Internet – Facts and Forecasts
Facts and Forecasts
Corporations may like to think they are part of a value chain, but in reality they are linked in a value web where collaboration with other companies—even competitors—is crucial to success. As a result, the corporate model of the 20th century—essentially hierarchical and isolated—is disintegrating. The 21st century enterprise is one embedded in a complex system of networks.
U.S. Internet traffic has been increasing exponentially. In fact, from 1997 to 2000 it increased at 280 % per year. According to Larry Roberts, one of the founders of the ARPANET, it has been increasing at 400 % per year since then has been increasing exponentially. In fact, from 1997 to 2000 it increased at 280 % per year. According to Larry Roberts, one of the founders of the ARPANET, it has been increasing at 400 % per year since then
Value is no longer driven by how scarce a product, service or idea is, but rather by how many people can access it, observes Joe Forehand, CEO of Accenture, a leading global management consulting and technology services organization. The Internet is propelling enterprises toward a new open environment where success is achieved through alliances with partners, direct contact with customers and collaboration with competitors.
Over the next four years, worldwide e-commerce is expected to sextuple to almost 13 trillion $—representing nearly one-fifth of total sales worldwide
"New technology and the growing importance of intangible assets are pushing companies toward new levels of collaboration, joint ventures, alliances, outsourcing and consolidation," Forehand notes. "There is a new recognition that businesses are embedded in a complex system of networks. Many of these networks are underpinned by radical developments in information and communication technologies, though the implications of these changes for the corporation go well beyond the technological." Indeed, collaboration across networks is not only a must; it is also a key lever in increasing shareholder value. Accenture research shows that between 1997 and 2000, the typical large company formed 177 alliances. It also found that about one-quarter of corporations expect alliances to account for more than 40 % of their market value by 2004.
New Economy Versus Now Economy. Effective collaboration requires companies within the value web to be able to interact and exchange enormous amounts of data. "Be it the integration of acquisitions or supply chain process integration with customers in areas such as demand forecasting, collaboration translates into dollars," notes Caspar Herzberg, Accenture Senior Consultant for Supply Chain Management.
Wireless or wired Internet? According to the number of connections, wireless is the clear favorite
A recent study by the Massachusetts Institute of Technology (MIT) has found that good customer-supplier collaboration and making relevant information available via the Internet offers savings of between 40 to 70 % in inventory costs for the total supply chain. What's more, experts expect that over the coming decade the Internet will enable dynamic and rich real-time collaboration between businesses. Forrester Research CEO George Colony foresees an X-Internet characterized by scores of new technologies.
This next-generation Internet will allow users to get real-time interactive experiences via the Web through disposable code—programs they use once and throw away. "The X-Internet will allow business to deliver an experience that is far more interactive, immersive and connected. The experience will be far more enjoyable—and translate into a richer and more profitable form of online commerce," Colony predicts.
Moreover, the X-Internet will also make use of low-cost embedded microprocessors and sensors to revolutionize commerce and allow an increasing number of business processes to take place without human intervention. "The scope of B2B interactions today is restricted to people and IT systems.
But the extended X-Internet will allow companies to interface with their own—and their partners'—supply network assets," says Colony. In essence, what this boils down to is two-way communication with objects.
Forrester Research sees a gap between the number of today's Internet users and the far greater number of potentially networkable chips—a gap the X-Internet could bridge
With this increasingly likely scenario in mind, the Auto-ID Center, an industry-funded research program based at MIT, and the Institute for Manufacturing in Cambridge, England, are working with over 50 blue-chip sponsors to design, build, test and deploy the global infrastructure that will allow computers and objects to interact instantly. Says Colony, "The X-Internet will be far more pervasive than today's Internet. Eventually, it will be as much a part of the environment as the air we breathe and the water we drink."
Peggy Salz