E-enabled and Performing

The Rs 501-crore Samsung Electronics India (SEIP)–a leader

in the color monitor segment with a total shipment of 451,000 pieces during

1999-2000–maintains an average inventory level of three days. And its shipment

has rarely got delayed.

The Rs 236-crore auto component manufacturer Sona Koyo

Steering has decided to go online with its suppliers in the development and

manufacturing process through an extranet accessible through a browser. The

company expects that with the system in place, the product cycle time will come

down by at least 40%.

Another

auto component manufacturer, the Rs 80-crore Hi-Tech Gears has decided to adopt

Windchill, a collaborative commerce (C-commerce) tool that shall help its

different departments work more closely and reduce the time-to-bid for global

OEM orders from eight days to two days.

These are just a few examples of what happens when businesses

incorporate Internet technology into their core business processes.

Today, companies, large and small, are using the Web to

communicate with their partners, to connect to their back-end data-systems, and

to transact commerce. This is e-business–where the strength and reliability of

traditional information technology meets the Internet. This new Web+IT paradigm

merges the standards, simplicity and connectivity of the Internet with the core

processes that are the foundation of a business. The new killer applications are

interactive and transaction-intensive, and let people do business in more

meaningful ways. The demand for such applications is rising in the country and

enterprises are eager to adopt this new business paradigm. The greatest

deterrent in India–a severely limited bandwidth.

In countries that do not suffer from a bandwidth crunch,

enterprises are successfully using the Internet as a new tool of business–allowing

electronic exchange of information, goods, services and payments. Globally,

e-business has really been picking up: Boeing booked spare parts worth $100

million over the Net in 1997; GE saved a fortune by electronically buying $1

billion worth of goods from its more than 1,400 suppliers, and IBM sold $1

billion worth of computer products in February 1999, through its Web site.

According to a Nasscom-McKinsey study, the global spending

through e-commerce is likely to touch $1 trillion in 2004. India too, has the

potential to create e-business worth $1.5 billion by 2004 and around $10 billion

by 2008. And the opportunity lies in both B2B and B2C arenas.

_{Working off the Web}

But e-com is just a transactional component of e-enablement.

E-enablement is about using the networking technologies in such a manner that

most of the operations of an enterprise happen off a network–linking back to

the suppliers and transacting with the customers, for example. The promised

benefits are many–accurate deliveries, overnight order fulfillment, and

real-time, self-service information, all of which require very tightly

integrated business systems.

A typical example can be that of a sales person, in a

brick-and-mortar company, who is constantly on the move. He or she might carry a

laptop to make presentations to the clients, but when required to get in touch

with the office, there would be the telephone, or, worse, the courier for

sending a detailed report. Moreover, the visit to the local office to file an

activity report would always be there. A significant time lag.

On the other hand, if it is an e-enterprise, employees just

need to log on to the company Web site and update their activities, download

whatever information they want, check out for instructions and official e-mails,

as also apply for a leave or a salary advance. Also, in case an additional

information is required to respond to a client’s query or the need to consult

the head office before actually closing a complicated deal is felt, a sales

person can consult the office in real time, using either a chat or a

videoconferencing facility. It would be an anytime, anywhere device and any user

office in the true sense of the word. A near-zero



time lag.

A case in the point is Samsung, a company that is already an

e-enterprise. Its SAP R/3-based system is quite effective and helps it update

the activity report every five minutes. All its operations, including

transactions with the distributors are strictly done off the Web. However,

despite having deep pockets, the company has not managed to buy immunity from

the bottlenecks created by the low bandwidth. According to Vivek Prakash,

national sales and marketing manager, Samsung, "We do lot of data searching

and activity tracking and the system works perfectly well from any of our

offices, all of which are linked through the VSAT. However, when it comes to

accessing the network from a remote site, it is really a nightmare. Imagine the

plight of the distributors and channel partners who use the dial-up link to log

on to our site and spend hours placing orders or tracking their delivery status,

when suddenly the line goes down. Increase in bandwidth, or for that matter, a

more efficient, reliable and cost-efficient access to the Net will definitely

change the situation and make our operations smoother and cost efficient."

Going the MAPS way

According to Anil Menon, director marketing, Citrix Systems

India, organizations will have phenomenal benefits in an unlimited bandwidth

scenario. The ready availability of bandwidth will set the pace for e-enablement

of companies in India. This will also hasten the process of connectivity at the

secondary level, viz extranets linking organizations to their suppliers,

customers and channels. An era of extended organizations and B2B commerce shall

arrive.

Menon also feels that with bandwidth in place and companies

working off the Web, networking will undergo major changes. "Today

networking talks of connectivity only. This will not be the case any longer.

There will be a service-driven network with services being delivered by back-end

servers. The classic changes that will happen will not be restricted to thin

clients only. The kind of devices that will connect to access applications may

be thin clients, particularly in transactional environments like railway

reservations, hotels and factory shop floors. But, they can also be wireless and

handheld devices and set-top boxes," he says. According to him, the browser

will be the access point for true anytime, anywhere computing, with even the

common desktop applications like word processors and spreadsheets moving on to

the Net–desktops giving way to Webtops.

Experts feel that the server-based computing model will help

organizations save 35%-65% of their costs depending on the environment. Other

than cost benefits, users will get better security, centralized management,

higher IT adoption rate, and fast access to applications from anywhere. In

short, the increase in bandwidth will usher in an era of MAPS–management,

access, performance and security.

Apps on the tap

More bandwidth will also mean more ASPs on the Web, with the

apps-on-the-tap model determining the way we acquire applications. Users will no

longer need to choose an up-front IT acquisition route, which is restricted by

capital expenditure budgets; they would be able to hire server farms and

applications or get into service-level agreements. In fact, it probably will

work like the telephone system where users get an invoice at the end of the

month, listing the applications and the time used. Businesses will be able to

adopt a more centralized IT model to reduce complexity.

A no-bandwidth-constraint environment will also mean that

companies do not have to spend on costly network technologies like VSAT to gain

uninterrupted and smooth connectivity. With ASPs providing apps on the tap,

applications hitherto restricted to large corporates on account of high costs of

their acquisition, could well percolate to the SME and SOHO levels though the

pay-by-use model. A classic example would be cyber cafes that today charge

around Rs 30 for an hour of access. The new model may well bring down this cost

to Rs 5-10 for an hour of usage, for a given application. Organizations will be

able to provide their employees a roaming computing profile–doing away the

need for carrying a desktop or laptop.

Apps ahoy!

While present day users, limited by the bandwidth, are able

to afford only mission-critical applications on their networks, the increase in

bandwidth could mean that they would be able to access more applications and

that too at lower costs. But according to Menon, though specialized applications

like videoconferencing would become a reality, only few corporates would deploy

it and that too for few users. The predominant applications would be office

suites, messaging, HR/payroll, CRM and supply chain management, mainly due to

their importance for the enterprise as a whole. Through ASPs, companies would be

able to get the latest applications on a pay-by-use basis, with automatic

periodic updates.

Increase in bandwidth will also mean that businesses run live

video for conferences and training seminars, not bothered by the slow

transmission speed and poor video images that have so far restricted such

practices. Live demos and presentations will become closely entwined with

e-commerce, as consumers will expect companies to give them ‘real’ feel of

products before they purchase one. Improved bandwidth situation will see on-line

retailers competing with each other to provide customers with ‘better shopping

experience’ by allowing them to browse through three-dimensional shelves of

their inventory or watch brief clips of their products.

The concerns

Jim Shepherd, senior vice-president, AMR Research warns that

the notion that a company can transform itself into an e-business by simply

buying a piece of software and adding it to its existing infrastructure is wrong

and dangerous. Talking about e-business strategies and trends in an article in

The Executive Way, Shepherd says, "Companies must instead incorporate

e-business concepts into their overall business strategy. Besides, they also

need to carefully assess the impact of new e-applications and Internet commerce

services on the IT environment and the overall business."

When the bandwidth is not an issue, the traditional

brick-and-mortar Indian enterprises will probably need to heed to this warning.

A mad rush for becoming e-enabled, with a casual approach towards technology,

may land them into trouble. They will need to carefully choose and adopt

e-business models that efficiently address their prioritized requirements,

through appropriate enabling applications and technologies.

Shubhendu Parth



in New Delhi