E-Commerce Across GE

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       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
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

•Serve customers that have some idea of what they want to purchase

•Provide customers with value-added capabilities online such as order

•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
 External Business’ Use of the Internet for E-commerce
List of External Best Practices - Sell Side Processes
• FEDEX posts their URL on their vans and trucks, and lists it on all
• 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.
External Business’ Use of the Internet for E-commerce

   List of External Best Practices - Sell Side

   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
                                                       Sources: Benchmarking research and interviews.
External Business’ Use of the Internet for E-commerce
List of External Best Practices - Sell Side Processes

• 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.
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

GE Current Internet Use for E-Commerce                                                                Sell-Side Processes
  GE                                                             Order                                           Payment
Business Advertising                  Promotion Order Placement Confirm.E-Bill Shipping                         Collection
Plastics   •Global Knowledge                                                                    EDI
(Americas Net                                                                                   (GEIS
Resins)      – product guides                                                                   COE)
             – tech specs
             – product
Plastics   •www.polymerland.co       •Polymerland          •10% of sales            •Project    EDI
(Polymerla m                          Browser used to       currently online         underway
nd)          – product info           stimulate Internet   •Full automation of
             – product                use                   order entry with
               performance           •Special offers on     Oracle system
               specs                  aged inventory
             – material selection    •Pre-registered top
               DB                     850 customers on
                                      website, then
                                      mailed “how-to”
                                      CD-ROM to
                                      stimulate site
Industrial   •Online product         •Displays active      •Customer link
Control       catalogs                promotions             – provides quotes
Systems      •Mod Center                                     – must talk to CSR
              advertises on webst.                              to place order
GEIS                                                       •Client Services                     EDI     N/A     EDI
                                                            Website allows set-
                                                            up of EDI Trading
                                                            Partner relationships
GE Current Internet Use for E-Commerce                                                                  Sell-Side Processes
  GE                                                             Order                                                       Payment
Business Advertising                  Promotion Order Placement Confirm.E-Bill. Shipping                                    Collection
Supply     •Online catalog                                • SupplyNet has                                •SupplyNet has
                                                           online order entry                             automated pick-
                                                           that is input to                               pack-ship if
                                                           automatic order                                inventory is
                                                           release                                        available
Medical    •Magnetic Resonance       •MEDS website        •Online Accessories     •Future                                   •CRD co-
Systems     site contains data on     has info on TIP      has online order        release of                                developed
            MEDS products             TV (online           entry                   online                                    application;
           •Online Accessories        customer training                            accessories                               electronically
            advertised at Med         program)                                     ?                                         linked online
            Device convention        •Online                                                                                 access to A/P
            booth, by direct mail,    Accessories has                                                                        mainframe
            and telemarketing         promotions online                                                                      system
GETS                                                                                              EDI
GEPS                                                      •Parts on the web
                                                           project underway
Aircraft                                                  •Project underway for
Engines                                                    spares
Lighting                                                                                          EDI
Appliances •Product features &       •Online promos for •Customer Net             •Backorder      Custo •Customer Net       •Customer Net
            specs on website          customers          automatically ships       shipment       mer                         – EFT
                                                                                   notification   Net                         – CreditCards
ED&C       •Product info online                           •EDI, dial-up system                    EDI
NBC        •Marketing websites       N/A                  N/A                  N/A                N/A   N/A                 N/A
           •NBC interactive
            websites advertise
            TV programs                                                                                                                       10
GE Current Internet Use for E-Commerce                                                   Sell-Side Processes
   GE        Customer Order Customer General Customer
Business Modification Feedback/SurveysCommunications Order Status                                  Other
Plastics                                   •Project underway •Project
(Americas                                                        underway
                                                                                 •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)
Plastics                                    CSR team; regional orders
                                                                                 •“Expert” question bulletin board
(Polymerl                                   CSR responds to e-
                                                                                 •YTD buying history per customer
and                                         mail
                                                                                 •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
                                                                                 •Online engineering drawings
                              •Client Svcs •Global cust. can e- •EDI doc status
GEIS                           Website      mail questions
Supply     •Modify saved                                        •Order status •SupplyNet allows checking inventory
            quotes                                                                status
           •Modify saved      •Online                                            •Online Accessories has smart engine
MEDS        quotes             Accessories                                        search
GETS                                                            •Oracle Brows.
GEPS                                                                             •Web Council planning strategy
Lighting                                                        •Cust. Info Del. •Inventory status available
GEA        •48 hrs to release Customer Net •“Notes” section     •Customer Net •Purchasing history
                                            online order form                    •Proof of delivery printing
                                                                                 •Model comparison
NBC        N/A                N/A          N/A                  N/A              N/A                                         11
GE Current Internet Use for E-Commerce                                                 Buy-Side Processes
  GE                                                                             Modify              General Vendor
Business           RFQ   Ordering                         E-Payment              Order               Communications
Plastics                 •Requesting funding for TPN
                          Buyer Services
Control                  •Oracle WWW requisitioning
Supply                   •EDI
Medical                  •Starting installing TPN Buyer
Systems                   Services
Aircraft Engines         •Supplier webstation pilot
Appliances               •EDI, faxes                      •Purchase Card   •Motor Carrier finished   •Supplier Process
                                                                            goods services:           Quality system
                                                                             – commitment             provides supplier
                                                                               changes                data
                                                                             – inquiries on load
                                                                             – reporting of
                                                                               delivery problems
Transportation           •EDI
ED&C                     •Oracle WWW requisitioning
Lighting       •TPN      •TPN Buyer Services
Capital        •TPN                                       •Purchase Card
Power Systems            •Requesting funding for TPN                                                 •Working with GEIS
                          Buyer Services                                                              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
                   Prospecting                                                                                 Post-Sales
            (Receive Request/Quotes On-Line)                                                                Support & Service
                                                                                                              (On-Line Customer Service)
                                                                      Order Entry

            GEFA            ERC             Penske             VFS           (View/Score/
                                                                            Order On-Line)                      GEFA        CF

               ECG                  CF               Americom

                                                                                     Mortgage      Penske
                                                                                                               Penske                  ERC
                                  Railcar              Fleet

                                                 Mortgage                    Fleet         GCF
                    Real           GCF
                   Estate                        Insurance                                                      RFS        Fleet           GCF

                                                                            RFS              VFS
               Hawaii             GECAS              RFS                                                        Railcar
                                                                                                                          GECAS         VFS
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
• 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
• 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
• 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 and interviews.14
                                                         Sources: Best practices research