STRATEGIC MARKET PERSPECTIVE Using the Internet for Business Operations Internet Opportunities Progr; Digitized by the Internet Arcliive 2015 in https ://arch ve org/detai Is/usi ng nternetforu i . i FEBRUARY 1996 USING THE INTERNET FOR OPERATIONS BUSINESS INPUT Frankfurt • London • New York • Paris • San Francisco • Tokyo • Washington D.C. INPUT About INPUT i Clients make informed decisions more quickly and economically by using INPUT'Sservices. Since 1974, information technology (IT) users and vendors throughout the world have relied on INPUT for data, research,objectiveanalysisandinsightfulopinionstopreparetheirplans, marketassessmentsandbusiness directions, particularly in computersoftware and services. ContactustodaytolearnhowyourcompanycanuseINPUT'Sknowledgeandexperiencetogrowandprofit in the revolutionary ITworld of the approaching millennium. 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(415) 961-3300, Fax (415) 961-3966 Tokyo • 6F#B, Mitoshiro BIdg., 1-12-12, Uchikanda Chiyoda-ku, Tokyo 101, Japan, Tel. +81 3 3219-5441, Fax +81 3 3219-5443 Washington, D.C. 1921 Gallows Road, Suite 250, Vienna, VA 22182, USA, Tel. (703) 847-6870, Fax (703) 847-6872 USINGTHE INTERNET FOR BUSINESS OPERATIONS INPUT Abstract This report identifies the ways in which the Internet is being used to support business functions. It provides benefits, challenges, and future directions that the Internet can bring to businesses processes. This report is based on a subset ofdata from a primary research project involving over 200 telephone interviews conducted with leading North American companies across a number ofindustries. The report contains 51 pages and 17 exhibits. ©1996byINPUT.ReproductionProhibited. USING THE INTERNETFOR BUSINESS OPERATIONS INPUT Published by INPUT 1881 Landings Drive Mountain View, CA 94043-0848 United States of America Internet Opportunities Program Using the Internet for Business Operations © Copyright 1996 by INPUT. All rights reserved. Printed in the United States of America. No part ofthe publication nnay be reproduced or distributed in any fornn, or by any means, or stored in a database or retrieval system, without the prior written permission ofthe publisher. The information provided in this report shall be used only by the employees of and within the current corporate structure of INPUT'S clients, and will not be disclosed to any other organization or person including parent, subsidiary, or affiliated organization without prior written consent of INPUT. INPUT exercises its best efforts in preparation of the information provided in this report and believes the information contained herein to be accurate. However, INPUT shall have no liability for any loss or expense that may result from incompleteness or inaccuracy ofthe Information provided. INCA*766- 1996 USING THE INTERNETFOR BUSINESS OPERATIONS INPUT Table of Contents I Introduction 1 A. Background and Objectives 1 B. Scope 1 C. Methodology 2 D. Report Organization 3 E. Related INPUT Reports 4 II Executive Overview 5 A. Early Adopters Are Racing Up the Experience Curve 5 B. Experience Brings Value 6 C. Internal Webs Are Driving Business Processes 7 D. The Web Challenges Notes 8 E. Staffing Uncertainty Opens Door to Services Providers 9 III Current and Future Use of the Internet to Support Business Processes 11 A. Current Internet Status 11 B. Current, Developing and Future Internet Projects 13 Experienced Internet Users 13 1. 2. Less Experienced Internet Users 15 C. Internet Service Usage 15 D. Importance ofInternet Benefits to Business Processes 16 1. Importance ofBenefits by Organization's Stage ofInternet Development 17 a. Organizations Gathering Data 18 b. Organizations Seriously Considering a Presence 19 Organizations Developing a Presence 19 c. d. Organizations With an Active Presence 20 INCA ©1996byINPUT.ReproductionProhibited. I USING THE INTERNETFOR BUSINES OPERATIONS INPUT 2. Importance ofBenefits by Category ofPotential Benefit 20 a. Accelerating Business Processes 21 b. Speeding Information Flow 21 Ensuring Management Control 21 c. d. Obtaining Scarce Knowledge 22 e. Improving Quality 22 3. Importance ofBenefits by Industry Sector 22 E. Future Internet Usage, Staffing and Expenditure 24 1. Importance ofthe Internet by 2000 24 2. Planned Usage in 1997 and 2000 25 3. Current and Planned Internet Staffing 26 4. Current and Planned Internet Expenditure 26 IV Issues and Concerns Facing Internet Users 29 A. Barriers to Internet Success 29 B. Security 30 1. Physical Security 31 2. Network Access 31 3. Education 31 4. Encryption 31 C. Ease ofUse 32 D. Bandwidth 33 E. Internet Services 34 F. Web Development Tools 34 G. Payment Systems and Image Resolution 35 H. Areas ofParticular Concern 36 V Real-World Internet Use for Business Processes 37 A. Company A 37 B. Company B 41 VI Conclusions and Recommendations 45 A. Conclusions 45 1. Commercial Internet Use Still Focuses on Sales and Marketing 45 2. Internal Webs Are the Model for Business Processes 46 3. Internet Use Is Widespread Among Large Companies 46 4. Internet Experience Changes Perceptions 47 ii ©1996byINPUT.ReproductionProhibited. INCA USING THE INTERNET FOR BUSINESSOPERATIONS INPUT 5. Users Look to the Internet to Do What It Does Best 47 6. Different Industries Will Gain in Different Ways 47 7. Staffing Resource Patterns Have Not Been Established 48 8. Bandwidth and Security Are the Major Concerns 48 9. Internet Clients Must Match Existing Clients in Ease ofUse 48 B. Recommendations for Business Internet Users 49 Gain Experience Now and Reap the Rewards 49 1. 2. Avoid Letting the Implementation Phase Cloud the Issues 49 3. The Internet Is Congested: Take Steps to Maximize Performance 49 C. Recommendations for Internet Service and Product Vendors 50 1. Address the Growth ofInternal Webs 50 2. Internet Training 50 3. Staffing Uncertainty Opens the Door for Consultants and Outsourcing Organizations 50 4. Increase Bandwidth to Increase Internet Penetration 51 A Glossary A-1 B Report Questionnaire B-1 INCA ©1996byINPUT.ReproductionProhibited. USINGTHE INTERNET FOR BUSINES OPERATIONS INPUT (BLANK) iv ©1996byINPUT.ReproductionProhibited. INCA