There is a vast gulf between the futurists? view of online commerce and where we are today. In the future is a seamless system which presents views of indexed products and services to whatever desktop you happen to be sitting at. They can be ordered with a few clicks of the mouse, paid for by direct transfer from your bank account and delivered to your door the next day.
On this side, there is a bewildering number of company Web sites offering out-of-date information and some unsuccessful attempts at online shopping malls which nobody visits, not even out of curiosity, let alone to buy anything.
The gulf is widened by the lack of standard secure online transactions, lack of a fulfilment system (a Web-enabled matter transporter would be handy but in reality it looks like being a fleet of Astramax vans for every vendor), lack of integration between customer, supplier and bank and, most importantly, lack of customers.
Hewlett Packard is the latest company to volunteer for bridge building, aiming to span the gulf between where we are now and where the futurists say we are going. HP?s view is that if you build the bridge, the customers will come to you.
HP?s view extends beyond online shopping for consumers, the Argos-meets-Gratton-on-the-Web approach which was hyped a few years ago. ?There is more to internet commerce than publishing pretty Web pages,? says Ilana Ron, HP internet marketing manager for Europe. ?What?s missing is the ability to communicate business processes across the Net.
Ron believes the rich seam of electronic commerce is in the business-to-business arena. He thinks this will take off as a profitable application before business-to-consumer although the two are developing in parallel.
The business-to-business goal is an extended enterprise where customers?, vendors? and suppliers? systems are linked and share the same data; where the physical movement of goods is synchronised with the informational processes or, to use Nicholas Negreponte?s more succinct language, ?the movement of atoms matches the movement of bits?.
Resellers should sit up and take note ? twice: HP is as keen to use this technology in its own business dealings as it is to sell it to others to use.
The first step is to create an intranet in each company, which means using Web protocols, technology and methodology to organise information and processes on the company?s Lan or Wan. This isn?t done just for the hell of it ? there are real efficiencies to be gained, says Ron. She cites HP?s system for reimbursing expenses. Whereas it used to take her two weeks to get her expenses and it cost the company $9.6 per claim, it now takes two days and 63 cents per claim.
The next step is from intranet to extranet ? to open up some of that information to ?business partners?. Using HP as an example again, Ron describes how the company publishes on the Web all the information its resellers need.
Finally, extranets can be linked to provide a true electronic commercial system where customers, vendors and suppliers conduct ?business processes that cross enterprise boundaries?.
HP is one of a number of companies which has recently announced the ?Web-enabling? of its products. Thus, any simple concept of the extended or borderless enterprise is quickly cluttered with security systems, desktop interfaces, disk arrays, firewalls, business process middleware and servers of varying size and function.
?When you connect your systems to other companies, such as suppliers, their desktops become users on your network,? says Ron. ?You have to manage that. You need control, security and authorisation.?
And you need a whole bunch of HP kit in order to do it. Which is good news for those resellers that make a living by integrating HP products.
As an example of how an extended enterprise system would work, Ron cites a retailer which sells, among other things, power tools. In a conventional relationship, the retailer buys tools from a supplier and puts them on the shelf, tying up capital in inventory which may or may not sell. Then a new version of the tool is produced and the retailer is either stuck trying to shift the old tools at a loss, or avails itself of the supplier?s returns policy, both of which are expensive for retailer and supplier.
What the retailer needs to do, according to Ron, is hand over control of the business process (inventory control) to the supplier. But this requires closely co-operative systems capable of sharing each others? data and working across conventional company boundaries.
?If I buy a tin of beans from Sainsbury?s, there is a business process in the supply chain,? says Ron. ?There?s the store, a supplier of beans to Sainsbury?s and a bank. These processes cross company boundaries.?
Perhaps retail isn?t the best example to use. Sainsbury?s is one of HP?s partners in this concept but the suggestion that it handed over inventory control to its suppliers drew an immediate ?no comment? from Sainsbury?s followed by a week-long silence while it thought about it. Anyone who is in retail or deals with retailers knows that inventory control is critical. Retailers and suppliers tend to come from opposite directions when this comes under discussion.
Not that anyone at HP expects business-to-business electronic commerce to happen overnight. But the approach is to provide as many building blocks as possible (using as much HP equipment as possible) to lay the foundations. For example, Ron expects companies to build data Wows (warehouses on the Web) to provide timely and accurate inventory information for their customers and suppliers. This would be a step-two building block.
The security of internet-borne financial transactions is not just a building block but a fundamental prerequisite if electronic commerce is to become widely accepted. Not that it is difficult for computer companies to come up with a technically viable system, despite the fact that would-be data criminals have increasingly sophisticated computers at their disposal. But national governments aren?t too keen on encrypted traffic on the Net which they can?t monitor. HP?s solution is a combination of Praesidium user authentication, which does not require the remote user to transmit his or her password to the application server, and the Imagine Card smart card.
HP sees Imagine Cards as containing not just access rights to extranets (for example, your company?s network and the shared portion of its business partners? networks) but access and warranties for your PC and domestic set-top box. It also envisages them acting as electronic cash cards, managing debits, credits and e-cash.
Another building block is Pixflash, a technology which HP has developed with Microsoft and Kodak to make electronic catalogues more appealing to users. The low bandwidth of the Web means fast low-res product images or slow high-res ones. Pixflash depicts resolution in layers, so users can zoom into a product (to see, for example, the texture of some cloth) without having to send the whole of the high-res image.
Companies which HP has already helped some way down the road to full e-commerce are US powerstation builder GE Power Systems, aerospace manufacturer McDonnell-Douglas and German financial house Gries & Heissel. The extended enterprise concept is derived from a vision of information as a utility with the Web as the national grid. ?People will use information in the near future in the same way as they use electricity now,? explains Ron. ?There will be Web devices for using this utility in the same way as there are electrical devices now.?
And HP is building those devices, from handheld Web access devices to the back-office paraphernalia which enables the extended enterprise to function. The only part it isn?t getting involved in is product delivery. The adopters of electronic commerce will have to talk to Vauxhall Motors about the fleet of Astramax vans.
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