|
Focusing in a Fuzzy World: Trading in the
Networked World
The Institute of Information Scientists 40th
Anniversary Conference, Sheffield. July 8-11,
1998 Speech by Martyn Daniels
I am pleased to be here addressing your 40th
anniversary conference. I am also pleased and
proud that it is Sheffield. My second home
where I grew up, was, or was not educated and
where I started my career.
When I started my career some 30 years ago
this year, the employment exchange presented
me with an interesting decision. Whether to go
to work in a Computer Department of a major
electrical retailer, Henry Wigfalls, or go to
work at English Steel. The career councillor
advised me that English Steel was a job for
life, offered a real career and that computers
were still a bit iffy. I didn’t like the
thought of going down Attercliffe every day so
I choose computers and never looked back.
If we look at Sheffield over those 30 years we
see the steel capital become a steel village,
a shift from heavy manufacturing to service
industry. Sheffield is now the sports capital
of the UK and you only need to drive down the
east end to see the difference. Where
Hatfields once stood proud now read Meadowhall.
But technology has also not stood still. Far
from it we all know what has happened and the
impact it has had. However, we are now faced
with a revolution, not evolution and one
driven by a technology – The Internet. The
world of the information networked
environment. We all know that the Internet is
dynamic and is growing at a phenomenal rate.
It is pervasive and what we thought of it six
months ago is probably different to what we
think today and what we will think of it in
six months time. It is challenging all our
previous thinking and our commercial
environment. But does it pass the "so what
test"? Will it change what we do, what we
sell, how we do it , who we do it with and our
supply and value chains?
The answer to all the above is a resounding,
yes.
Why is it introducing such change and what new
properties does it introduce that enable it to
have such an impact?
- It does not respect geography -- after
all where is the USA in a virtual world,
companies can be oceans apart and still
climb into the same boat. How many know or
care where the head office of Amazon.com is?
- It challenges territorial pricing, that
was designed for the physical world and its
many domains.
- It challenges the traditional thinking
on our bottom line -- image you owned the
goose that laid golden eggs. The balance
sheet just says one goose and assigns no
value to future earnings. Doesn’t Amazon.com
make this challenge today?
- It demands a global economy and could
promote harmonisation, far quicker and wider
than imagined in the corridors of Washington
and Brussels. It is in fact truly stateless.
- It does not respect time – nine to five
is dead , 24 x 365 now rules.
- It does not respect size as a
competitive advantage and enables the small
to be big by connecting to the capabilities
of others and at the same time remain agile
and adaptable because of their size.
- It does not respect ownership or
commerce – it was born an open and free
environment. Does owning physical inventory
now constitute an asset or a risk?
- It does not respect the processes and
standards that prevailed in the physical
world – it is online and demands real-time,
interactive and constantly learning
solutions.
Today when we visit our High Streets, we all
recognise the familiar names. We know what to
expect when we visit a store. We understand
the price proposition and most importantly,
that we have to pay to get anything. We
understand the difference between fashion,
electrical and entertainment stores. We find
ourselves in a comfortable zone.
The Internet removes all those comfort
factors, challenges every assumption and more
importantly it is the greatest opportunity to
our commercial and information environments
since the printing press. It can create and
promote new Brands that may not exist today in
our physical world but brands which are
instantly global and that can gain significant
exposure with little traditional brand
promotion and marketing spend.
How many today are familiar "Amazon" and is
this recognition restricted to just those who
have used the service or even to consumers
within one country? We all know the answer,
but the question now is not what the brand
stands for today but how it can be used
tomorrow. Traditional booksellers are often
physically restricted not just in their offer
but also by their ability to leverage their
brand, Amazon doesn’t have these problems.
We have all witnessed what the likes of Virgin
can do with a brand and I would contest that
Amazon now has an equal opportunity. But
before we start to grapple with this New
World, we must recognise those issues which
yesterday inhibited and constrained our supply
chain. It is important that the New World
addresses these and doesn’t compound them
further.
How do we service the "tail" -- the 80% of
customers and suppliers who only generate 20%
of value and volume but have a high cost of
service? How do we stop drowning in a sea of
paper, faxes, telephone calls, and clerical
administration, all of which tend to inhibit
instead of enable trade? If we fail to address
this in the networked world we could face a
ridiculous situation where the reader finds
the content online, may even buy it online and
thereafter is communicated with and serviced
inefficiently by paper and telephone and ends
up drowning in a sea of frustration.
Those who only focus on one aspect of the
process without looking at the total process
miss the opportunity. If you look at the US
book market it is obsessed with the order
transaction and often ignores the downstream
transactions that make the overall process and
service inefficient.
How long have trading partners operated with
one hand tied behind their backs -- publishers
not knowing what is selling and bookstores not
knowing what is available and what the price
is? Libraries not knowing if a journal has
been published and firing of automatic claims
one minute after the deadline. Agents, who are
equally in the dark on publishing schedules,
either passing these claims onto the
publisher, or conveniently loosing them. Each
step or stage within a broken information
chain adds a buffer for uncertainty. Between
the individual steps this may be 10% extra,
but across all steps this could be quite
significant. Uncertainty and the lack of
effective communication and trading
partnerships, is the mother of all inefficient
supply chains. The Internet can effectively
address the broken information chain and make
information available to all. However, if this
opportunity is not realised then issues and
associated costs will certainly grow.
Studies in the UK, show that some 60 to 70% of
all customer service calls to general trade
publishers are about price, availability and
order status. A study performed by a US
academic press found that of their 11,000 800
presales calls 95% were about price and
availability. An analysis of their post sales
calls showed some 45% were about back order
information and a further 45% were about
shipment status. They could even cost each
call and it doesn’t take long to total this to
over $900K of annual cost. A sobering thought.
What is your cost of service today?
Authoritative and timely bibliographic
information Wherever we look in publishing, we
see a many to many supply chain, with a
significant volume of new and existing
product. The various sectors may have
different numbers but the story is the same.
We think of it as books and serials, but
increasingly we must view it as "stuff". How
do we find stuff? What is core bibliographic
data or information and who will provide it?
We may know the publisher, if he hasn’t be
acquired this month, and look at their
catalogue. However, this has to be first found
and when found we often find that each varies,
even within the same publisher, on how they
present, navigate and in the consistency of
the data presented. The bibliographic agents
and aggregators are often out of date and have
data processing cycles geared to their CD-ROM
production. In all cases we are asked to view
subscription product separately from book
product. Is this acceptable going forward?
Yesterday we all agreed that there were
probably 8 to 12 data elements that made up
the core bibliographic data, but is this still
accurate today? Where does extended data and
core bibliographic data start and finish?
Context aggregation is an increasingly
important requirement, but one which we all
have paid lip service to in the past. It is
interesting to see that some Bookstores in the
US are starting to prefer to search and value
Amazon.com and Barnes&Noble.com bibliographic
data online than that on Books in Print
CD-ROM. This is inevitable, given the richness
of information and ease of access.
Today, all primary or secondary publishers
must have 6 "Cs" embedded within their market
proposition.
Content, Context, Commerce, Community,
Connectivity and Consistency
In the world of publishing we have to first
ask what do we trade over the Internet,
digital product or physical product? Books,
chapters, journals, issues, pictures,
fragments, information, does it matter? If we
are now moving into a world of selling "stuff"
in whatever media format, what is the impact?
What becomes the key to making the sale? Is it
the content, all those books, journals,
magazines and information that you associate
with publishing today? After all it is the
content that the consumer buys. We can now
publish on paper, CDROM, online, etc but the
question of being able to find the "stuff"
remains, if not grows in its complexity.
The Internet enables you to sell content as
"stuff", to anybody anywhere, anytime.
Amazon.com yesterday just sold physical books
from their US base, they now sell books and
music globally. Their UK operation is now
operational www.amaozon.co.uk. STM and
professional publishers such as Reed Elsevier,
today sell both physical and digital content.
We are entering the world of "stuff".
Yesterday, trading partners bought "off the
shelf", from what could best be described as
physical catalogues. The sales representative
often physically introduced these catalogues
to the buyer. They, the catalogues and not the
reps, weren’t fully searchable, were limited
in the information available and if you didn’t
find a product you couldn’t buy it. We are
reminded of the traditional retailer’s
statement, "if it is not on the shelf, you
can’t sell it". Today, trading partners still
buy from the catalogue, but increasingly this
is becoming a virtual one and one where
everyone is demanding more and more
information and reference about the potential
product they may wish to buy. If it is a book,
they want to see the jacket, read some
reviews, read about the author, read the first
chapter, understand its market position.
Information that enables you to qualify the
purchase and thereby minimise the risk of a
bad investment. Therefore is it the context,
the information about information that
enriches content, enables you to discover it
and also value it, that is the key going
forward. Today’s challenge is to understand
what context is essential and what is nice to
have?
The Internet enables far richer and current
information to be readily accessible to
anybody anywhere, anytime and can also
facilitate links from one database to another
transparently. Context can now be distributed.
Contextual information is no longer an
afterthought in the networked world its is
fast becoming the tail wagging the dog! The
publishing world is currently obsessed with
online. Publishers must be online, initially
they focused on content. and now it is
context.
I wonder how long before they get round to
commerce and the realisation that all three,
go hand in hand. After all, we have to find
it, qualify it and purchase it, before we can
read it. Context, through commerce, to
content. The Internet enables commerce for
all, from anywhere, at anytime. The challenges
of the online marketplace are very interesting
when one looks at selling "stuff" online. The
discovery and qualification process can be
significantly different, accessing the product
is certainly different and we would expect the
business models to also be different. So why
do we continue to be tied yesterday’s
commercial models? We must recognise that
"stuff" will demand new "stuff" commercial
models.
The next "c" is that of Community. That
network of relationships and added value that
together make it happen. Today’s challenge is
to remember this network, this landscape and
map it into the network. Together there is
strength, individually, we all may perish as
we are increasingly all marginalised. It is
easier to respect and accommodate the value
added that others bring to the equation, than
to start from the naive perspective that one
can do it alone. How many today are competing
where they should be collaborating and by
doing so wasting effort, money and potential
opportunities. The Internet enables trading
partners to be virtually linked together to
anybody anywhere, anytime and we should not
forget that together there is often a unique
strength and protection from competitive
threat.
The penultimate "c" is Connectivity. If you
are not connected, then forget it, you’re
dead. Removing the old restrictions imposed by
the postman, the telephone, the fax, the old
Monday to Friday, nine to five and batch
processes are essential to moving into the
future. Often some think that technologies
such as EDI solve this issue, they don’t. EDI
was in fact an extension of the postman, a
batch process that even referred to the
transfer mechanism in terms of "mailboxes" and
"postboxes". EDI will always have its place
for simple, high volume transactions between
established trading partners, but it will not
deal with queries, low volume transfers and
more complex information transfers effectively
or economically.
We must not however dismiss the EDI message
standards that are still important and go some
way to provide another "c" that of
consistency. More important though in the
online world, is the consistency of
presentation, navigation and information. If
everyone did it different, forget it. If there
was logic is the collaboration of message
format standards there is equal logic in
recognising the needs go even further in the
New World.
We are no longer in the world of E/commerce
but also the world of E/service. Content,
Context, Commerce, Community, Connectivity and
Consistency.
The 6 Cs are like a marathon. You don’t enter
at mile 24. You’ve got to be there from the
beginning. So understanding and saying ‘We’ll
just wait’ is not a viable option. You end up
in a position where you don’t have the
competencies, you don’t have the capabilities
and you don’t get into the opportunity set.
The acid test is to ask yourselves how your
business aligns with these foundations for
tomorrow’s world. If you only have parts of
the set you may well find yourselves outside
tomorrow’s opportunities. Two or three out of
six isn’t good enough! It is not enough to
just develop new standards that describe the
content and automatically link to the
appropriate reference. It is not enough to
develop commerce models for selling physical
or online product, either as a whole or
increasingly by fragment. It is not enough to
deploy content online and develop new and
exciting ways of presenting it.
All these steps are necessary but often we
forget the lessons we learnt from yesterday on
how we often failed in the physical world.
Lessons that could now be addressed more
effectively in the network world. So how do we
move forward and what is our vision? How many
understand the concept of "self service?"
"Self service" is about the ability for you to
go and serve yourself to your information, on
a trading partner's system. Home banking is
one example of this. FedEx and UPS are others
where anyone can log onto the Internet and by
entering their parcel tracking number,
instantly track it down world-wide.
Bankers shut up shop and go home every night,
but their money stays out all night. Why not
allow a bookstore or library customer of a
publisher or distributor to service themselves
to publisher information, not Monday to Friday
9 to 5, but 7 days a week, 24 hours per day,
irrespective of time zones.
Effective "Self Service" is a unique Internet
function. E/commerce and E/service is not just
about orders and invoices but about all
communications between trading partners.
Transactions and queries, fulfilment and
customer service. The Internet can break down
the walls that exist between trading partners
and enable us together to redesign the
business process, not to reflect yesterday's
landscape, that relied on the postman or the
phone, but on the new virtual landscape.
A fundamental cornerstone going forward, must
be that a bookstore or library should not be
asked to perform the same function differently
on every web site they go to. It doesn't make
sense to expect them to do this. The key is to
make it simple, affordable and enjoyable to do
business. If every publisher and distributor
creates their own solution to performing the
same standard functions, they will all fail by
competing where they should be in fact
collaborating.
Which brings us to the BookEasyTM family and
the implementation platform of our vision. It
offers standards, functionality, and
significant self-service provision over the
Internet. BookEasyTM is a partnership between
VISTA Computer Services (which can access and
understand publisher systems and information),
Whitaker, the UK ISBN Agency and R.R. Bowker,
the US ISBN agency and a significant number of
publishers, distributors and other industry
players.
In the UK, BookEasy also partners with the
Booksellers Association, who own the UK book
industry payment clearance house. These are
key partnerships that make up the trading
landscape and we expect to expand to include
many others. BookEasyTM through Whitakers
offers central bibliographic search and
discovery, central routing and security
management, as well as central ordering
facilities. At the distributed publisher
sites, it today provides direct access to
publisher operational systems, that offer
current pricing, availability, and ordering
options, as well as the ability to check order
status.
It is an E/commerce and E/service unique
industry community service and is being
developed as such. With all players in the
industry sitting down and working together, to
make the cake bigger for all and not just
enlarging their own slice of the existing
cake. Together we are providing Content,
Context, Commerce, Community, Connectivity and
Consistency.
Every site looks, feels, navigates and
performs exactly the same, a unique
achievement built on real collaboration.
BookEasyTM is not theory, it is real. It was
developed in Internet time-scales (weeks not
months or years).
It puts the book trade back to the vanguard of
electronic trading, where it once was when it
developed and implemented the ISBN. It shows
what can be achieved when we co-operate and
not compete.
It starts to be the vehicle which can address
a great deal of today's supply chain issues
and build tomorrow's supply chain It
strengthens today's partnerships and enables
them to compete in the virtual world. It
enables us to cast off yesterday's paper chain
"baggage" and take advantage of today's
networked opportunities. We call it a family
because we recognise that we are only at the
first base.
We are already working of a number of other
interesting "Easy" services that will enable
publishers to trade upstream, downstream,
service all aspects of their business and
perform in the world of "stuff". Today one of
the opportunities we are seriously currently
exploring, involves a number of major STM
publishers, major subscription agents and a
ISSN bibliographic agency. We are working
together to fully review and jointly specify
SubsEasy or as I refer to it "StuffEasy".
But it doesn’t stop there. There are many
different interfaces with Publishers and
therefore many opportunities to do things
"Easier". Today our processes are governed by
history, the constraints of the paper chain
and the uncertainty in which we all operate.
Within the publishing industry there is
probably one further "C" we must all learn to
practice, that of collaboration. One we all
agree in public to do, but when we get back to
our organisations, we often forget to
practise.
Finally, if one thinks back to the Steel
industry and the changes it has experienced
over these years, I would suggest that the
publishing industry today, is in a similar
position to that of the steel industry 30
years ago. Change is coming far greater than
any of us can predict and far faster than ever
before, who will survive and what the
marketplace will look like in even 5 years is
a challenge. We have to learn and adopt new
ways that enable us together to do things
simpler, smarter and of course "Easier."
Return to top of page
Trading on
the Internet
Trading on the internet should be no
different to trading anywhere. Before we start
to trade we must first understand the
landscape, the market its; size, needs,
issues, etc. We then need to understand our
position within, or related to that market. We
then need a proposition or offer to the
market. Finally we need to set expectations ,
objectives on our costs, returns and
associated time-scales However we all know
that the Internet is dynamic , is growing at a
phenomenal rate, it is pervasive and what we
thought of it six months ago is probably
different to what we think today and what we
will think of it in six months time.
If we briefly look at this challenging
market we see that the Internet challenges all
our previous thinking and environment. It does
not respect geography after all where is the
US in a virtual world. It will demand the
growth of the global economy. It does not
respect size as a competitive advantage and
enables the physically small to be virtually
large. It creates a level playing-field for
all.
What do we trade over the Internet, Digital
product or Physical product ? This is a
virtual world which respects both. You should
not be trying to sell digital product if your
buyer still wants physical. We have to learn
to sell “stuff”. You don’t have to stock the
physical product to sell it over the Internet.
An interesting merchandising issue, the
virtual warehouse.
What is more important in this virtual
world, the full online digital content or the
context? Context being the bibliographic
reference, reviews, abstracts, blurbs, covers,
etc that enrich content, enable you to
discover it and also value it. How do we
balance the current phobia of publishers to
spend money developing marketing vanity sites
with the need to perform commerce and make
money? Today, we clearly see publishers
wallpapering the web with marketing “stuff”
but with little thought to the commerce need
to selling it. Do they wish to strengthen
there existing channels to market and
relationships that bring in their revenues
today, or do they believe that they can build
their direct market and will this weaken their
existing channels? Obviously the issues vary
between the different sectors, but can they as
individual publishers be found on the web ,
let alone satisfy individual consumers needs.
Who will emerge as the intermediaries in this
market? Who will offer “one stop shopping” ?
It is clear that that there are new content
hungry entrants waiting in the wings ;
Microsoft, AOL, Dialogue, etc. as well as
global brands ; B&N, Amazon, Ingram, etc. The
Publisher’s focus must remain on making money.
In the UK ,an extensive review of the
Supply Chain was jointly commissioned by the
BA and PA and performed by KPMG. It did not
tell us anything we didn’t already know. But
it has galvanised our thinking, if only for
this month! How do we service the “tail”. The
80% of customers and suppliers who only
generate 20% of value and volume but have a
high cost of service? How do we stop drowning
in a sea of paper, faxes, telephone calls, and
clerical administration , all of which tend to
inhibit instead of enable trade. How do we
establish common authoritative and timely
information?
How long have trading partners hand
operated with one hand tied behind their backs
- publishers not knowing what is selling and
bookstores not knowing what is available and
what the price is? Studies in the UK, show
that some 60 to 70% of all customer service
calls to publishers are about price,
availability and order status. How do we start
to think about minimising stock holding and
not maximising it across the chain? How do we
increase stock turn and investment return? How
do we build trading partnerships in an
adversarial landscape where a “deal culture”
prevails and results not on growing the cake
for all, but on growing slices of it at the
expense of others?. Uncertainty , the lack of
effective communication and trading
partnerships is the mother of all inefficient
supply chains.
How can the internet help move us forward?
How many understand the concept of “self
service” ? “Self service” is about the ability
for you to go and serve yourself, to your
information, on a trading partners system.
Home banking is one example of this. FedEx and
UPS is another, where anyone can log onto the
Internet and by entering their parcel tracking
number, instantly track it down world-wide.
Why not allow the Bookstore customer to
service themselves to publisher information,
not Monday to Friday 9 to 5, but 7 X 24,
irrespective of time zones. Some would have
you believe that EDI as we know it today will
be the answer. They are wrong. EDI will work
where there is volume and simple transactions.
It will not work with the “tail”, where it is
too expensive, cumbersome and complex, and
cost and utility will always prevail. It will
not work for queries, or forecast information.
The internet is cheap, effective and can reach
the people and needs EDI can’t. On the
internet you can build virtual trading
networks, where you can go from one partner to
the next at the click of a mouse button in
real time. The internet can not only build on
the EDI transaction standards that we have
today, but also introduce new presentation
standards.
A Bookstore should not be asked to do the
same function differently on every web site
they go to. It doesn’t make sense to expect
them to accept this, but we have done.
The internet can break down the Chinese
walls that exist between trading partners and
enable us together to redesign the business
process, not to reflect yesterday’s landscape,
that relied on the postman or the phone, but
on the new virtual landscape. What is clear to
our vision is that the user will only want to
learn once, if everybody did it differently
forget it, and they also want a community
network they haven’t time to surf. So
standards are important but different.
Community is important but different. The key
is understanding these needs and inventing the
surprise, the new way, the environment that
enables publishers to sell “stuff” and make
money.
I don want to talk about BookEasyTM, other
than to that it offers , the standards, the
functionality, the network significant service
functionally over the Internet. BookEasyTM is
a partnership between : Vista , who can access
and understand publisher systems and
information, Whitaker, the UK ISBN agency who
also own Teleordering, RR Bowker the US,
Canadian ISBN agency and in the UK, the
Booksellers Association, won own the UK
industry payment clearance house. The
partnerships that make up the trading
landscape and that we expect to expand to
include many others. It is a true virtual
industry and community service and is being
developed as such. With both publisher’s and
bookstores sitting down and working together
to make their businesses more efficient.
BookEasyTM is not theory, it is real. It
was developed in Internet time-scales (weeks
not months or years). It puts the book trade
back to the vanguard of electronic trading,
where it once was when it developed and
implemented the ISBN. It shows where we should
co-operate and not compete It starts to be the
vehicle which can address a great deal of
today’s supply chain issues and build
tomorrow’s supply chain It strengthens today’s
partnerships and enables them to compete in
the virtual world. It enables us to cast off
yesterday’s paper chain baggage and do things
smarter.
|
