It's no secret that the electronic revolution has transformed the business world. We've gone from cash and checks to electronic fund transfers; from paper-based invoices and purchase orders to electronic data interchange; and from letters and memos to E-mail.
"We are moving from the mass-market economy of the Industrial Age to the digital economy of the Information Age," said Jack Shaw, founder of Electronic Commerce Strategies [now called eCommerce Strategies-editor's note], in a seminar with PP&L, Inc. employees.
The most successful corporations in the Information Age will be those companies that embrace three important dimensions of management, said Shaw:
To pull that off, corporations must digitally transform their business processes, says Shaw. Businesses need to take advantage of paperless information technologies to change. They won't survive without eCommerce.
Electronic Commerce or eCommerce for short, is the digital transformation of those parts of your business processes that cross trading partner boundaries. Trading partners may be your customers, banks, suppliers or any other outside organization with which you exchange information on a routine basis in order to conduct business. The results are cost savings, improved quality and faster response.
Shaw, a pioneer in the business use of information technology, was invited to PP&L, Inc. to brief the company's Corporate Leadership Council and about 160 employees on this latest information technology. Joe Zelechoski, Procurement director, first heard Shaw at last year's Utility Purchasing Management Group conference in Kansas City. He was so impressed that he invited Shaw to PP&L, Inc. to speak.
Frank Long, PP&L, Inc. executive vice president and chief operating officer, set the stage for Shaw's January 25 presentation. "PP&L, Inc. believes this technology is critical to our future. This is the way world-class companies operate. If we are to succeed, we have to be ready, " he told employees. "As we go forward in the energy business, our margins will be smaller. We will need all the cost efficiencies we can come up with to maintain those margins. We are in a business where over the next five years, we cannot increase the cost of our delivery services. We have to absorb costs. One of the ways to reduce costs and to be more effective is to use technology like eCommerce."
eCommerce makes use of electronic technologies including electronic data interchange (EDI) – the flow of information between organizations without human intervention – bar coding, E-mail, the Internet and the World Wide Web. By eliminating human intervention, the computer does the work, freeing up employee resources to do what computers cannot – using creativity and judgment to solve problems and improve business processes.
For PP&L, Inc. this new technology will create more opportunities and efficiencies in supply chain management – the purchasing process starting with the identification of a need for material or services through the payment to the vendor or the supplier for the delivered product. It also will be beneficial in other areas of business like employee benefits and for marketing initiatives by PP&L EnergyPlus.
One of PP&L Inc.'s Financial Department goals for 1999 is to establish an eCommerce strategic plan for supply chain management. A team will be chartered next month to begin the project.
Shaw stressed that successful companies must be proactive. Companies need to begin now to lay the groundwork for changes in businesses processes to compete. Once an electronic commerce strategy is developed, a long-term implementation plan and a short-term action plan are put into place.
"You must step back and look at the business as a whole," Shaw states in his book, Electronic Commerce for Executives.
"Examine what digital transformation policies and procedures you need to have in place and how you're going to evolve your core technological capabilities. By the time you reach the end of the transformation process, you want to have transformed the business as a whole to be functional in a digital economy. This is not the end of the journey, because the business transformation process must continue indefinitely.
"All it takes is a willingness to change and the courage to begin," Shaw says.