Retailers and wholesalers are only just beginning to leverage the potential of the Internet to streamline communications and enhance business-to-business practices.
est business benefits -- and impact -- may still lie ahead.
The Internet, and intranets, could play a prominent role in how companies communicate, and conduct business. But the infrastructure, systems standards and understanding necessary to take full advantage of the technology, while advancing rapidly, still have a long way to go.
Here are how five industry leaders see business use of the Internet shaping up today and evolving in the near future:
SN: How great an impact has the Internet had on business practices?
Tom Dooner: It's fair to say there's a lot more hype than reality as it relates both to business and the consumer. The Internet will play an important role in the future. There's little doubt about that.
I have no doubt that people are and should be experimenting with the technology today. They must be prepared when the capabilities are expanded. But it should be looked on as a research-and-development effort.
One of the most common things discussed today is how to conduct business through the Internet. There's a lot of testing and searching going on about how to use the Internet effectively and that's a pretty good indication that people don't understand what it is and how it can be used.
Ed Oertli: Sharing information between businesses is the initial use we're seeing. Providers of information, services and products are transmitting quite a bit of information through the Internet today and it's working quite effectively. It's speeding up communications and reducing costs.
Don Reeve: The Internet already has had a tremendous effect on business-to-business operations and it appears to have only just begun. Electronic mail; document transfer; and faster, cheaper and better ways for companies to market their products are just a few of the ways businesses have benefited from the Internet.
As companies address these opportunities, they must examine their specific needs and how the Internet, or an intranet, can help provide cost-effective ways of doing business with suppliers and customers.
Dick Lester: The only real direct application I see right now going over the Internet has to do with exchanging information between companies, such as UPC catalogs. When you're talking company to company, there's some potential there. I don't know whether that potential will fulfill itself because there are other better-controlled mechanisms for exchanging most of that information.
The only way the Internet would start supplanting existing networks is if it dramatically affected the costs of doing EDI transactions with vendors or if there were a lot more information available than on the proprietary networks. It's up in the air as to how successful that's going to be.
SN: What are some of the major obstacles to greater use of the Internet for business purposes?
David Reed: The Internet can be used to connect to the customer through home shopping and for information disbursement. Going beyond that, I think we've got a bandwidth problem. With the number of people getting on the Internet, if you attempt video and data transfer, you're going to break the backbone of it. I don't think we've addressed that yet.
Have you ever timed how long it takes e-mail to reach its destination? It varies. Is that the type of reliability we want today? There are some problems there.
Dooner: The controlling factor in the success of the Internet will be bandwidth: how much and the quality and speed with which data can be transmitted.
There are retailers who have dabbled in it successfully. People are most definitely providing information through the Internet and some are even selling things. But determining how a wholesaler or retailer capitalizes on that communications network involves a major strategic commitment.
SN: What about future business uses of the Internet?
Reeve: It won't be long before the number of companies having an Internet/intranet presence reaches critical mass, pretty much making it a requirement for doing business.
Oertli: As more retailers, manufacturers and others join in, they'll become part of the bigger picture and grow it. All the point-of-sale software companies are doing more things, such as electronic bulletin boards, and pulling software down to upgrade on the fly. It's quite effective for managing software-program release levels. That's here today and will continue to grow.
Dooner: One of the facts of life today is associated with what is called network-centric computing, which enables businesses to function over the Internet in a way that they can't function for the most part today.
Many business systems requiring in-store databases and applications today may not require them tomorrow, for instance, if they're connected via the Internet through a service provider that has the application residing at its site. The retailer would conduct and manage that application over the Internet rather than having that application or database reside in-house.
There are some significant strides that are going to be made on ways to use the Internet to do more than just offer product for sale or information to the public. There will also be ways to use the Internet to run applications at the store and acquire data.
It's beginning to happen now. In about three to five years, the concept will become much more completely understood, and that will probably be within the same time frame in which the bandwidth issues will be addressed.
SN: What about intranets?
Lester: Intranets are nothing more than the networks we've already built using technology such as browsers and web-page development tools built for the Internet. To that extent, I think intranet activity has real potential for bringing more data more quickly to more people in our business.