Techs Soft Landing In Rough Economy - Page 5

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Its the Supply Chain, Stupid

In terms of where the money will be spent this year, the phrase that seems to be on everyones lips is "Webification of the supply chain." The premise here is pretty simple, while the execution is immensely complicated: Corporations are beginning to use the Internet to plug directly into the operations of their suppliers and buyers, the idea being that it will eventually be possible to peer directly into the operations of all of a companys major partners to develop, manufacture and ship products to shelves in as close to real-time as possible. This involves much more than building Internet marketplaces, although that is certainly part of the picture. Its about General Motors being able to see into its dealerships to determine which vehicles are going out the door, and being able to look into the production systems of its suppliers to determine how quickly it can replace parts without stockpiling products in inventory.

The benefits of such systems for companies in sectors as far ranging as aerospace, automotive, consumer products and electronics are enormous. And the early results have been impressive enough to keep the Internet economy rolling despite the larger economic picture.

HP, for one, estimated that it saved about $70 million on its various supply chain initiatives this year, and that it could save as much as $400 million in 2001.

Beyond the supply chain, analysts and CIOs said they expect there will continue to be a big focus on customer relationship management systems and related intelligence systems to better serve customers, as well as continued investments in data warehouses to support the various e-commerce systems now being implemented.

One of the new areas to show up on the radar screen is a focus on B2E — or business-to-employee — applications. Companies are beginning to realize there are big benefits and cost savings to be gained from creating applications on corporate intranets that allow employees to access their benefits programs and operational programs such as travel and expense management.