3rd Edition – Special Pre-Show Issue - September 2000 

From our President: Gregg V. Rock, President, BrainStorm Group, Inc.;

The Experts Corner:   
The New ‘E’ – E-Sourcing
By Michael F. Corbett, President, Michael F. Corbett & Associates, Ltd.

The People Issues in E-Business Sourcing
by Dr. Wendell Jones, Senior Consultant, Cutter Consortium Sourcing Advisory Service and Author of Outsourcing Information Technology Systems and Services

Conference Overview: eBusiness Strategy Conference San Francisco - October 2-4, 2000

 

From our President

Gregg V. Rock, President, BrainStorm Group, Inc.

Welcome to a special edition of BrainStorm Group's eBusiness Strategy Bulletin! The articles and conference preview featured in this issue will provide you with a small sampling of the issues which will be addressed at our upcoming San Francisco eBusiness Strategy Conference, which will be held October 2-4.

Don't miss this opportunity to meet face to face with eBusiness Strategy "thought leaders", highly acclaimed authors, writers and editors, representatives from leading analyst and research firms, and END USER practitioners. 

I look forward to seeing you in San Francisco! 

 

The Experts Corner: 

The New ‘E’ – E-sourcing

By Michael F. Corbett, President, Michael F. Corbett & Associates, Ltd. and eBusiness Strategy Executive Advisory Board Member

Speed, Focus, Flexibility 

Imagine an approach to information technology where company-wide applications are deployed in a matter of days or weeks, at one-third to one-half lower cost than is typical today. Imagine an approach to financing these capabilities that eliminates the up-front investment and replaces it with a flat monthly charge that doesn’t begin until it all “goes live.” 

Such an approach is called e-sourcing. It exists today and it is being delivered to thousands of companies by hundreds of application service providers — ASPs — all around the globe. “Certainly everyone is not there yet,” says Virender Ahluwalia, head of finance for Vertical Networks, Inc., the Sunnyvale, California, creator of integrated voice and data products, and an early adopter of the ASP model, “but I absolutely believe that everybody will embrace this approach over the next three to five years.” 

Defining a New Way of Doing Business 

Probably the safest —and broadest —definition of an ASP is any company that is remotely hosting a software application and providing access and use of it to clients over a network on a recurring fee basis. A couple of years ago, the term had not even been coined; today there are hundreds of firms that fit this definition. Industry-watcher estimates for annual ASP spending by U.S. organizations by 2003 range from a low of $2 billion to a high of $22.7 billion. 

While the crystal ball may be cloudy, what is clear is that ASPs are quickly emerging as one of the most important business revolutions yet to emerge from the dot-com world. “In many ways,” says Traver Gruen-Kennedy, chairman of the ASP Industry Consortium, an international industry advocacy group, “application service providers are doing for software what the Internet has already done for data —making software applications universally available, affordable, and ubiquitous.”

This “software as a service” approach offers real advantages. Applications can be deployed much more quickly, with far fewer up-front costs. And ongoing operational and maintenance headaches are moved from the client’s organization to the ASP. Because the corporation’s users access the application over the network via standard browser software, the problems of PC compliance and software release upgrades, so typical today, go away. On top of this are stacked all the advantages associated with outsourcing in general, from freeing capital and internal resources —especially today ’s scarce IT resources — for other purposes, to being able to take advantage of the latest technologies, with lower risks and lower total costs.

The bottom line is that almost any software application, from the most essential data archiving application to the most sophisticated e-commerce application, can be rapidly implemented through an ASP in a fraction of the time and at a fraction of the cost seen before now. This new approach to e-sourcing the corporation may well prove to be, as one observer put it, “as revolutionary as the PC was in the 1980s.”

In addition to serving on eBusiness Strategy Advisory Board, you can also hear Michael in New York, September 19-20.Executives from leading U.S. firms, including, hpshopping.com, BASF, Wingspan Investment Services and Vertical Networks will share in-depth their experiences at the just announced symposium E-sourcing the Corporation: How the ASP Model is Transforming Business being held in New York City on September 19-20, 2000. The focus is on learning through open debate, discussion and a healthy challenging of assumptions and of the status quo. Attendees include: senior managers; strategic planners; functional heads from finance, human resources, customer care, operations, logistics, and manufacturing; technology managers; dot-com trailblazers, and; entrepreneurs 

 

The People Issues in E-Business Sourcing 

by Dr. Wendell Jones, Senior Consultant, Cutter Consortium Sourcing Advisory Service and Author of Outsourcing Information Technology Systems and Services

There are three key groups of people who are affected by and important to the success of an outsourcing relationship. One group is the managers and users who consume and pay for the services; second is the team that represents the consumer and manages the relationship on behalf of the buyer/consumer; third is the service provider’s managers and staff responsible for delivering the services for and managing the relationship with the customer. 

The following are a few suggestions on how to increase the probability of success by attending to the needs and concerns of these three groups.

1. The person or team that manages the outsourcing relationship for the customer should receive specific training on how to do the job. This includes an understanding of the business goals of the contract, the specific performance criteria agreed to, and individual roles, responsibilities, authority, and reporting structure. The same information should be communicated to the larger end-user community. In this way, the entire organization understands what is intended, how problems will be identified and resolved, what the proper communication channels are, what is expected, etc. This training and communication should also help reduce resistance to change.

2. The customer should offer training for the vendor’s staff on the customer’s business environment and goals. Although vendor personnel may be technically proficient, they require specific, ongoing training on the client’s business and goals. In this way, they develop the needed sensitivity to the issues driving the client’s needs.

3. Both customer and provider personnel should be involved in:

  • Informal meetings and social events
  • Education on company heritage and history
  • Rotation of employees between the companies
  • “Internal” meetings of the other firm
  • Participation in the other party’s internal improvement programs, such as quality teams
  • Jointly sponsored recognition events

4. Effective and timely communication during the evaluation and analysis phases (before the decision to outsource or not outsource) should be emphasized. One way to improve communications is to use a hotline to deal with the rumor mill. Various forms of communications (e.g., newsletters, Web sites, e-mails, small group meetings, and organization-wide meetings) help get accurate messages traveling as widely as, if not as fast as, the rumor mill. 

Keeping people informed every step of the way and working out a deal perceived as fair for the people affected is important because an organization trades more than its physical assets to the vendor in an outsourcing arrangement — it often gives away its people as well. The customer’s employees can become the vendor’s employees. Treating people as fairly as feasible is both the prudent and the right thing to do.

In addition, remember to consider human factors from the perspective of the user community. Users should be provided with points of contact before implementation, and an issue-resolution process should be immediately instituted. 

Above all, the groups involved should feel that their concerns were considered during the evaluation and decision process and throughout the term of the relationship process.

 

Conference Preview:
eBusiness Strategy Conference, San Francisco, October 2-4, 2000 

Much has been written about which business models will succeed and/or fail as we enter the next chapter of the new economy - unfortunately the majority of these perspectives have been theoretical.

Don't miss this opportunity to hear how traditional organizations and dot coms are building, implementing and managing their corporate eBusiness strategy - directly from the individuals charged with leading those efforts. 

Extended educational sessions detail proven "best of breed" solutions, lessons learned, technological advancements and developing trends in e-business.

Join Opening Keynote, Rich Karlgaard, publisher of Forbes Magazine as he discusses "Round Two of the New Economy". Additional Keynote presenters include Chris MacAskill - CEO of MightyWords and Founder and Chairman of the Board, FatBrain.com, Antonio Franco, Director, Giga Information Group and Kevin M. Hickey, Chairman and CEO, Homebid.com --- a complete agenda is available for your review.  

Our program will also feature real-world end-user Case Studies on: B2B Exchanges, Launching a Dot Com, Innovations in e-Marketing, plus much more.

The eBusiness Strategy Conference is sponsored by over 40 organizations including our The New York Times, Forbes, Upside, and the leading eBusiness Analyst and Research Firms. 

REGISTER EARLY!
Register before September 22nd to receive 
Advanced Registration Discount ($100 savings over on-site)

SPECIAL NOTE: Post-Conference Seminars
The following Seminars will be held on Wednesday Oct. 4th from 1:00 - 4:30 - special discounts are available to BrainStorm San Francisco attendees:

 

Additional BrainStorm Events in 2000 Include: 

eBusiness Strategy Conference
November 13-15, New York City

eBusiness Integration Conference: B2B Integration Strategies and Solutions
October 2-4, San Francisco
November 13-15, New York City

 
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