e
E-Commerce Across GE
Summary of activity
by business.
Keith Dunnell
Manager, Corporate Initiatives Group
October 15, 1998
Statistics on Internet E-commerce
Use of the Internet for business-to-business commerce is
growing rapidly...
•Business-to-business commerce will account for 78% of the dollar value of
cybertransactions this year
•Businesses will exchange an estimated $17 Billion worth of goods and
services over the Internet in 1998
•By 2002, Internet business-to-business e-commerce is expected to top
$327 Billion
•Of companies that use EDI today, 80% plan to implement extranets within
five years
•By 2003, it is estimated that over 30% of EDI data will traverse the Internet
2
Statistics on Internet E-commerce
Best practices research shows that Internet E-commerce
reduces costs and increases customer service...
•CISCO saves $2M per year in documentation printing costs and has
saved $360M in sales marketing and technical support costs
•GE Appliances reduced order transaction cost from $5 per order to $1 per
order
•FEDEX reduced call center volume by 50%
•GEIS reduced help call volume and increased customer service to 24
hours, 7 days/week
•Sun has saved over $20 MM in marketing costs
Companies will either lead or lag in the race towards greater
profitability as more business is conducted using this technology.
3
Successful Use of the Internet for E-commerce
Companies that successfully do electronic commerce over the
Internet tend to:
•Sell products or services that can be chosen/configured from a ‘catalog’
•Serve customers that have some idea of what they want to purchase
•Provide customers with value-added capabilities online such as order entry
•Service a high volume of transactions (sales, inquiries, etc.)
•Provide customers with an online communications channel (e-mail and/or
comments section)
•Advertise their website externally
•Offer competitive prices/terms
4
External Business’ Use of the Internet for E-commerce
List of External Best Practices - Sell Side Processes
Advertising
• FEDEX posts their URL on their vans and trucks, and lists it on all documentation
• Dell advertises their website in product magazines and other print media
• Amazon.com advertises on www.aol.com, and is listed in search results from various
search engines
• 3M’s URL is advertised in print media
• Charles Schwab advertises its online brokerage in major financial publications
Order Placement
• Cisco has daily sales of $11MM through online ordering
• Boeing sold $100MM of spare parts online in 1997
• Adaptec (chip mfr.) reduced OTD cycle time by 50% by doing sales online
• Ford, Chrysler take car orders online and pass them to dealerships
Sources: Benchmarking research and interviews.
5
External Business’ Use of the Internet for E-commerce
List of External Best Practices - Sell Side Processes
Order Confirmation
• Amazon.com, Dell send e-mail messages confirming online orders
usually within minutes of order placement
• Schwab sends an online confirmation upon ordering and mails a
confirmation after trade execution
• Cisco automatically sends order confirmation via e-mail
Order Status
• FEDEX reduced calls to their customer service center by 50% using their
website
• GTE provides system status online, including scheduled maintenance
Sources: Benchmarking research and interviews.
6
External Business’ Use of the Internet for E-commerce
List of External Best Practices - Sell Side Processes
Other
• Amazon.com Personal Notification sends users an e-mail when a new book is
published that matches the user’s interests
• Schwab has a demo on its website of using its online services
List of External Best Practices - Buy Side Processes
• LA County Office orders and pays online - saved 5% just by online comparison
shopping (on $650MM procurement base), projects reduced inventory of $38MM
over next 5 years
• Adaptec reduced WIP Inventory by $9MM through online procurement
• Raytheon expects purchase order transaction cost will drop from $100 to $3
• Autolinx Virtual Private Network (a predecessor to ANX, the Big Three Automakers’
new VPN) saved Defasco Inc. 75% on procurement costs
Sources: Benchmarking research and interviews.
7
GE Business’ Current Use of the Internet for E-commerce
Currently GE businesses are beginning to use Internet
technology to transact with customers and improve
service.
• First release of Internet order entry systems currently in use, typically
accounts for <10% of business sales
• Typical functionality includes order status
• EDI is commonly used for billing
• Need quantifiable measurement of Internet E-commerce benefits
• Opportunities across businesses for sourcing using the Internet
8
GE Current Internet Use for E-Commerce
GE
Business
Advertising
Plastics
•Global Knowledge
(Americas Net
Resins)
– product guides
– tech specs
– product
applications
Plastics
•www.polymerland.co
(Polymerla m
nd)
– product info
– product
performance
specs
– material selection
DB
Industrial
Control
Systems
GEIS
•Online product
catalogs
•Mod Center
advertises on webst.
Sell-Side Processes
Order
Promotion Order Placement Confirm. E-Bill
Shipping
Payment
Collection
EDI
(GEIS
COE)
•Polymerland
Browser used to
stimulate Internet
use
•Special offers on
aged inventory
•Pre-registered top
850 customers on
website, then
mailed “how-to”
CD-ROM to
stimulate site
usage
•Displays active
promotions
•10% of sales
currently online
•Full automation of
order entry with
Oracle system
•Customer link
– provides quotes
– must talk to CSR
to place order
•Client Services
Website allows setup of EDI Trading
Partner relationships
•Project
underway
EDI
EDI
N/A
EDI
9
GE Current Internet Use for E-Commerce
GE
Business
Advertising
Supply
•Online catalog
Medical
Systems
•Magnetic Resonance
site contains data on
MEDS products
•Online Accessories
advertised at Med
Device convention
booth, by direct mail,
and telemarketing
Order
Promotion Order Placement Confirm. E-Bill.
•MEDS website
has info on TIP
TV (online
customer training
program)
•Online
Accessories has
promotions online
GETS
GEPS
Aircraft
Engines
Lighting
Appliances •Product features &
specs on website
ED&C
NBC
•Product info online
•Marketing websites
•NBC interactive
websites advertise
TV programs
Sell-Side Processes
• SupplyNet has
online order entry
that is input to
automatic order
release
•Online Accessories
has online order
entry
•SupplyNet has
automated pickpack-ship if
inventory is
available
•Future
release of
online
accessories
?
EDI
•Parts on the web
project underway
•Project underway for
spares
•Online promos for •Customer Net
customers
automatically ships
N/A
Shipping
Payment
Collection
•Backorder
shipment
notification
•EDI, dial-up system
N/A
N/A
EDI
Custo •Customer Net
mer
Net
EDI
N/A
N/A
•CRD codeveloped
application;
electronically
linked online
access to A/P
mainframe
system
•Customer Net
– EFT
– CreditCards
N/A
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GE Current Internet Use for E-Commerce
Sell-Side Processes
(continued)
GE
Customer Order Customer General Customer
Business Modification Feedback/SurveysCommunicationsOrder Status
Other
•Project underway •Project
Plastics
(Americas
underway
Resins)
•Tech Svc 24 hours / 7 days
•Customer e-mails •Can check
•Partnered with IDES database access
route to Internet
open / closed
(catalog of Plastics Mfr product info)
CSR team; regional orders
Plastics
•“Expert” question bulletin board
CSR responds to e(Polymerl
•YTD buying history per customer
mail
and
•Shows inventory available
•Inventory available
Industrial •Customer link
•Customer Link
•Mfr X-reference
Control
can be used to
gives order
•Lead time
Systems modify existing
status
•Model data compare and search
quotes
•Online engineering drawings
•Client Svcs
•Global cust. can e- •EDI doc status
GEIS
Website
mail questions
•Modify
saved
•Order status •SupplyNet allows checking inventory
Supply
quotes
status
•Modify saved
•Online
•Online Accessories has smart engine
MEDS
quotes
Accessories
search
•Oracle Brows.
GETS
•Web Council planning strategy
GEPS
GEAE
•Cust. Info Del. •Inventory status available
Lighting
System
GEA
•48 hrs to release
Customer Net
•“Notes” section
•Customer Net •Purchasing history
online order form
•Proof of delivery printing
•Model comparison
ED&C
NBC
N/A
N/A
N/A
N/A
N/A
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GE Current Internet Use for E-Commerce
GE
Business
RFQ
Plastics
Industrial
Control
Systems
GEIS
Supply
Medical
Systems
Aircraft Engines
Appliances
Transportation
ED&C
Lighting
•TPN
Post
Capital
•TPN
Post
NBC
Power Systems
Ordering
E-Payment
Buy-Side Processes
Modify
Order
General Vendor
Communications
•Requesting funding for TPN
Buyer Services
•Oracle WWW requisitioning
•EDI
•Starting installing TPN Buyer
Services
•Supplier webstation pilot
•EDI, faxes
•Purchase Card
•Motor Carrier finished
goods services:
– commitment
changes
– inquiries on load
information
– reporting of
delivery problems
•Supplier Process
Quality system
provides supplier
data
•EDI
•Oracle WWW requisitioning
•TPN Buyer Services
•Purchase Card
•Requesting funding for TPN
Buyer Services
•Working with GEIS
on supplier extranet 12
GE Capital
Seven GE Capital Businesses (3 Consumer Services, 1 Mid-Market
Financing, 1 Specialty Insurance, and 2 Equipment Financing) are
currently using the Internet to provide customers with full sales and
service.
Post-Sales
Support & Service
Prospecting
CURRENTLY
(Receive Request/Quotes On-Line)
Order Entry
GEFA
Penske
ERC
ECG
CF
(View/Score/
Order On-Line)
VFS
(On-Line Customer Service)
GEFA
Mortgage
Insurance
Penske
Penske
TIP
Real
Estate
GCF
GECAS
TIP
ERC
Fleet
Mortgage
Insurance
Fleet
RFS
Hawaii
Mortgage
Insurance
Americom
GEFA
Railcar
CF
RFS
GCF
RFS
Fleet
GCF
VFS
Railcar
GECAS
VFS
13
GE’s Use of the Internet for E-commerce
Internal Best Practices
• GE Polymerland did focus groups with customers to determine website content,
and used the Polymerland Browser to stimulate WWW use amongst customers
• GEIS pareto analyzed calls coming in to Client Services, designed site content
around Inquiry calls, and realized $225K in savings from reduced call volumes
• GE Supply’s SupplyNet has automated order entry and release so that WWW
users that order in-stock items automatically receive them next business day
• GEICS’ Customer Link has Motor model search, model compare, and CAD
drawings online, which enables users to configure their own motor system and get
a price quote
• GEMS’ Online Accessories includes online ordering and promotions, a ‘smart’
product search engine, and an online customer comments/feedback section
• Appliances’ CustomerNet includes online ordering and promotions, accepts
electronic payments, provides order status and invites customer feedback
• GEFA which provides online sales and customer support is acting as a Center of
Excellence for GE Capital Businesses and sharing E-commerce best practices
Sources: Best practices research and interviews.14