ARTICLE FOR IMIS COLUMN IN COMPUTINGFEBRUARY
1990sWorld Wide Web
e-commerce is not new. The first conventions
for international cable traffic date from just after the US Civil
War. The first case on whether a cable authorisation is a signature
is over a hundred years old. Today over 90 per cent of international
trade is negotiated, transacted or authorised electronically.
As yet, less than 1 per cent is transacted over the Web.
|UK Payments||% of Total Billion
||% Change on Previous Year
||8.3||+8.2 Direct Debit/Credit, Standing Order etc
||5.1||+6.0 £98 billion
||8.0||-3.2 £1,200 billion
|Total Non-Cash (Plastic Card,
||1.0||-4.6 Post Office Order Books, Pass Books
Source: APACS1998 Payment and Cash Acquisition
Over 20 per cent of current UK transactions are already electronic
(credit cards, direct debits, standing orders and so on). Most
of you are paid by BACS and settle your regular bills by standing
order or direct debit. Your visits to the supermarket are bar
code scanned, card paid and trigger a series of EDI re-ordersbut
you have to do the expensive and labour intensive picking, packing
and local delivery yourself. Less than 0.01 per cent of UK transactions
are over the Web.
World Wide Web1990s
Atlanta Olympics Test Bed1996
Moreover, over 90 per cent of Internet transactions are not
over the Web. They are over the EDI supply chain systems of the
US aerospace, retail and finance industries which use the TCP/IP
protocols for secure and pre-determined routing, "guaranteed"
performance and delivery as opposed to "any-to-any",
"best endeavour" delivery by whatever route currently
available, packet switching.
The idea that the Internet has changed the pace of change
is equally wrong. The transition from the US communications standby
for WW3, including the conferencing and supply chains of the defence
suppliers, through semi-academic e-mail and information services
to a global e-advertising and e-information network has taken
over 30 yearsthe first nodes outside the United States
date from 1967. The World Wide Web is over 10 years old (layers
of bloatware on a 1980s page swapping protocol). Even Amazon.com
is over five years old. I' not yet the most expensive start-up
since the Canadian Pacific Railway but it's getting that way.
The Internet is no more, and no less, than the latest stage
in the evolution of the world's largest machine, the global telecoms
network. The next stage of evolution being by the protocols for
digital TV and the wireless mobile, plus a new generation of analogue
technology to handle the bandwidth required.
So why the haste to get users to transition to web-based
products and services, rather than wait for the bottlenecks to
be removed and the online credit-checking, authentication and
payment systems to work?
Why the promotion of the Web as synonymous with the Internet
and of the Internet as synonymous with Electronic Commerce?
Why the lack of publicity for those who have, very profitably,
been using web front-end to EDI systems for many years?
Why publicise web-based operations which can handle thousands
of transactions an hour but not those which use EDI to handle
millions an hour?
Is it that:
dot.coms account for all the growth in advertising
and PR spend over the past 18 months in the UK and US?
telcos need a boom in bandwidth hungry mass-market
applications to prevent a crash in revenues as competition rises
and costs and barriers to entry fall?
hardware and software suppliers need to restart
cash flows after the Y2K systems freeze before users jump from
PC and browser protocols to WAP and Digital TV?
those who are successfully and profitably marrying
the old and the new while preparing for the next, keep quiet and
are delighted to see potential competitors pouring their funds
through the holes in the Web?
The current situation gives massive opportunities for IT
and e-commerce Directors with strategic vision as opposed to technology
blinkers. But first you must ensure that the rest of the Board
shares your vision.
Ensure that they all have personal experience of crawling
through the cybercrud and not merely watching the pre-cached demos.
Give them ISDN lines and cable modems so that they know that the
bottlenecks are such that doubling or quadrupling the bandwidth
makes little difference. Then sell them on the benefits of marrying
EDI with low bandwidth web-based front-ends for trial services
this Spring with rapid roll-out in the event of success. But tell
them you expect to save the main investment in mass-market roll-out
for when there is two megs or WAP and Digital TV to your target
customers (probably the year after next).
But ensure that your colleagues know that the main difference
between success and failure is building and retaining an in-house
team which understands the business and its customers, not just
the technology. That means generous profit-related bonuses and
share options for the key members of the e-commerce team you plan
to recruit and develop in-house from the brightest and best of
their staff (and of course for yourself!).