The e-Commerce Revolution:
Where is it Headed?
Pacific Coast Association of Port Authorities
2001 Mid-Year Meeting
Long Beach, California
February 8, 2001
Agenda
What is e-Business vs. e-Commerce
The e-Commerce solution approach
What is happening today
Takeaways
The e-Commerce Landscape
Mass
Customization
Virtual
Enterprise
Focus on
Core
Competency
Asset
Utilization
Global
Playing Field
Time
Compression
IT
Integration
Challenges
Back to
Basics: Value
Two Different Approaches to e-Commerce
Tinkering with your business
Focus on simple processes
Simple buying and simple selling
Focus on automating transactions
Web enabling the enterprise (e-Business)
Transforming your business
Focus on dramatically increasing revenue growth and EPS
Improving all of your value-creation processes
Focus on building a high velocity processes or enterprises
Transforming and Accelerating
Your Company
“Big companies like ours are the biggest beneficiaries of e-business. But you can’t think incrementally —you have to think transformationally.”
Jack Welch, Chairman, GE
January 2001
Transforming and Accelerating
Your Company
“Our e-Commerce transformation will deliver 10 billion dollars in benefits. It’s my personal, number one priority.”
Dr. Von Pierer, CEO, Siemens
October, 2000
“Supply chain management between the factory floor in Bangladesh and the store door or DC door, as the case may be, has not been done very well and I am bound and determined to own this space.”
- Dick Metzler, CEO APL Logistics, January 2001
Transforming and Accelerating Your Company
e-Commerce: It’s About Doubling Revenue
and EPS Growth Rates
Increasing Asset Utilization
Reducing inventory across the entire supply chain by 30%
Decreasing COGS & Operating Costs
Reducing Supply Chain costs by 30-60% and procurement spend by as much as 30%
Increasing Revenue and Market Share
Shortening order-to-delivery cycles by 90%, and time to market by 50%
Time to first benefits should be 4 – 6 months
It’s About Synchronizing Processes and Accelerating Your Business
It’s about what to buy, from whom, at what price
Not ordering the wrong things faster
It’s about capacity demand and fulfillment
Not building bigger facilities but moving the cargo faster
It’s about showing a single face to your customers
Not automating individual transactions
Not simple on-line buying—but leveraging your global spend
It’s about proactive scheduling
Knowing what you have to do before you have to do it
Design
Buy/Source
Plan
Fulfill
Sell
Service
Customer
Who is i2?
i2: The Global Leader in e-Commerce Technology
Global leadership
$ revenue in 2000
Profitable since inception since 1988
28 consecutive quarters since IPO
90% annual growth rate
1,000 customers, all verticals
9,000 installations
Powering 150+ marketplaces
5,500 employees
Global presence
130 offices worldwide
Most advanced B2B technology
$1B+ planned R&D investment over 3 years
$0
$200
$400
$600
$800
$1,000
$1,200
96
97
98
99
00
Revenue ($000,000)
$1,500
01
The e-Commerce Solution Approach
e-Commerce Addresses the Complete
e-Business Process Flow
CRM
SCM
SRM
Suppliers
Customers
The heart of any business is its supply chain
Supplier Relationship Management
Collaborating with suppliers in design, sourcing, and buying
Supply Chain Management
The supply and demand planning bridge between SRM and CRM
Customer Relationship Management
Satisfying customers by fulfilling and managing orders better, faster
e-Commerce: What key components provides mastery of the supply chain
Integrating disparate business processes providing visibility across extended supply chain
Accelerating business velocity by speeding time-to-market, order to delivery and customer service.
Delivering more measurable, hard dollar value than any other e-business investment. Period.
Great.
But what does this mean to Port Authorities?
Jim Brennan: Key Port Developments
Time to market
Velocity (no longer Just In Time)
Fundamental changes in markets
Diversification and segmentation
Information is immediate and accurate
Scheduled logistics
Port metrics
ROI vs. market share
Asset utilization
Who are your customers?
Are they…
Carriers (steamship companies, bulk carriers, RR’s)
Terminal Operators
Tenants
Service providers (trucking companies, stevedores, etc)
Or are they…
Shippers (retail, manufacturers, assemblers)
Logistics firms (3PL’s, 4PL’s)
If that be the case…
Who should control the e-Commerce direction of the Port?
What should be the Hot Buttons for Ports’
e-Commerce Initiatives
e-Sourcing and e-Procurement
Demand forecasting and fulfillment
Asset utilization
“One face” to both customers and suppliers
Spare parts inventory and control
Capital projects and expansion programs
Logistics visibility
Integration of disparate IT systems
Customer Relationship Management:
Building a Customer-Centric Enterprise
Customer Relationship Management
Maximizes profitable revenue across the value chain by planning and executing all customer life cycle process
Marketing
Sales
Fulfillment
Service and Asset Management
Providing “One Face” to customers
Supply Chain Management:
Reducing Inventory, Speeding Delivery
Supply Chain Management
Maximizes supply chain velocity by optimizing
demand
supply
fulfillment
Reducing inventory across the entire supply chain
Creating visibility across the entire supply chain
Increasing asset utilization
Supplier Relationship Management:
Reducing Costs and Time to Market
Supplier Relationship Management
Integrated suite of B2B tools for:
Design
Sourcing
Procurement
Collaboration
Empowering Ports and companies to leverage their global spend, reducing costs by 10 – 30%
Faster delivery of capital projects
Providing “One Face” to suppliers
Content:
The Fuel of B2B
Intelligent Content
Provides a common language between buyers and sellers
Empowering buyers to search, find and compare products and services
Empowering sellers to present products and services in a structured easily accessible online format
The Platform:
Unified and Open Technology Infrastructure
Enables seamless integration between business partners, marketplaces and disparate systems
Framework for common functions, GUIs & workflows
Decision support
Transaction Management
Collaboration
Security
The Network of Services
Network-based common services for private and public marketplaces
Content services
Connectivity services
Collaboration services
Commerce services
What should be the Hot Buttons for Ports’
e-Commerce Initiatives
e-Sourcing and e-Procurement (SRM)
Demand forecasting and fulfillment (SCM)
Asset utilization (SCM, CRM)
“One face” to both customers and suppliers (CRM, SRM)
Spare parts inventory and control (CRM, Content)
Capital projects and expansion programs (SRM, SCM, CRM)
Logistics visibility (SCM)
Integration of disparate IT systems (Platform)
What is happening today
and how to prevent it
Look at the total solution and not just today’s quick fix
The “Web Site”
Solving one problem
$1 million plus study to “reduce congestion”
Reinvention of the wheel
Use reputable, experienced and strong e-Commerce consultants
Focus on solutions outside of value chain
Build it from within
Don’t focus on point (ERP) solutions
Don’t share (collaborate) with anyone
The marketplace- Run everything through me
PCAPA Takeaways on e-Commerce
e-Commerce is not cheap, however,
Your e-Commerce initiative should pay for itself by a factor of 7 to 10 times in value and
You should receive immediate (4-6 months) value
No Port is too small for an e-Commerce program
e-Commerce is transformational but only to your core business
Is it time for Happy Hour?
Welcoming remarks
Objective for meeting
Talk a bit about the e-business revolution
Help make sense of it all in context of your business
i2’s role
How can an e-Business strategy create that kind of revolutionary value?
By doing the business basics: reducing costs and increasing revenue
By putting systems in place that reduce Cost of Goods Sold--pay less for what goes into your products
Systems that reduce what you spend on mission critical plant equipment and spares
Systems that reduce the amount of inventory in your supply chain
Increase revenue by allowing you to reach markets more efficiently than ever before
Increase customer satisfaction by improving delivery on after market service
It’s about making better decisions faster.
[read from slide]
These are the areas that have bottom line effect to your company
This is the span of processes that an e-Business strategy must optimize--or why bother?
Implemented or in process of implementing 150 marketplaces
