ELECTRONIC COMMERCE UPDATE

September/October€1996

Shifting Paradigms Herald Age of EC

If you blinked, you missed it -- the Age of the Internet, that is. Despite the fact that most of the world still hasn't figured out how to hook up a modem yet, technology's inexorable march into the 21st Century has already moved on to yet another "age" -- the Age of Electronic Commerce. And one of the surest signs that another era has dawned is the emergence of conferences and trade shows devoted to helping you sort it all out, such as Electronic Commerce World '96, held in September in Columbus, Ohio.

According to Norman Barber, managing director, professional services, with The APL Group (Wilton, Conn.), electronic commerce is part of a strategy that allows companies and its vendors and distributors to work together through integrated business operations. This integration enables companies to increase productivity, enhance performance and reduce costs, in the process adding value to their products and services.

"With electronic commerce, the real opportunity is to begin to redefine your company in terms of what your customers want you to do and be," Barber explained. To be successful, though, requires a point-of-view that allows a company's movers and shakers to step outside the four walls of their enterprise. "Your success with electronic commerce is a function of your least effective trading partner," he cautioned.

Barber listed a number of principles a company should definitely consider while undertaking an electronic commerce strategy:

Focus first on business process redesign, and second on the computerization of the improved process.
Provide improved value to the end customer.
Effective production, sales and logistics decision-making requires abundant, accurate and timely information.
Electronic commerce is performance-driven with measures further driving accountability across business functions.
Use a new paradigm in systems thinking to drive business integration with trading partners.

Speaking of paradigms, another speaker who has gotten a lot of mileage out of milking the "paradigm shift" philosophy -- author Don Tapscott -- delivered a frequently witty luncheon presentation on themes of the "new digital economy."

One of the themes that should give anybody more than a moment's pause is that of disintermediation, or more simply, the loss of entire industries as they become irrelevant. Travel agencies, for instance, are in danger of vanishing completely thanks to the impact of such electronic services as American Airlines' SABRE reservation system. American Airlines, Tapscott pointed out, now earns more from its reservation services -- which it provides to the other airlines -- than it does from passenger flights.

Another theme Tapscott described is that of innovation. "You need to obsolete your own products," he stressed. A new slogan for companies that want to stay in business into the next century should be, "If it ain't broke, break it... before your competition does."

Paradigm shifts, by their very definition, require a different point of view. "Established leaders are often the very last to be won over, if they ever are," Tapscott noted. After all, those with vested interests will fight any changes that threaten their status quo. Ultimately, though, it will not be the producers but rather the consumers that will determine the direction of the new digital economy.

Some of the major announcements at ECWorld '96 include:

MasterCard (Purchase, N.Y.) and GTE (Needham, Mass.) will jointly develop a "digital certificate" to increase protection for the consumer and vendor against unauthorized usage of a credit card number, conforming to the new Secure Electronic Transaction (SET) standard.

The EC Company (Palo Alto, Calif.) has formed a consortium with Arthur Andersen, Dun & Bradstreet Information Services, Huntington National Bank, Thomson Financial Publishing and UUNET Technologies to develop a secure and easy-to-use solution for electronically moving money and data between businesses.

Templar 2.0 from Premenos (Concord, Calif.) is an authentication agent that provides solutions for business-to-business EDI over open networks.

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