INTERVIEW:
Question 1
What is electronic commerce and why is Andersen Consulting betting on it?
Answer
We believe electronic commerce is a point of view, a way of looking at business
that is quite different from what weíve seen in the past. It is a way of connecting the
business to its customers, connecting the business to its suppliers. In the case of
pharmaceuticals, connecting the business to its regulators. It allows relationships to be
much more close, much more involved, more intense.
Question 2
What are the benefits and the risks of electronic commerce?
Answer
The benefits of electronic commerce are probably manifold. One is that the business can
run more efficiently internally, which saves costs. The availability of more information
and a closer relationship means more value to the consumer, or more value to the customer,
if it is business-to-business. There are risks involved in e-commerce: there are still
concerns today about security, although again the technologies exist to close those risks.
It is question of agreeing and standardising those. And this seems to be well underway.
Question 3
You say that consumers will have the choice between privacy and benefit and
convenience. What does this mean?
Answer
Today, if you were a very private person, and you were very concerned, you
probably would never use a credit card or any card of any kind, because then someone has a
list of everything you have bought. So if you were very concerned about privacy today,
would probably only use cash, but there is not a lot of convenience in this. So today
people choose to use instruments that could surrender their privacy and they do so for
convenience. Ultimately, the choice is theirs, and ultimately they still depend on the
government and laws to protect them.
Question 4
But the real risk is that people will be tracked in every moment of their life through the
Net in every action that they do. How is it possible to protect them?
Answer
It is true that the more you rely on the network, the more you could be tracked. There are
some technology ìfixesî that would allow you to appear as a multiple of different people
on the network. Each one of them would have verifiably good credit, but it would be very
difficult to know that you were the same person here who was there. This is possible. I
donít think this is a likely scenario. Instead, we will rely on good laws and good
security. We need to deal with this, because the genie has come out of the bottle. You
canít ìuninventî this, you canít make it go away. We really do need to make sure that
citizens are protected, because this is going to happen.
Question 5
What have you personally bought on the Net?
Answer
I have purchased a computer, a number of books and music CDs. Those will turn up in the
statistics for retail trade on the network. What will not turn up is that Iíve used the
network to research many other products, to learn about the products, to learn about the
alternatives, so that when I went to buy through some other channel, I was much more
knowledgeable, I knew exactly what I wanted and where the best deal was. This is very
difficult to track in terms of benefit of electronic commerce but it is a very strong use
of the network today.
Question 6
And another strong user of the network today is the virtual representation of every
business. Can you explain how the Net is replacing the old reality?
Answer
I would say that the network doesnít replace the old reality, it augments it. For
instance, thereís the Levi application, where you can be measured in a store, and then
they can make a custom pair of jeans just for your measurements. They have a virtual
representation of you in the system, and you get a physical product from them. So It is
both: they added the virtual representation of you to the real representation of you so
that they can serve you in a way that you could not have been served before, with a much
more customised one-to-one product.
Question 7
But there is also a new way to organise companies, virtual banking for example. Can you
give us an example of this?
Answer
Virtual banking and direct banking allow you to have banking services without the cost of
a branch bank. A recent example we participated in was creating Advanced Bank in Germany.
Each branch, if they built physical branches, would cost around US$2 million to build,
another ten or twenty employees for every branch they added. Instead you have a telephone
or the Internet and you build a call centre once, and you could support thousands of new
customers without the bricks. You could support them with experts, whereas if you had to
populate two hundred branches with people, each one would be good but not necessarily an
expert in the field of financial investments, mortgages. But with a virtual bank, if I
have a very complex question, I can ensure that it goes to the right expert to handle it.
Question 8
To give another example in which Andersen Consulting participates, what is the situation
with business-to-business?
Answer
Well, we have a number of business-to-business experiences. One that we did not
participate in, but which is a very interesting case, was collaborative forecasting and
replenishment. This is the case where two businesses agree to share data that they have
not necessarily shared before. In this particular case the manufacturer of a mouthwash
collaborated with a major retailer. Each forecaster used to make their own forecast, try
the best they could, but if they missed, it could be very expensive. If I make too much
product, then I have inventory costs because it sits around. If I donít buy enough
products, it runs out and the customers get mad and leave my store. So the risks are high
when making the wrong forecast. Using these technologies, associated with electronic
commerce, the two forecasters share their assumptions, share what knowledge they have been
able to glean from the marketplace, and together come up with a forecast that is more
accurate and both sides, the buyer and the seller of the product, end up benefiting from
that. Weíre going to see more and more of this sharing of data that used to be kept
inside the enterprise through these technologies and techniques.
Question 9
Does Andersen Consulting also research or help the public administration in the
organisation of work?
Answer
When we talk about electronic commerce sometimes we think about it only in terms of
business. But in fact the same technologies are being used to reinvent government in many
ways. In government services, services to the citizen, if you replace ìcustomerî and
ìbuyerî with ìcitizenî, again you have an opportunity to serve the citizen in ways
that are much more powerful than in the past. The way government has evolved many
different agencies serve the same citizen. Sometimes around the same subject. One example
is that of a welfare client. A welfare client needs to know about their benefits, they
need to know about job training opportunities, they need to know about job openings, they
need to know if they got a job or went to training who would take care other children.
These are in so many places - different agencies, different companies, different places -
that It is very complicated and when people get out of work It is even more complicated.
Question 10
There is a case in Cambridge, isn't there?
Answer
Yes. In twenty different organisations in the Cambridge area in the UK some government,
some private enterprise, some volunteer organisations pooled their thoughts on how best to
help somebody who was coming off welfare and trying to get back to work. They built a web
site that would combine all this information to make it easy for a welfare client to be
able to answer all of these questions. We then made this web site available on public
kiosks that you could put in libraries, in government buildings, in some private
enterprises, so that they wouldnít have to have their own Internet access. They could go
to the public kiosk and they could find their potential work, their benefits, and the
system allowed them to make notes that the system would keep for them so they could keep
track of where they were in trying to find work or which of the child care organisations
looked best for them. The early results are anecdotal but there have been some very good
cases where people have been successful in getting back to work much faster using these
techniques.
Question 11
Don't you think that for people it will be rather boring, because shopping is also a
special experience. How will it be possible to retain this experience on the Net or in
cyberspace?
Answer
Shopping is very much a social experience, and some people will still want to go to a
physical mall to get that shopping experience. But you can also add that sharing, that
meeting of other people, by using the network. I donít know about Europe but in the
United States, if you look at teenagers in the evening after school, instead of watching
television, now sometimes theyíre using the network to socialise with each other. And
they can meet people they know in their neighbourhood and other people. Now, take that
idea, and add shopping to it. You could go together to a virtual place, add entertainment
to it - because you can make some of these sites very entertaining, the way you might find
entertainment in a mall - then add to it all the information you can give them and you
might have a very positive shopping experience that is still social but is also virtual.
So these are experiments that are being conducted. It is too early to tell exactly how
people will respond, but it is possible.
Question 12
What about advertising? Will there be new ways to use a virtual channel for advertising?
Answer
There have been quite a few studies as to whether advertising on the Internet has been
successful or not. I think that some of these studies are holding the Net to a higher
standard than, for instance, traditional advertising. In traditional advertising they
conduct studies after the fact to see if you got an impression or if you saw it. On the
Net theyíre asking harder questions: Did you see, did you buy? Well that is not a fair
comparison. The benefit of advertising on the Net is you can tell what there was about it
that interested the viewer. So they see something and they click it. OK, that is an
impression. And if they click again and again, they go deeper and deeper; now you have a
lot more information about what exactly about this product or advertisement they were
interested in. There is, I think, a fair amount of revenue being driven off capturing
eyeballs. The model is still evolving but I think it eventually will be successful.
Question 13
Do you believe in push technology?
Answer
I believe in push technology to create pull. Let me explain. I donít believe in push
technology if I didnít ask for it. Because it makes me crazy. It is like my mail box at
home filled with stuff I didnít ask for. But if it if I say Iím interested in this,
please tell me if something changes, and they tell me briefly, this is good, because
otherwise I might not know. One of my favourite examples is I bought a book on Amazon.com.
They said: If new books are published on this subject, would you like us to tell you? I
said yes. Normally, they say: If we have a special or if we have any information on any of
our products... I say" no, I donít want that mail. But on that one subject, yes. Six
months later I got a very short message saying: Brand new book coming out in two months,
this is the author, this is the subject. This was exactly on the subject I was interested
in. This a service to me, It is not an annoyance. I think push can be very powerful in
this way of making a market for something sooner than it would have if I had just waited
to find the book or maybe never found the book. This is a very powerful idea.
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