The Internet is more than the World Wide Web global network: it’s a complete, new model for corporate computing. Internet computing is based on universal standards.
Internet applications are easy to develop and inexpensive to run. Data is consolidated. Complexity is centralized. Information is distributed. Internet computing is so revolutionary that it will totally replace the mainframe and client-server systems that came before.
Client-server is a desktop-centric model for distributed computing. Applications, such as order entry, run on desktop client PCs networked to a shared database server. Unfortunately, installing and upgrading database application software on lots of desktop PCs is a complex, labor-intensive, error-prone process. Distributing all this complexity to users’ desktops has proven to be a costly mistake. In contrast, Internet computing centralizes complexity by putting database application software on centrally managed servers.
Subtler but more serious client-server problems are caused by the need for a fast network connection between the client PCs and the server. The standard “solution” to this problem involves putting little database servers everywhere. Unfortunately, this approach distributes the complexity and cost of database backup and recovery into many locations. Worse yet, your information gets fragmented into lots of little databases.
Data fragmentation makes it near impossible to get timely access to key information. Let’s say you have a little database in each of your 200 retail stores. If you want to total-up global sales, you have to access all 200 databases. Consolidate those 200 local databases into 10 national databases and you’re better off. Every time you consolidate databases, information increases and costs decrease.
The ideal is a single global database in both a primary and backup data center. A global database on a global network provides the most information at the lowest possible cost. Unfortunately, client-server databases are difficult to consolidate because client-servertechnology doesn’t work well on global networks. Internet technology was designed forglobal networks so database consolidation is easy.
Client-server systems are plagued by data fragmentation and distributed complexity. Mainframes have their own set of problems. Foremost, no one wants to go back tomainframes because writing mainframe software is too difficult and time consuming.And mainframe hardware still costs a lot more than open systems. Until all thesemainframe and client-server computing problems are solved, computer systems willcontinue to promise more than they can deliver. Enter the Internet. Internet computingsolves each and every one of these long standing problems. Well, actually, it does alot more than that.
Corporate intranets and the World Wide Web employ the same low-cost, open system hardware used in client-server networks. Everything else is better. Developing internet applications is easier than developing client-server applications, and mucheasier than developing mainframe applications. Internet applications run on servers,not desktop PCs, so software upgrades become a reliable, centrally managed function. Internet applications are accessible via a global network, so you can consolidate all your little databases into a few big ones. And the only software your users will ever need is a standard Web browser.
But that’s just the technology side of the story. The advent of the Internet is soimportant that it will do more than change the way your business uses computers: theInternet will change the way your business does business. The immediate imperativeis to better understand when and how.
Hardly anyone disputes the fact that the Internet has changed everything. But the questions “how?” and “when?” remain the object of much speculation. The sudden flash of new companies Amazon, eBay, Yahoo! illuminated the predawn of the Information Age. Sunrise came as a handful of early birds – Cisco, Dell and Schwab for example, used the Internet to grab competitive advantage. Now, thousands of mature companies are beginning to transform themselves by moving many of their core activities to the Web. They’ve seen the light. The others will feel the heat.
Every website provides basic information about a company’s products and services. Many include a web store where products are sold. But using the Internet to improve brand awareness and establish another distribution channel is just a beginning. A web store needs to be tightly coupled to a call center. Field sales people and distributors need to be connected as well. The Internet can lower sales costs and broaden market reach by coordinating activities across all distribution channels. But this new integrated selling model requires organizations to change their processes as well as their technology.
E-commerce began when the Internet enabled an innovative new way for businesses to sell to consumers. But that’s small potatoes when compared with how much businesses will electronically trade with each other. Business-to-business e-commerce in the United States alone is estimated to exceed $1 trillion in 2003. That’s ten times larger than business-to-consumer e-commerce. When companies move their buying to the Internet, their suppliers will have to be online too, or they won’t be able to bid on supply contracts. Large companies and entire industries will form electronic trading communities. If you´re not connected you can’t survive.
E-commerce buying and selling over the Internet is outward looking. But Internet computing enables internal efficiencies as well. After years of anticipation and disappointment, the productivity gains promised by computing are finally going to be delivered.
Paperless Internet transactions are fast, accurate and cheap. Employees make their own travel plans, buy their own plane tickets and enter their own expense reports on the Internet. Managers give raises, approve vacations and hire new employees on the Internet. This self-service approach to transaction entry lowers costs while improving the accuracy and timeliness of business information. And information is at the center of every e-business.
In an e-business, everyone is online. Everyone has better information. Everyone is more efficient, especially managers. Managers have instant access to up-to-date information about every aspect of the business sales forecasts, order levels, inventory balances,everything. They immediately know the moment a marketing campaign becomes ineffective, when a supplier fails to deliver and when a customer becomes unprofitable.
Employees do their jobs better because they share the latest information. They share information not only with each other, but with customers, suppliers and partners. Support shares customer problems with engineering so problems get fixed faster. Manufacturingshares demand levels with suppliers so inventory levels are managed better. The sales force shares leads and synchronizes selling strategy with partners so more deals are closed.
These changes to your business are fundamental and profound. They go far beyond e-commerce. Transforming your business into an e-business involves changing the technology, processes, structure and culture of your organization.
Oracle Corporation is the leading provider of software for e-business.