Electronic Commerce Savior or Pipe Dream?

Kevin J. Williams, C.P.M., A.P.P. Purchasing Specialist ESPN, Inc.

The Challenge of Change

"There is a certain relief in change, even though it be from bad to worse; as I have found in traveling in a stage-coach, that it is often a comfort to shift one's position and be bruised in a new place." - Washington Irving

Quick Facts
Launched September 8, 1979 6 Domestic Networks including ESPN, ESPN2, ESPNEWS, ESPN Classic, ESPN Extra and ESPNOW Other ESPN businesses include ESPN.com, ESPN Radio, Sportsticker, ERT, ESPN the Magazine and ESPN Enterprises which includes ESPN Zone Restaurants, Interactive Software, Home Video, CDS and Pay Subscriptions Headquartered in Bristol, CT and employs 2,4OO FTES

Disney Efforts
Directly from Michael Eisners presentation at the 2/2000 Shareholders Meeting in Chicago: Another effort underway to optimize our company's performance is our Strategic Sourcing initiative, a top-to-bottom review of our purchasing practices. Within five years, we expect to be saving more than $300 million annually from Strategic Sourcing. Since we'd all rather I talk about movies, let's put this in terms of movies: $300 million is the equivalent of earning the combined ultimate profits of "The Rock," "Ransom" and "The Waterboy" each and every year.

Keys to Success
Tech.

Process

Skills

Organization

The Procurement Cycle

Customer Involvement
Engineering Design Specifications Negotiation Supplier Selection Order Placement Delivery Quality

Purchasing Involvement

The Old Purchasing Process

Demand Signal Purchasing Existing Contract? Dollar value requires bids? Obtain bids/evaluate Select suppliers Place Order Goods delivered P.O. closed Yes No Release on Contract

Source: Purchasing/Michael and Mary Lu Harding

The Uncertainty of E-Commerce

E-Commerce + Knowledge - 1,443,307 hits E-Commerce + Confusion - 597,982 hits E-Commerce + Problems - 3,400,456 hits E-Commerce + @#!&%#? - 598,397 hits E-Commerce + Purchasing - 597,982 hits
Source: Infoseek (4/2000)

What is E-Commerce Really

The buying and selling of products and services by businesses and consumers over the internetTypically there are three types of e-commerce transactions: business to business (i.e.Cisco), business to consumer (i.e. etailers), and consumer to consumer (eBay).
Source: ask.com

A Different Approach
Internal Systems Generic External Tools Commercial External Systems

Internal Systems
In-House Third Party Combination Large or Small

Generic External Tools

E-Mail E-Fax Online Ordering (Dialup and Internet)

Commercial External Systems

Commercially marketed ecommerce applications Transition/Replacement for EDI Blurring the lines

Getting Started
Avoid Paralysis by Analysis List your resources (brainstorm) Group by category
Easy Moderate Challenging

Easy Options
Little to no change Start with the basics Look for freeware Use your current system to its fullest

Moderate Options
Relatively short implementation (6-12 months) Resources decide potential success Software Hardware Internet solutions

Challenging Options
Achievable, but longer time frame (12+ months) Use the time effectively Separate marketing hype from real requirements

Get Involved!!!
Purchasing is not consulted enough Talk with:
Suppliers Peers Government Software companies

Avoid the Pitfalls

Dont automate inefficiency If you need a workaround, you need a new system Re-engineering still works

Summary Any Questions?