Day 2 - Forrester Forum - 2/9/99

From: <richard_at_tenagra.com>
Date: Wed, 10 Feb 1999 21:33:42 -0600 (CST)

Below is a special mailing to The Online Advertising
Discussion List about the Forrester Forum, written by
Ann Handley, editor-in-chief of The ClickZ Network. You will
receive these reports in addition to your normal Online Ads
 posts/digests.

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Forrester Forum: Day 2
Preparing for Dynamic Trade in an Internet Economy

Ann Handley
Editor in Chief
The ClickZ Network
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After a day Monday of buzzword bingo and Dilbert-speak, it
was refreshing indeed yesterday to hear some straight talk
from the podium.

True, there was plenty of talk of "federated integration
infrastructure," "business impact processes," and "message
hub architecture." And please... what the hell is
"middleware"? But it was balanced with a healthy dose of
plain-speak from those who are at least a little closer to
the trenches.

(Or can it be... I'm actually beginning to understand these
people?! Now that's scary....)

Keep in mind: this particular Forrester event drew
representatives from primarily large, global organizations,
which are only beginning to wake and walk groggily into the
Internet space. For the most part, they haven't a clue how
to access the information superhighway without being
flattened by those speeding past. In some cases, they
work under CEOs and other top-level managers who are still
driving with buggy whips.

Some of these companies in attendance do have web sites. But
they are little more than brochure-ware sites with limited
web presences; they certainly aren't fully embracing all the
economies and efficiencies that the web can offer. They came
to learn exactly how to do that.

Several speakers Monday recommended that the best way to
succeed in the Internet space (and embrace what Forrester
calls "dynamic trade")is to create infrastructure and staff
positions to manage it. Hire information technology VPs and
technology-savvy marketing VPs. Create whole new departments
that truly understand what it takes to succeed online and
can convince top management of the imperative to be there.

Tuesday, the recurring response was... get real. The vision
for the doing business online has to come from the CEO, not
the VP of IT. Setting up teams to co-manage the online
component of a business will be cumbersome and unwieldy. And
if your CEO really isn't an innovator... online is going to
be a hard sell. Period.

Many CEOs "are custodians of existing business models," said
Bernard ewitt, who heads up Internet trading for RS
Components (http://rswww.com) "You are coming as an element
of change."

Without a single clarity of vision from a single manager in
charge, "it will be like two tomcats in a bag," said Colum
Joyce of DHL International N.V. (http://www.dhl.com) What's
needed to direct a company's online efforts is a sort of
"hybrid" manager who simply "gets it"

"And when you find that person, pay them 50 percent more...
and keep them in your organization," Joyce said.

Dell Computer's (http://www.dell)top guy, Michael Dell, was
held up as the prototype CEO who truly gets the vision.
Having built a highly successful web commerce business (to
the tune of $10 million a day in revenue), Dell is now
looking to expand in a big way globally, said SVP Paul Bell.
With web sites in 42 countries and in 21 languages, Dell is
looking to position itself internationally as it has in the
US: as the top-seller in its market.

"Our new and current challenge is going from a US model to a
global company, and figuring out what that means," said
Bell.

The driving force behind Dell's enormous success is, in
fact, Michael Dell. "Internet strategy needs to be driven
from the top. It does not bubble up from the bottom," Bell
said, adding, "It's a lot easier to be an innovator when you
understand the technology."

Lacking a visionary leader is a real handicap, Bell and
others said, because it takes a certain amount of courage to
forge ahead in an arena where the right paths are sometimes
dictated only by the mistakes you've made. At Dell, for
example, "this has been a process of trial and error for all
of us. We've made some mistakes and are trying to learn from
them," Bell said.

"All of us live in a world where none of us know what
innovations we are working on are actually going to hit,"
said Bell.

So what's a manager pushing for change at one of these
multinational behemoths to do? Said Bernard Hewitt, "Give
them the scenario of what it could be in the future. Take a
scenario and play it through."

The bottom line, Hewitt said, is to help a CEO "smell the
money."

Prescription For A Successful Internet Model

Dell's Paul Bell outlined nine steps companies should take
to build a successful Internet presence.

1. Be sure the strategy is driven from the top.
2. Make the Internet the first point of contact for every
   customer and prospect.
3. Integrate the Net into every part of the business.
4. Change IT strategy to support your customer interactions.
5. Substitute information for inventory.
6. Provide unique web-based services to customers.
7. Be global, but localize your web offerings.
8. Use the Net to share information with customers and
   vendors.
9. Commit to ongoing technology infrastructure spending.

Outtakes

"We aren't interested in hits. Hits are useless. We are
interested in the length of the sessions." - Bernard Hewitt,
RS Components

"Comparisons between the US and Europe business markets are
spurious. The USA has had 200 years to develop [its business
markets]; Europe has had 20 months with a common
currency.... Do I have any sense of inferiority being a
European? No." Colum Joyce, DHL International N.V.

"We believe very strongly that inventory should always be in
motion. Inventory at rest is a very very serious problem,
because there is a lot of money tied up in it." - Paul Bell,
Dell Computer, explaining his company's vision to reduce its
inventory from its current level of 8 days to several hours

"I work with two sides... the turtlenecks (or new media
guys) and the T-shirts (the IT guys)." - Bernard Hewitt

"We consider ourselves babes in the woods. We live by the
dictum,'Only the paranoid survive.'" - Paul Bell

"We come from cultures where hoarding.... is how we were
raised. Now we are moving to a place where you give the
information away for free, and put it in a place where your
competitors can see it. Hoarding information is not the
advantage. Giving information away is the advantage." - Paul
Bell

"Where the cold wind of technology blows through your
organization and freezes the heart of your organization, you
will lose customers, as sure as if you had no customer
service to begin with." - Colum Joyce, on the importance of
developing online customer service

"The Internet is the next best thing to mental telepathy." -
Paul Bell

"Our leaders have a vision of a single European market. So I
have to ask you, what is our vision within that?" - Therese
Torris, Forrester

"The penetration and usage level are lower here than it is
in the US. But we see no reason why that will continue to be
true." -Paul Bell, speaking of Internet usage in Europe

"Dynamic trade effectively comes down to an absolute
adherence to your customer's needs." - Colum Joyce

Tchotchke of the Day

Forrester may be rife with polished, articulate consultants.
But it's not exactly rich with tchotchkes. In fact, only a
single tchotchke reared at all during Forrester's event. But
it was a winner: A durable black canvas briefcase with the
Forrester logo clearly stamped on the outside. Very cool.
Now if I only had a puzzle cube, T-shirt or squeeze ball to
put in it....

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Received on Wed Feb 10 1999 - 22:13:40 CST