toshiba's Richard. For example, Toshiba isn't keen on the idea of putting its training efforts on the Web. "Web video is not yet ready to support a one-hour training video, and that's also a case where there's no replacement for having a live person in front of you," Richard says. "The same is true for sales calls and customer visits--you never want to replace those."
That's especially true for high-end sales. Complex, expensive products will always require in-person contact, says James Spitze, a former CIO of several companies who now heads IT management consulting firm Systems Consulting Consortium Inc. in Orinda, Calif. "When you're talking about a highly technical $2 million product, you need an educated buyer and an educated seller sitting down and talking their way through the exact details," Spitze says. "You can use the Web to determine the basic components; the rest, you need to talk about in person."
Still, what makes E-business an order of magnitude more powerful than any IT trend in the past is ubiquity. Industrial gas manufacturer and distributor BOC Gases in Murray Hill, N.J., part of the $5.5 billion BOC Group in the United Kingdom, is making online processes its standard by bringing them to bear in many aspects of its business.
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