In the near future, consumers are not the only ones who will take advantage of the applications and value provided by the Internet. Information technology professionals see the Internet playing an increasingly vital role in business-to-business applications.
SN: What opportunities do you see for business-to-business applications using the Internet?
JOHN GRANGER: I can see it reducing electronic data interchange expenses. There are vendors encrypting EDI for vendor transactions, so by using the Internet the cost savings can be enormous. I can see savings on the order of more than 50%.
MIKE HUBERT: With the Internet, we could have all of our business [operations] be a part of a wide area network, including product information, turns, sales information, orders to suppliers, etc. When we tie this together with trust among our business partners, and get the right economics worked out, this could provide a cost-effective WAN or at least run a private network.
BOB SCHOENING: It's clear that today, after what's transpired over the last five or six years, that there's a great benefit if there's a good relationship between the retailer and suppliers. We've seen the wall break down, and it's to the benefit of the retailer, the supplier and ultimately to the consumer. The Internet allows that opportunity to become available to all suppliers, regardless of size -- not just the Procter & Gambles, Krafts and Nabiscos of the world.
We're about one year away from implementing Internet technology that will allow us to communicate with virtually all our trading partners, including the second- and third-tier suppliers.
JACK SCOTT: We have a couple hundred vendors that account for most of our volume, and then there are 2,000 vendors with lots of itty-bitty transactions. These small vendors can't afford putting in EDI and using value-added networks, so they do it manually, and all of us spend money doing those transactions. To the extent that we're able to use these new technologies as a low-cost data-entry device into an EDI transaction, these other vendors will be able to come on board. There certainly are companies that are trying to come in with those solutions, and position themselves for the next wave.
RON WALDBILLIG: The Internet is still in its early stages, but it is developing quickly. One thing that makes it such a viable business solution is that everyone uses it today, both for business and home use. Often it takes so long to buy in to new technology, but it seems that overnight the Internet has been accepted by all [types of users].
SN: Is it reliable and secure enough for some, or all, corporate communications?
HUBERT: There are still concerns; every day there seems to be some new security flaw and other things that can restrict data flow. However, people continue to plunk their credit card numbers on-line -- even if they take a deep breath when they do it.
WALDBILLIG: I believe the Internet is secure. We tend to overemphasize the security issue because so many people have access to it. But users access the Internet over a telephone line, which has always been our normal means of communication. As long as we use fire walls and security so unauthorized users cannot get in, the Internet is secure enough for business transactions.
SCHOENING: It's similar to moving away from mainframes into the client/server world. Companies have to be somewhat cautious in the kinds of communications and activities they're going to be involved in. I think a lot of business-to-business interactions won't be through the Internet in its pure form; they will be through extranets. These allow suppliers to enter your company, and you're able to enter theirs.
Of course, companies doing this will need to implement fire walls and security that limit access, not only to whom you want in but the places you're willing to let them go. Obviously you don't want them to have access to all that's taking place within your system.
SN: If the Internet's business-to-business applications grow, what impact will that have on EDI?
GRANGER: I think it will take EDI further. When it comes to communications, just having a facility isn't the answer. There needs to be communications standards, and the use of EDI and add-ons brings that.
SCOTT: Is it going to replace the classical VAN (value added network) EDI? No, it will supplement it and add value. It lets the small guys do something low-cost, viable and capable, and be successful at it.