Sig,
Hi!!
RE: Cmgi earns 66 cents over the estimate. Hope the effect carries over into other tech stocks.
Interesting announcements today on DELL...very interesting...This is one I sent out earlier..Hope you read it or read it again...IMO we are staring at revenue growth beyond our imaginations...and something I haven't heard too many considering...
Best, Kemble
Dell Digs Deep Into Integration
By Edward Cone, Inter@ctive Week
September 27, 1999 9:31 AM ET
Dell Computer is moving quickly into the next phase of interbusiness
commerce: deep integration. The Austin, Texas-based giant is opening
its manufacturing systems to the procurement systems of its customers,
allowing for the automation of almost the entire purchasing process.
Dell expects the program, which it calls direct commerce integration,
to save large customers millions of dollars apiece in procurement
costs, while at the same time creating efficiencies that will help
preserve the computer maker's margins as hardware prices trend
downward. That's the message Chief Executive Michael Dell will share
with analysts at a briefing next month.
"This is the ability to exchange data that is actually correct, as
customers pull information from our system to their own," says Gregory
Daly, sales integration manager at Dell's online business development
organization.
By linking its production systems to the back-office systems of its
customers, including popular Enterprise Resource Planning (ERP)
products and Web-based procurement packages such as Ariba, Dell is
advancing its longtime direct sales model and putting some distance
between itself and competing vendors. "Dell is out in front of other
manufacturers on this," says Dave Rome, vice president of marketing at
Ariba.
A pilot customer of the direct commerce initiative is the Commonwealth
of Massachusetts, which shops for computers via a governmental portal
called the Multi-State EMall. "This level of integration gives Dell a
competitive advantage," says John G. Harrison, supplier coordinator for
the Commonwealth. "Anytime that you can automate one of the steps in
the procurement process, you get advantages in speed, cost savings or
accuracy, and sometimes all three."
Dell also announced its integration with the mySAP.com portal of ERP
heavyweight SAP. "This is a benefit to us both," says Jan Reinhart, who
works in the chairman's office at SAP. "It lets us show that we're not
just a pretty portal, but an industrial-grade B2B solution, as people
can log directly from their ERP screens to external catalogs through
mySap - they may not even know they're on the portal."
While many manufacturers are opening up to specific ERP systems and
portals, Dell is inviting everyone to the party by making extensive use
of the eXtensible Markup Language.
Dell's link to Oracle's purchasing site gives more than 250 customers
access to its production. XML, a follow-on language to the HyperText
Markup Language, includes tags that facilitate systems integration.
Dell is working closely with integrator webMethods to develop its
open-access capability. Customers should face minimal difficulty at
their end, with Dell offering a package of hardware, software and up to
a week of onsite consulting for under $15,000. Several companies are
now working on integration, and Dell says it should have some online by
the end of this year, on its way to hundreds in the year ahead.
While the technology is straightforward, companies will still have
issues about integration. "This is like an ERP project or a security
project in that it's a process issue," Dell's Daly says. "It touches on
groups that may not normally talk to each other, so it forces people to
map those relationships."
Automation is already paring costs for Dell, which wants to get 50
percent of its revenue online by the end of next year. The value shows
up in areas such as order status queries, which usually cost the
company nothing when handled online, vs. $3 to $10 apiece when
transacted via telephone. Three-quarters of such transactions are now
done online at Dell.
Direct commerce moves beyond Dell's 27,000 Premier Pages, which allow
customers access to automated purchase orders, customizable
configurations, order tracking and status, and other tools and
information. While Premier Pages can tie orders into the manufacturing
process, customers wanted more complete back-end integration.
"This is a function of hearing what our customers are asking for," Daly
says. "A year-and-a-half ago, the Premier Page tools were pretty
compelling. Now the industry has evolved."
The Multi-State EMall, for example, requested that Dell accommodate the
Open Buying on the Internet (OBI) standard. "They said, 'We want to
integrate,' so we built some code into our commerce app to be able to
talk to them," says John Winfrey, senior electronic commerce program
manager in Dell's Relationship Online organization.
Now Massachusetts' Harrison can use Dell's sophisticated PC
configurator and get his information back in an OBI-compliant format.
"That's unique," he says.
The EMall will work on linking its back-office systems responsible for
post-order events in coming months.
The same kind of customer pressure is pushing third-party players such
as Ariba into the process. Ariba got involved as it became clear that
many of its large buyers, including Federal Express and Phillips, shop
heavily at Dell. "This is a good thing for us," Rome says. "We're happy
to integrate our Ariba experience into Dell and take advantage of what
they offer." In addition to Ariba, Oracle and SAP, Dell is also working
with ERP vendors Baan and PeopleSoft, as well as middleware companies
such as Intelisys, Microsoft and Sterling Commerce.
Dell hopes to convince customers that buying directly from the
manufacturer makes sense in ways beyond the immediate efficiencies,
too. The company wants to leverage the detailed information it collects
on every computer shipped to build deeper relationships with buyers and
gain a larger percentage of each purchasing dollar in the process. "We
are laying a foundation with our customers that says, this is not a
one-off thing," Winfrey says. "That's the benefit that the direct model
affords us, and this is not the last step we'll take in that
direction." |
