for The National Transport Secretariat E-BUSINESS TRENDS

Working Paper 2 of the E-Business and Transport Project

for

The National Transport Secretariat

E-BUSINESS TRENDS

Nariida Smith

CSIRO - Building, Construction and Engineering

Luis Ferreira

Queensland University of Technology

Elspeth Mead

Queensland University of Technology

19 October 2000

For further information or clarification please contact

Dr Nariida Smith

Principal Research Scientist

CSIRO Building, Construction and Engineering

PO Box 310 North Ryde NSW 1670

Phone 02 9490 5466

Fax 02 9490 5777

e-mail nariida.smith@dbce.csiro.au

This research was undertaken in collaboration with the Built Environment Research Unit of the Queensland Department of Public Works.

? CSIRO/QUT 2000

EXECUTIVE SUMMARY

The second Working Paper for the impacts of e-business on transport project, reports on a literature and document search for trends and developments in e-business, which may have significant transport impacts. E-business is defined as including e-commerce, either between Businesses to Business [B2B] or Business to Customers [B2C], and the adoption of electronic technology within businesses.

We suggest that growth in e-business stems from the combined existence of: market demand; suitable enabling technology; and skills/familiarity in management/users/ industry/government. Thus, we consider:

Internet Readiness: for example, 46% of Australian adults had accessed the Internet [May, 2000]; 37% of businesses had Internet access as did 88% of government organisations [June 1999]. Training will be needed for the IT professions and the community at large, but the more urgent need is for e-business management skills.

The Market: for e-business in terms of: products, including the move of established retailers into e-business, and increases plus changes in the services offered by intermediaries; place or channels such as electronic portals as new market places for industry/consumers and e-fulfilment, the new logistics practices required by e-business; regional and international promotion to, and then the price of e-business, security for business and safety for consumers. Technology: in four categories of application: Standardisation, for interoperability of both hardware and software; Ease of use with new languages such as XML offering wider markets and bandwidth limitations slowing uptake; New technologies such as electronic agents to help users sift unwieldy amounts of information to find products, services, and even each other; and finally Security devices such as biometric recognition.

Applications are discussed in relation to:

B2B: National and global sourcing, e-procurement is set to boom; Supply chain management, tailoring orders to specifically service customers; Regional industries and SMEs entering the market.

B2C: is divided into activities which require physical travel or transfer of goods such as shopping and travel/tourism; then virtual services such as entertainment/infotainment, online banking and trading, then health and education.

We conclude with a tabulation of the estimated significance of the developments discussed for e-business in the short-term 2001-2005 and medium-term 2006-2010.

TABLE OF CONTENTS

EXECUTIVE SUMMARY................................................................................................II TABLE OF CONTENTS..................................................................................................III TABLE OF FIGURES......................................................................................................IV 1INTRODUCTION (1)

1.1E-BUSINESS AND E-COMMERCE (1)

1.2E-BUSINESS AND TRANSPORT (2)

2E-BUSINESS READINESS (3)

2.1HERE AND NOW 1999 - 2000 (3)

2.2USERS ONLINE INTERNATIONALLY (5)

2.3UP-SKILLING FOR THE FUTURE (7)

3MARKET CHANGES (8)

3.1PRODUCTS IN AND OF THE MARKET (9)

3.2PLACE: ELECTRONIC AND PHYSICAL CHANNELS (11)

3.3PROMOTION AUSTRALIA ALL OVER (13)

4TECHNOLOGY TRENDS (16)

4.1STANDARDISATION (16)

4.2EASE OF USE (17)

4.3SECURITY DEVICES AND APPROACHES (19)

4.4NEW TYPES OF SERVICES (19)

5B2B SPECIFIC (21)

5.1NATIONAL/ GLOBAL SOURCING (21)

5.2SUPPLY CHAIN CHANGES (21)

5.3REGIONAL AND RURAL INDUSTRIES (22)

5.4SME’S ENTERING THE MARKET (22)

6B2C GOODS AND SITE SPECIFIC SERVICES (23)

6.1SHOPPING: STAPLES AND DISCRETIONARY ITEMS (23)

6.2TRAVEL AND TOURISM (24)

6.3SERVICES: GOING OUT AND COMING IN (25)

7B2C VIRTUAL SERVICES (26)

7.1ENTERTAINMENT /INFOTAINMENT (26)

7.2ONLINE BANKING / SHARE TRADING/ BILL PAYMENT (27)

7.3HEALTH AND EDUCATION (28)

8SIGNIFICANCE OF E-BUSINESS TRENDS (29)

REFERENCES AND BIBLIOGRAPHY (31)

GLOSSARY (36)

TABLE OF FIGURES

Figure 1: Business Types with Computers and Internet Access - June 1999 (4)

Figure 2: Monthly Increase in Global Internet Access (6)

Figure 3: Countries With More Than 20% of Population Online - September 2000 (6)

Figure 4: Middlemen Roles in Old Industrial Economy and New Information Economy (10)

Figure 5: Sears Carrefour GlobalNetXchange (11)

Figure 6: Links Between OIC Strategies and the Premier’s Vision - WA Online: Regional Strategies (13)

Figure 7: Cost Structures in Vendor to Customer Transactions (14)

Figure 8: UDDI (16)

Figure 9: Woolworths Online at https://www.360docs.net/doc/4d6752697.html,.au/ (24)

Figure 10: Banking Online at htttp://https://www.360docs.net/doc/4d6752697.html,.au (27)

Figure 11: Estimated Significance of Developments for E-business (30)

1INTRODUCTION

1.1E-Business and E-Commerce

This is the second Working Paper from a project designed to consider the impacts of e-business on the Australian transport system, together with any constraints that the transport system might place on e-commerce opportunities. As noted in our first paper, which considers the issues involved in assessing the impacts of e-business on transport [Smith et al., 2000], the very rapid growth of e-business provides several forecasting challenges. Many of the usual prediction paradigms break down. Careful consideration of probable new developments and trends in e-business itself is needed before we can assess its transport impacts.

We repeat here the operational definition of e-business used in this study, as encompassing e-commerce including Business to Business [B2B] or Business to Consumer [B2C] and initiatives within firms:

"Electronic commerce [e-commerce], the buying and selling of goods and services on the net - or worldwide web - is growing at a phenomenal rate as companies and consumers discover the benefits of instant access to data and the ability to make on-screen transactions. But e-commerce is not the whole story. Through the rapid development of information technology, businesses can link up all their internal and external activities - from supply and purchasing to sales and marketing - into a single seamless operation. This is defined as e-business, although the two terms are often used interchangeably." [Fisher, 1999]

When this definition is used, e-business is not such a new phenomenon as electronic data interchange has existed for around thirty years. At the same time business has been accustomed to bidding for share or commodities via organised markets. This may help to explain the explosion of B2B e-commerce once the Internet provided enabling technology. We will suggest that growth in e-business stems from a combination of:

?Existence of a market demand or need;

?Existence of suitable enabling technology; and

?Existence of skills/familiarity in management/users/ industry/government.

E-business particularly provides increased speed and/or reach. For all advantages there are associated constraints, however, we choose to discuss these in the context of their related positive opportunities. We consider first, in Section Two, the current state of the Internet economy in Australia, which provides our current skill and knowledge base. Section Three then addresses the market for the various strands of e-business and Section Four considers technology, including both hardware and software that is coming online. This is followed in the

later sections of the paper by discussion of some resulting developments in B2B and B2C activities. B2C is further divided into activities, which require physical travel or transfer of goods, and those that are virtual. The final section of the paper describes the overall impact of these changes on communities in Australia.

1.2E-business and Transport

It would take a book, or perhaps an encyclopedia, rather than a paper, to fully assess all emerging trends in e-business. Thus we concentrate on those that have particular transport impacts. The special nature of transport means that we need to consider three types of impacts:

Indirect Impacts: Demand for transport is a derived demand arising from the need for personal travel or movement of goods from one place to another. Thus, growth in any areas of the economy can lead to increased transport demand. For example, increased goods or services production can increase call for deliveries, or general growth in the economy may lead to increased construction with more truck movements to building sites.

Inverse Impacts: Just as e-business growth may lead to general growth in the movement of goods and services, transport constraints could stifle e-business growth.

Direct Impacts: Like other businesses, transport organisations, from large multinationals to small local carriers, are effected by the e-business revolution in two ways. Generic applications available to business in general are used for purposes such as automating offices. At the same time industry specific applications such as automated vehicle tracking in transport, are being taken up. Similarly, businesses are impacted by these changes in two ways, internally, when they adopt them, and externally, when their suppliers or customers adopt them.

All growth in e-business can have some transport impacts and this causes a dilemma in setting the scope of consideration for this paper. We therefore aim to limit discussion to developments, which will have very large impacts on business in general, or have significant transport impacts. For example, there are many developments in four areas of e-commerce: web site design, product development, marketing and e-fulfilment. First, we concentrate on product development and marketing as it affects overall e-business take up. We then consider e-fulfilment, which is concerned with the logistics of physical delivery of goods sold via e-commerce, for its transport implications. We merely indicate growth in areas rather than discuss specific transport implications, as this is the task of the third Working Paper in this series. We also leave discussion of specific e-business transport applications, which some people in the

industry strongly believe extend to Intelligent Transport Systems [ITS], to Working Paper Three.

Before proceeding to our discussion of trends we note that we can offer only an overview rather than in-depth analysis of trends. Discussion is based on a literature review and document review of newspapers and reputable Internet sources. We note that the published academic literature [due to the delays between the timing of research and publications dates], needs to be augmented by information from sources that allow quicker or instant publication. However, newspaper reports can seldom offer in-depth analysis. Moreover, although this paper addresses a key change in the use of the Internet from publication of content to service provision, the WorldWide Web [WWW] provides a vast library of content. Rather than trawl through all sources for all trends, we have searched and followed up articles on trends of interest. Thus this work should be read in its context, as a paper to inform our future consideration of possible e-business impacts on transport rather than a study of e-business futures. Finally, it is impossible to report on e-business without some use of e-jargon. We provide a glossary to assist in interpretation and expect criticism for both too little and too much use of e-language, depending upon the views of the reader.

2E-BUSINESS READINESS

2.1Here and Now 1999 - 2000

The extent to which opportunities provided are taken up depends on the ability of industry and consumers to do so. This in turn depends on the current state of skills and knowledge and also on existing facilities. The rise of e-business is just one part of a global change to the information economy. The National Office of the Information Economy [NOIE] has been set up to monitor and report these trends. It is a particular concern of NTS that this work should not “reinvent the wheel”, but take into account available work from state and federal investigations. We thus direct readers to a recent NOIE report which reports a full assessment of the “The Current State of Play” in Australia[NOIE, 2000c]. However the rapid rise in take-up of e-technology means that any numbers are out of date almost as soon as they are produced, and even “The Current State of Play” is no longer current. Here we report the latest available Australian Bureau of Statistics [ABS] figures highlighting particularly relevant results at a national level.

Whether statistics are all drawn from a single report or augmented by data from several sources, care must be taken in comparing data across industry sectors or localities. Statistics may have been collected at slightly different dates. In most circumstances this does not matter but with

Internet take up it renders comparisons almost worthless. The numbers can instead be used as indicators of the lower bounds for usage and are thus valuable for setting predictions of future use in context. We have deliberately chosen to report on data trends in a later report so that our final reports are based on the most up to date data available.

Population and Households Online:By May 2000, 67% of Australian adults had accessed a computer, either at home, [47%], or in the workplace [43%] in the last year. Thirty-eight percent of adults accessed the Internet from other places, either through other people’s computers [22%], the library [14%] or educational institutions [11%]. [Source: ABS, 2000b]

Of the 46% of Australian adults who accessed the Internet from May 1999 to May 2000, 28% accessed the Internet from their homes and 21% from their workplace. Another 23% accessed the Internet from other places, such as other people’s homes [14%] educational institutions [7%] and at libraries [5%]. [Source: ABS, 2000b]

Many people are accessing the Internet for private purposes, such as shopping or browsing at work, as well as at home. There are also increasing opportunities for public access both at Internet cafes, or even terminals in shopping malls. Local government also provides public access to the Internet in libraries and community centres.

Businesses Online:At the end of June 1999 in Australia, 72% of employing businesses [excluding agricultural businesses] used computers. This is a significant increase from the 49% of businesses using computers in 1994. Thirty-seven percent of all businesses had Internet access.

Figure 1: Business Types with Computers and Internet Access - June 1999.

[Source: ABS, 2000a]

Access to the Internet at the end of June 1999 was highest in Electricity, Gas and Water supply [72%], Property and Business services [63%], Mining [56%], and, Finance and Insurance [56%]. Lower proportions of Internet access were recorded in the business sectors of Accommodation, Cafes and Restaurants [17%], and, Transport and Storage [19%]. [Source: ABS, 2000a]

Government Online:At the end of the financial year 1997-1998, 95% of Government organisations in Australia used computers with 73% having access to the Internet. With a further 15% of government organisations expressing the intention of obtaining Internet access in the next financial year, it was projected that 88% of government organisations would have Internet access by June 1999. Whereas some government organisations [37%] had web sites/home pages, a further 33% indicated they intend to obtain web sites/home pages in the next financial year. This adds to 70% of government organisations expected to have web sites/home pages by June 1999. [Source: ABS, 1999]

Government organisations use the Internet for a variety of activities, with a significant proportion of activity for e-mail [97%]. The Internet is highly utilised for receiving [45%] and lodging [28%] government forms and tenders, whilst other Internet activities include marketing and promotional activities [31%]. [Source: ABS, 1999]

2.2Users Online Internationally

In a global economy neither e-business nor its customers are limited by national boundaries. Therefore, it is important that international populations online are considered. Presently, global access to Internet services is increasing exponentially with over 378 million users online. Although this equates to only 6.2% of the world’s population this is a significant increase from the 201 million online [4.8%] in September 1999 and 147 million online [3.6%] in September 1998 [NUA, 2000b.

Figure 2: Monthly Increase in Global Internet Access.

[Source: NUA, 2000b, Oct, Nov 98, Jan, Oct, Nov and Dec 99, April and May 2000 calculated.]

From a global perspective, 22 countries have over 20% of their populations online. Australia has 40.5% of the population online, surpassed by Singapore [41.9%], the Netherlands [42.8%], Norway [49.6%], Sweden 50.7%], Iceland [52.1%] and the United States of America [53.7%] [NUA, 2000a].

Figure 3: Countries With More Than 20% of Population Online - September 2000.

[Source: NUA, 2000a]

2.3Up-skilling for the Future

There are three broad areas where skills and knowledge will be needed in step with e-business changes:

Information Technology Professionals: The need for information technology professionals is widely understood and acknowledged in all areas of the economy. Apart from numbers of industry reports pointing to this need, the size of situations vacant columns, both in newspapers and their electronic counterparts, provide ample evidence of demand for such skills. There have also been reports, for example, “The New Australian Learning System”, produced by professional organisations, including the Institution of Engineers Australia [Victoria] [IEAust, 2000], stressing the importance of lifelong learning systems to provide ongoing training to keep pace with rapid change.

Community Education: Numbers of initiatives are under way to prepare the community at large to cope with the information age. All State education department have had initiatives in place to ensure that literacy in information technology is added to the basic skill sets of all school leavers, see for example “Learning Technologies in Victorian Schools 1998-2001” [Education Victoria, 1998]. While this is helpful for the future, it is also necessary to address the skills of people who have left school before computer training was provided, or indeed before computers were even invented. Governments and private organisations are addressing this need. For example the Western Australian Premier announced in his speech at the 2000 Summer School opening:

“Our vision is that all Western Australians can join and benefit in the digital revolution by ensuring all homes are online regardless of their location or financial circumstances and we would like to achieve that within five years.” [Court, 2000]

This will include education throughout communities as a key plank in the program.

Management Skills: Addressing limits in understanding communication technologies by those making decisions in Australian business may be the most important, but least acknowledged area of the up-skilling necessary to take up opportunities from e-business. This is not related to the keyboard skills of individual managers but rather it pertains to their broader education in the opportunities and pitfalls of the new economy and those areas particularly relevant to their industries. It has been suggested that there are three levels of entry into e-business: first procurement, second Internet presence and third e-business-based strategies. With most businesses at level one or two, business skills to get to the final level will be needed [Teresko, 2000].

While some consultants may be available to provide advice, even to engage such people and to set their briefs requires understanding and knowledge. The concept of lifelong learning applies equally in this context. New courses are becoming available in management of IT, in e-business itself and most MBA programs offer IT and e-business strands.

Institutional Practices: E-business plans often depend on the financial institutions that support them and government regulation, ranging from permits to tax treatment. The assessment frameworks used by institution and government are usually those that served the old economy well, but may have problems accommodating the new. The need to trade across jurisdictional boundaries can cause problems as can the speed of change in technology. For example, vehicle fleet financing institutions may use actuarial data to establish the value of fitting safety devices to vehicles. Electronic back to base devices for reporting crashes do not have a “track record” for such assessment and before they can develop on the available technology, the technology will have again changed.

3MARKET CHANGES

We address market issues before discussing technology in view of the “sea change” in e-business from technology push to market pull. This has been described as the businessmen taking over from the “techs”. It has immediate implications for the up-take of technology for at least two reasons:

?Decision making about e-business has moved to higher up the echelons of power in companies; and

?There has been a change in emphasis from the technology the IT professionals want to build, to the IT people want to use.

At the same time, it has been argued that e-business changes the market emphasis from supplier push to customer pull, whether the customer status is that of another business or private individual. While some commentators consider that the e-marketplace is entirely new, we take the view that it is still useful to consider the likely success of e-business products using the traditional 4Ps of marketing: product, place, promotion and price [King, 2000]. We do so in line with our view that, while technologies may be completely new, they are introduced to markets that mix both old and new practices and sold to managers or consumers, who, likewise are all subjects of their own histories. Thus we group important market developments as related to products, both new e-business services and goods or services new to the electronic market place; place, e-business distribution systems and channels; promotion, target markets and

geographic regions concluding with discussion of price, including the pricing of telecommunications infrastructure and service.

3.1Products In and Of the Market

Bricks to Clicks: In the first phase of e-commerce, the new “https://www.360docs.net/doc/4d6752697.html,” online companies challenged the traditional ones. However, “the empires are now striking back” as established companies embrace the Internet moving from “bricks to clicks”. While almost all large companies have adopted some e-business practices, a new round of deeper adoption of full e-business strategies is beginning. Companies have decided to take on the new e-tailers who have been eroding their market share, and with the benefit of established capital, depth of management expertise and established networks, they intend to win.

A particularly relevant example here is the new General Motors e-GM unit to pull all GM’s electronic B2B, B2C, in-vehicle wireless and web-based service initiatives under a single chain of command that will extend to the top of the global organisation. GMs goal is to first offer its car models directly to thousands of customers worldwide via a single web transaction. The customer relationship would then be expanded to include wireless Internet services throughout the life of the car such as interactive navigation services [Gardner, 1999]. In taking up such a strategy GM, in common with other companies, needs to avoid losing existing supply channels. In GM’s case, independent dealers could move to other car suppliers.

Apart from the big influence large companies entering the market will have on B2B transactions along supply chains, they also bring extra confidence for clients not comfortable with the idea of online shopping. Brand name equates with customer trust. There is far less concern in providing credit card details to a known large company with a visible presence, such as Woolworths or Coles, compared to an unknown company somewhere in virtual space.

E-commerce development is now turning full circle, as a growing number of https://www.360docs.net/doc/4d6752697.html, companies are opening physical stores to sell their products moving from “Clicks to Bricks”. For example, the Personal Computer [PC] company Gateway, which previously sold direct to consumers by Internet or phone, has opened nearly 200 stores across the USA [Sandoval, 1999]. It is worth noting that the same excellent supply chain management which allow the customer to track the ordered PC from factory to delivery also applies in the new setting.

“Middleman” Services: Initially, numbers of commentators, for example Benjamin and Wigand [1995], saw the Internet as providing opportunities for direct communication between suppliers and customers, saving transaction costs for companies by elimination of “middlemen”.

Experience has shown, however, that while some kinds of intermediaries were cut out, the Internet provides new opportunities for middlemen. New types of roles include electronic data-brokers collection, aggregation then dissemination of data to customers [Sarkar et al., 1996]. New interpretations of old roles, include packaging and on-selling of market research, and particularly sourcing of goods or services by agents on behalf of customers.

New Intermediaries for Tradition Services: While agents have existed as long as markets, the Internet makes it possible for agents to link more suppliers to more customers at lower prices, making the service more affordable and thus available to many more people. They are particularly welcomed by “time poor” companies and individuals. It has been suggested that electronic intermediaries may change traditional linear supply chains [Vandermerwe, 1999].

[Source: after Vandermerwe 1999]

Intermediaries to Service Web Needs: While some intermediaries carry out existing tasks in new ways, others provide services needed specifically by web-based businesses. For example, ANZ operates and manages an online financial gateway to manage secure Internet transactions [ANZ, 2000a]. ANZ eGate provides online multi-payment solutions through integration with non-Internet commerce systems, such as Interactive Voice Response [IVR], or Mail Order Telephone Order [MOTO]. This type of intermediary provides both security and extended services.

Other intermediaries exist purely to offer secure connections. For example, trusted services, such as certification authorities and registration authorities, are of particular relevance to the Internet. Kueter and Fisher [1999] discuss business models for trusted services based on the BESTS – Business Environment Study of Trusted Services, carried out in 1988 for the European Commission.

3.2Place: Electronic and Physical Channels

Portals: Portals can be viewed as the electronic equivalent of a traditional physical market place. Thus, there seems little doubt that portals will be an integral part of the e-commerce in the future and their overall influence is likely to increase. Currently, portals serve two broad types of market in two different manners:

Industry Portals have been set up predominantly for procurement analogous to wholesaler market places. Vertical Portals are set up to focus on particular industries. For example, GlobalNetXchange is where the retail giants Carrefour, Sears, Kroger Sainbury, Metro and Coles deal with 70,000 suppliers, partners and distributors worldwide [Oracle Corp, 2000].

Horizontal Portals in contrast harness the collective buying power of a few big companies to obtain bargain pricing on a variety of purchases, such as office supplies, not necessarily integral to the final products of the company. High volume, low value items of that kind consume a lot of money in large companies. The first significant horizontal portal initiative in Australia was https://www.360docs.net/doc/4d6752697.html,ony set up by PricewaterhouseCooper [PwC, 2000b]. The final category of industry portal, less relevant in Australia, is the single company owned portal for procurement by very large companies with branches widely spread geographically, for example, Wal-Mart RetailLink in the USA [Cuneo, 2000].

Figure 5: Sears Carrefour GlobalNetXchange.

[Source: Oracle Corp, 2000]

Consumer Portals provide access to the general public to a range of goods and entertainment, an extension of a community market or a shopping mall or, alternately, they concentrate on access to a narrower range of services.

All market places need to consider specialisation versus diversification and optimum size. However, these questions are much more significant for electronic portals without physical constraints to limit size. This is particularly relevant for consumer portals where the portal supplier derives profits from a variety of sources including advertising on the site. The portals which survive in the future will be those which manage size and degree of specialisation. For example, the Walt Disney Internet has just relaunched a revamped https://www.360docs.net/doc/4d6752697.html, portal with a focus on leisure content rather than general news and entertainment [Tourtellotte, 2000].

There is further discussion of portal related issues in later discussion of specific B2B and B2C applications.

E-fulfilment : E-fulfilment is the unique process of providing physical products for e-commerce customers which includes activities such as telemarketing operations, customer service, warehousing and shipping, procurement and inventory management, processing and disposition of returns. While other electronic commerce strategies, such as product development and web site design, attract more media attention, e-fulfilment is one of the key determinants of e-commerce success or failure, since the majority of e-commerce businesses sell physical products. See for example, Swarzt [2000].

Fulfilment of customer orders is not a new concept, yet while it is too early to define a “right” way of e-fulfilment, there is a general agreement that just adding an electronic ordering system to an existing supply and distribution system is the wrong way. Companies setting up or moving into e-commerce have a series of opportunities for new practices. These include establishment of purpose built distribution centres, shipping to affiliates, and delivery, for out-sourcing e-fulfilment.

You’ve Got E-mail: No discussion of e-business communication channels would be complete without the some discussion of the communications tool used by almost all businesses and for that matter consumers connected to the Internet. An IDC study has found the number of e-mails sent on an average day is expected to hit 10 billion worldwide this year and they predict that the figure will triple to 35 billion in 2005 [The Australian, 2000a]. In this context, software to provide automated systems access, scanning, routing and storage to handle this deluge of

communications will definitely be needed. Reassessment of appropriate uses of e-mail both within and between businesses may also be appropriate.

3.3Promotion Australia All Over

Regional Markets: Improved telecommunications are widely cited as being a way of overcoming rural and regional disadvantage. Programs to use the Internet to overcome the tyranny of distance are being implemented by governments across Australia, for example, “WA Online” [WA, 2000]. The intention is to both provide better quality of life and particularly assist regional businesses. As the advantage is derived specifically from improved access to wider markets, in our context we need to consider where such promotion will have particular advantages, which will in turn have implications for transport.

Strategies.

[Source: Adapted from WA, 2000]

International Markets: Austrade is delivering a series of 240 e-commerce workshops across Australia, as part of an e-commerce exports initiative. The workshops cover both the strategic and practical aspects of e-commerce for exporters and draw on Austrade’s information base and professional expertise. Ros Mitchelson from the Austrade Commission for North Queensland stated:

“E-commerce … presents great opportunities for local exporters, both large and small and irrespective of location to increase exports and generate jobs” [NOIE, 2000b].

Other government authorities and industry groups share this opinion and are offering both sessions on e-commerce, as part of meetings and conferences together with specific purpose seminars on the subject, for example, the Australian Food and Grocery Council [AFGC, 2000].

As similar initiatives are taking place across the globe, the threats, as well as the opportunities, from a wider market place will need to be considered.

Prices, Costs, Security and Regulations: While numbers of commentators emphasise the potential for e-business to cuts cost, it is clear that not all e-business services are cheaper than their conventional alternatives. Both the actual amount saved and its impact on the final price will differ from business to business.

Figure 7: Cost Structures in Vendor to Customer Transactions.

Figure 7 shows the cost structures which determine the final price of services. There are also additional costs that need to be factored into the price.

Security for Business and Clients: Organisations need to include within their e-business strategy processes for ensuring the confidentiality, integrity and availability of their data. These are key issues in general consideration of e-trends. As expected the rises in e-business is accompanied by a rise in e-crime. Increased value in business information in a knowledge economy increases incentive for theft and electronic access makes theft easier. Apart from theft, e-business systems are also vulnerable to sabotage of data and systems by people both inside and outside the firm. The speed and reach of the Internet, together with increasing automation of systems, makes these systems throughout the world vulnerable. In May 2000, the virus “I love you” infected the world via e-mail and is estimated to have cost industry and government upward of $US10 billion dollars [https://www.360docs.net/doc/4d6752697.html,, 2000].

As our study deals with the rise in e-business and its subsequent transport impacts, we view security issues in terms of adding to costs or setting barriers to market entry. For further

discussion of security issues and strategies we direct readers to some of the many reports on the subject for example, [NOIE, 2000d, KPMG 2000a].

Barriers to entry include:

?Concerns about outsiders accessing company data for theft or damage;

?Concerns about client privacy;

?Concerns about security risks from third party service providers and potential partners; and ?Fears about loss of consumer confidence from negative publicity about e-business security.

Cyber defence architecture, or in layman’s terms, systems to guard against such fears, all come at a cost. Some of these costs are IT related but other are issues of due diligence in assessing firms and individuals with access to systems. At the same time, systems recovery in case of breach also adds to costs. There are problems in recovering those costs via legal systems. The law lags behind e-technology and the criminal, even if identified, could be on the other side of the world.

Australia’s standards agencies are now putting in place electronic security standards to allay fears of businesses entering the new economy. Together with New Zealand protocol agencies, they are finalising a system for accrediting companies who meet Internet security standards. Standards and accreditation procedures will govern certification, security of information for companies and individuals and risk management. The federal government will be among the first large organisations to promote the standards as mandatory part of doing business [Zampetakis, 2000].

Safety for Households: Households considering Internet use, are faced with a different set of Internet security issues. All can have legitimate fears about invasion of privacy and possibility of strangers accessing both their person details including home address. These concerns can be particularly acute for households with children who may also have the additional concern about access to unsuitable material.

In August 2000, the federal government launched Net Alert, an advisory service with a toll free number and information web site, to help families manage Internet content access with greater certainty. The site provides information on a range of issues including safe surfing, use of filters to screen out unwanted sites, and how to protect children from online “stranger danger” [DCITA, 2000].

Senator Alston at the Net Alert Launch stated:

“While there are some dangers in surfing the net, they should not outweigh the positives and prevent Australians embracing a medium with enormous potential to inform, educate and bring people together.” [DCITA, 2000]

4TECHNOLOGY TRENDS

The range of software and hardware initiatives likely to impact business in ways that will then impact transport is wide. They may be grouped into four broad categories as predominantly: providing standardisation; making use easier or cheaper; improving security; offering completely new type of services. We use the term predominantly, as clearly many initiatives fall in multiple categories. For example, most standardisation initiatives make use cheaper. We discuss the implications of these categories using example developments in each case.

4.1Standardisation

Standards such as the Universal Description, Discovery and Integration [UDDI] will address interoperability. The standard creates a platform-independent, open framework for describing services, discovering businesses, and integrating business services using the Internet [https://www.360docs.net/doc/4d6752697.html,., 2000a]. It is worth noting that standardisation initiatives will need time to take effect. In the short-term, lack of standardisation, whether between companies or between countries, will continue to be a problem.

?UDDI is the first cross-industry effort driven by platform and software providers, marketplace operators

?As e-business leaders, these technology and business pioneers are acting as the initial catalysts to quickly develop the UDDI standard.

?The UDDI standard takes advantage of WorldWide Web Consortium [W3C] and Internet Engineering Task Force [IETF] standards such as Extensible Markup Languare [XML], and HTTP and Domain Name System [DNS] protocols.

?Businesses of all sizes can benefit from UDDI, because the standard comprehensively addresses problems that limit the growth and synergies of B2B commerce and Web services.

?The long list of organizations participating in the UDDI project represents many industries and core competencies. As such, UDDI is not owned or led by any one company.

?In time, the UDDI project will be turned over to a standards organization with the continued commitment of the cross-industry design teams that initiated UDDI.

Figure 8: UDDI.

[Source: https://www.360docs.net/doc/4d6752697.html,., 2000a]