INTERVIEWS Expert Insight By David Baum Mark Rankin, national director of Electronic Commerce at Ernst & Young, names Oracle a leading e-commerce solutions provider. Ernst & Young (www.ey.com) is one of the world's leading consulting, accounting, and tax firms. With 1998 revenues of $5.5 billion, it employs 30,000 people in 87 locations, and audits 114 of the Fortune 500 corporations in the United States. Ernst & Young eCommerce Services helps companies with strategic planning, technology implementation, business effectiveness, privacy, and extended and safe use of the Internet, using customized and packaged technical solutions. It provides organizations with leading-edge e-commerce professionals who review current processes, visualize process enhancements, and guide the logistics of electronic reengineering. Profit recently spoke with Mark Rankin, Ernst & Young's national director of Electronic Commerce, to obtain his insights into the latest issues surrounding e-commerce in the business-to-business arena. Profit: Ernst & Young has had an electronic-commerce practice in place for several years. Can you give us an overview of its major activities? Rankin: For some time, we have been able to provide end-to-end capabilities to our clients. We are doing a significant amount of strategy and implementation work around electronic commerce. These projects typically start with a business strategy, a technology strategy, or a suite of applications. Oracle Applications software is often part of this scenario. The processes that we see building momentum in the future are natural extensions to the ERP-based packages. Oracle is one of the leaders in that marketplace. Profit: Many observers compare the widespread changes brought on by e-commerce with the global upheavals that took place during the industrial revolution. In your view, what are some of the parallels? Rankin: The industrial revolution made people's lives better, it made commerce easier, and it gave people more leisure time for other endeavors. Electronic commerce is having a similar impact. However, e-commerce will be much more pervasive-it will be everywhere and, over time, impact everyone.      Another parallel is that great wealth is being created from very small beginnings. A large part of the money and wealth that was made during the industrial revolution was from people who had access to raw materials or basic infrastructure such as railroads, oil, and electricity. Today we are seeing the same phenomenon with people who start out with very little-people who have a concept, a product, a utility, or some service that allows them to create great wealth.      What is vastly different in comparing e-commerce and the industrial revolution is the speed of adoption. E-commerce is moving much, much faster. I don't think that any of us really has a good sense of how far it will go and in what time frame. Profit: How is e-commerce streamlining and enhancing businesses relationships between a company and its suppliers on one end of the spectrum and its distributors on the other? Rankin: We've been busy serving clients in the electronic-procurement area, the front end of the new, connected supply chain. This focus is on placing purchasing power in the hands of people in an operational environment, with vastly enhanced visibility to the entire supply chain base. With e-procurement, there is no longer a need to fill out a requisition, get an invoice, and pay the invoice. We see it reducing inventory and waste because the people who are closest to the consumption are making the purchasing decisions in real time, with the best available price and delivery parameters.      Another major change we see on the e-commerce front is a switch from proprietary EDI networks to more open networks. Last year, on a business-to-business basis, there was approximately $280 billion worth of e-commerce in proprietary EDI networks. There has been a vast amount of electronic commerce there for years; it has just been very proprietary. One-to-one or one-to-a-few has been changed to many-to-many. Now the world is moving to more open systems, a more open environment. More value can be added because of the expanded knowledge-sharing capabilities and the ability to format the data in a multitude of ways.      The very nature of the supply chain is changing as well. There are significant innovations in how inventory is tracked and demand and supply are matched. The time that it takes to move goods and supplies from point A to point B is more streamlined, because there is much more information related to the ultimate consumption. It is easier to see where the materials need to go. Profit: How about for "customer-facing" business processes? In your experience, how is the Web streamlining customer-care activities and call centers? Rankin: The major trend that we see is toward self service. It drives higher levels of satisfaction, fewer errors, and greater access. It is much easier for people to provide self service, from initial ordering through follow-up, so they can constantly track the status of an order. This extends through manufacturing, delivery, and all the way to consumption. Oracle is putting a lot of effort into its front-office applications. Quite frankly, from an integration standpoint, this will give Oracle an advantage over some of the other packages. Profit: Some analysts refer to electronic collaboration as the final stage in business-to-business electronic relationships-a situation in which two companies leverage each other's information systems to enhance the overall customer experience. Can you think of any examples of this synergy? Rankin: We see more and more collaboration taking place as it becomes easier to share information. You do not have to physically be side by side in order to collaborate around a total service offering. In a hardware environment, you might get the hardware from one direction and the software applications and services from another direction. You need the combination of the products and the services to create a total solution. To a user who is ordering that solution, it may not be evident where the goods are coming from and where the services are coming from; it is one streamlined business process. It could come from multiple suppliers through one spot on the Web. There is some electronic collaboration taking place behind the scenes to make that possible. Profit: Our customers tell us that integrating legacy systems and databases with Web applications is one of the biggest challenges to deploying effective e-commerce systems. What advice can you offer in this area? Rankin: Consider the overall process. Most companies begin with e-information, which is a simple posting of Web pages. From there, they migrate to e-commerce, which involves conducting transactions using the Internet. Finally, they become e-corporations that are well connected not only internally but with suppliers and customers. When you start to migrate into e-commerce, you must enable links to the legacy systems that are the backbone of the organization. And when you become an e-corporation, you must have total integration through all of the different constituencies in the extended economic enterprise. This is a good argument for a strong infrastructure, such as you would get from an e-commerce supplier like Oracle, where there is a consistent repository of business data uniting the enterprise. Profit: What are the essential ingredients of an IT infrastructure that can support e-commerce activities both now and in the future? Rankin: We advise clients to take a release-management approach to their IT infrastructure. That means don't spend too much time trying to get it perfect. Understand that it will change. Go with the best available knowledge and be first to market. Some processes may be throw-away, and some may be worthy of building upon, but certainly all will change. In many cases, it is more important to be first than to be perfect. Profit: What role do data-warehousing and business-intelligence applications play in today's e-commerce systems? Rankin: Today you can customize your product and service offerings to a much greater extent than you could before. Targeting what the buyer needs will be considerably more refined over time. Right now, we're helping our clients understand the buying habits of their customers and the major markets. Once we understand those buying habits, our clients will have the information to present more meaningful and targeted offers to customers. This is where data warehousing and business intelligence are intersecting with e-commerce systems. Profit: What are some of the strengths of the Oracle Applications suite? In what situations do you recommend it? Rankin: With Release 11 being entirely Web-based, Oracle already has a major jump on some of its competitors. We expect the manufacturing industry to be an early adopter of business-to-business e-commerce, moving rapidly away from proprietary EDI networks, across the supply chain. And no one is better positioned than Oracle from a market-penetration and applications-solution standpoint. Oracle Applications is also making great inroads with service-based companies, which are concerned with the customer side. We're optimistic about how Oracle's applications can soon become a more pervasive solution for the health-care environment as well. And it is certainly well known that Oracle is powerful in the internal-support area, with its administrative and core financial applications. Profit: Do you think Oracle is one of the key technology suppliers in the e-commerce arena? Rankin: Absolutely. Oracle's solutions have become one of the major architectural choices that people have to make in this marketplace. Oracle doesn't just offer a suite of applications and database products but offers a cohesive approach to e-commerce-an Internet business strategy. Companies make a conscious choice when they say "we want to take an Oracle-based approach to e-commerce." In my experience, a lot of people are making that choice. David Baum (dwbaum@silcom.com) is a contributing editor for Oracle Publishing.