Monthly Archives: June 2002

An Interview: Business and the Internet

Posted on Tuesday, June 25, 2002 by Robin Bloor

The background to this interview is that I was making a presentation in Spain to the II International Walqa E-business Meeting in 2002. The organizers interviewed me so they had some extra content to publish in the proceedings.

Q: You have compared the appearance of the Internet with the appearance of the printing press. Do you believe that current society is already aware of the advantages that can be gained from the new technologies that have emerged?

RB: I currently believe that society is very far from realising what is possible and indeed business is also quite a way from realising what could be achieved. There are very good reasons for this and it makes sense to pursue the analogy of printing to consider this:

Printing was the first information technology that proliferated widely. Indeed printing caused reading and writing to become a common skill over time. In the same way computers and the Internet are making typing, email, surfing and quite a few other things into common skills.

Printing also had other major impacts. It completely destroyed the central control that the Roman Catholic Church had established over Christian doctrine, because suddenly people could print their own Bibles. It made the central control of any kind of knowledge very difficult to impose.

One consequence of the Internet is that information is proliferated far more quickly and there is a much greater amount of feedback possible from those who receive information. Nowadays when you introduce a new idea you get instant feedback. Journalists and even writers and researchers like myself are unable to avoid feedback whether it is critical or not. Everything develops much faster and we have not yet become accustomed to this change of speed.

Also there are many developments that have yet to occur and will not occur until the Internet evolves a little further. Bandwidth availability, for example, is constraining the development of video based business ideas and particularly e-learning, which on its own will constitute a revolution.

Q: After the collapse of the dotcoms, have companies lost confidence in the Internet or is confidence reviving?

RB: The dotcom collapse was in some ways a healthy economic development – but it is also a cause of delay in the onset of a number if new technologies and developments which will have a revolutionary impact on the way that businesses work and individuals behave.

Dealing with the positive side first, a whole number of business experiments were taking place on the Internet and the dotcom collapse brought many of them to a quick conclusion in one way or another. It forced many web sites to prove that they had viable business models.

Thus it is clear that the ISPs have a genuine business model even if Yahoo and AOL no longer look as healthy as they were. Ebay has proved that on-line auctioning is a real market, but has also demonstrated that there is not room for many on-line auction houses. Amazon has demonstrated the viability of e-retail for easily packaged items such as books, CDs and videos. A whole host of other retail sites have demonstrated the e-retail is a viable market.

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An Interview: Business and the Internet Continued…#1

Posted on Monday, June 24, 2002 by Robin Bloor

Continued….

However now that the promise of getting rich quickly is no longer there, most companies are taking time in developing their use of the Internet and being cautious. The statistics still indicate that e-retail is growing at above 60 percent per year and that the population of Internet users is still rising at over 100 million people a year.

For most companies an Internet presence is absolutely necessary, but many companies have slowed their efforts in the light of the dotcom collapse. At the moment there is no strong driving force to lend urgency to their efforts and we do not believe that one will arise until wireless Internet access develops.

The problem here is that the 3G auctions have made access very expensive and at the same time, most of the wireless operators are performing poorly (in financial terms). The use of mobile technology has not gone much beyond phone calls and text messages, but when it does a whole series of business developments will occur that will drive many companies forward. The most important of these will be the use of mobile technology as a mechanism for payment.

Q: You advocate the use of the Internet as a means to capture new customers and keep them loyal and also to differentiate from your competitors. But in large firms is it not the case that customers feel distanced from their suppliers when the relationship is managed through the Internet. Is it not a fact that communication through a computer is colder and more distant?

This is a correct observation. Computer communication is cold and distant compared to what it could be. There is a strong technology factor involved in this. Quite simply voice technology and video technology have yet to become a direct part of the Internet interface.

The point here is that currently there is little that a company can do to improve the coldness of the Interface because both voice technology and video technology demand high bandwidth – which most customers do not have – and the integration of these technologies also needs to go through a period of development before it becomes clear what is possible.

In reality, the coldness of the Interface has more to do with the lack of direct visual interaction and sound interaction with the computer than with the lack of human-to-human contact. In time people will become used to a richer interface and it will become clearer which types of interaction can become automatic human-to-software interactions and which need to be human-to-human.
Inciedntally, it is not easy to predict this ahead of time. It has already been discovered for example that if people are receiving phone-calls in respect of debt chasing, they prefer to talk to an automated voice system than a real human being. Naturally there is also a cost factor involved in this. Human beings cost more than software.

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An Interview: Business and the Internet Continued…#2

Posted on Sunday, June 23, 2002 by Robin Bloor

Continued…

Q: Will it be necessary in the future to educate staff so that they can exploit personal relations through the Net in depth?

RB: I think that retraining will become a permanent feature of the Internet with time because the Internet enables change to occur so quickly and getting people to adjust to the change and take advantage of what is provided is necessary to support the rate of change.

On this specific item, we note that some fairly recent technology is improving person to person capabilities through the Net. It began with chat and instant messaging and now we are beginning to see the use of video and also direct software sharing emerging. This is still an early stage development and so much has yet to occur.

However the popularity of chat and instant messaging is so great as to demonstrate on its own the popular desire for a much richer person-to-person capability through the Internet. Naturally this will lead to a better exploitation of personal relations in business and, perhaps, a much more satisfying ability to interact with friends and family – especially across large distances.

Q: You believe that small companies must also bet on new technologies. However is it not the case that they benefit from their more personalised treatment of customers?

RB: This is not really about the size of company but about the type of business or business process. In reality the cost of providing personalised treatment is high and hence those businesses where it is an essential part of the normal business process always charge higher prices for the service they provide. If the customer is willing to pay the premium then the business can prosper.

However, as we have already mentioned, there are technologies that can help to improve this kind of person-to-person interaction (chat, instant messaging, video, computer-integrated telephony, etc.). The companies that invest in such technologies may be able to cut costs and maintain the level of service they provide. Considering appropriateness of such investment is important for companies whether they are large or small.

Also we need to understand that personalisation can be assisted directly through automation – particularly by using profiling software which can accurately predict the preferences of individuals. So there are two factors to consider here.
The first is how possible it is to provide a pleasant interaction for the customer, whether this is automated or not. The second is how well we can get to know the customer using technology to assist us. In the end, for most business the best solutions are likely to come from good blends of technology and person service.

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An Interview: Business and the Internet Continued…#3

Posted on Saturday, June 22, 2002 by Robin Bloor

Continued….

Q: What would you recommend to the small Aragonese companies that have decided to embrace new technologies?

RB: Of course this depends very much on the kind of business that they are in. However I can give some advice that is very important. If you use any of the newer technologies you must monitor how your customers or staff make use of them. It needs to be understood that the best ways to use most new technologies is usually not understood when these technologies first come to market and sometimes the technology even proves to be ineffective.

Of course those who are selling the technology will always claim that great benefits will arrive, but often these claims are based more on marketing visions than proven realities. Companies must be sceptical and investigate the technology by discussing it with those who already use it. If they choose to buy and deploy new technology then they must monitor its usage.

It took many years for the successful Internet sites to get an idea of which technologies to deploy and how to use them effectively. During the dotcom boom they had the advantage that investment money was easy to come by and very cheap. This is no longer the case. Companies cannot afford to spend on technology that is ineffective and once an investment has been made it needs to be closely watched.

Q: The Government of Aragon, through Walqa, disseminates the use of Internet among the companies of the region. Do you believe that this type of initiative contributes to the boom of the new technologies? What other measures could be taken (subsidies, visits to companies…)?

Well it certainly helps in establishing new technology. The first thing that needs to happen is for the knowledge of what is happening in various parts of the world and particularly what technologies work well to be passed around. Education in this is more important than anything else.

This, by the way, needs to be cleaned of IT vendor influence. All the major vendors Microsoft, IBM, HP, Oracle and the rest, have their own agenda and tend to misrepresent and distort what is happening. All of them try to sell technology before it is mature and they often confuse the business user by making unrealistic claims.

In reality there are two areas where government can act, and in my opinion should act. The first is to encourage the development of the right electronic infrastructure to support the advanced use of Internet and related technology. At the moment this means the installation of broadband links and the proliferation of wireless technology. Anything that the government can do to make these things happen faster will benefit Aragon, and Spain, and ultimately both the Spanish speaking world and the rest of Europe.

The second is to encourage the development of a venture capital industry that will help to launch new start-ups. Venture capital oils the wheels and it is worth noting that where the venture capital industry is strong in every region of the US where the technology industry has prospered. The hot beds of technology in the US are in Silicon Valley, around Boston, Austin Texas, New York and Seattle. In all these places the VC industry is strong and there are local Universities which feed educated workers into the technology sector.

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An Interview: Business and the Internet …….End

Posted on Thursday, June 20, 2002 by Robin Bloor

Continued….

In any economic revolution, centres of excellence are established which eventually become huge generators of wealth in their own right. The government can be responsible only for providing the right soil for such flowers to grow, but if it provides the soil then these flowers will definitely grow. So the government begins by helping to disseminate knowledge and then needs to move forward by enabling the use of technology and by enabling the funding of start-up companies.

Companies respond by taking advantage of what is provided and developing successful businesses that can exploit the technology. Thus understanding develops and a virtuous circle is formed. If the government persists in this, then eventually the economic region will become a generator of technology in its own right. We have begun to see this happen in some areas of the world. Israel, Eire and India are good examples.
Until recently North America completely dominated the IT industry, but the Internet has changed a whole series of economic factors and now many other areas are favoured in various ways. Now in particular, countries that have good education systems and hence produce skilled workers have an added advantage.

Spain is in a very interesting position because Spanish is the second most common language in the world with hundreds of millions speaking it. Hence the potential Internet market based on Spanish culture is very large. Many English speaking companies will not see or even think of the potential this market has.
Beyond spreading knowledge, and enabling technology and finance, the only other thing that government can do is to encourage links between the education system and the commercial world so that the right skills are being produced amongst the young. Taken together these are the areas where help needs to be targeted.

Q: What would you like the people, who are going to attend the presentation that you are going to give at the II International Walqa E-business Meeting, New challenges for the 21st Century, which will be held in Zaragoza on 26 and 27 September, to make of all of this?

RB: We need to understand that we were born into a time of change. In my opinion the rate of technology change that is occurring cannot go much faster than it is currently doing and also there are very definite limits as to how far it can go. What is happening will not go on forever – in fact, perhaps no more than another 20 to 30 years.

There are a few things that we need to understand about what these changes bring and how they affect us. At the E-business meeting I intend to provide the audience with as much information as I can to help them see how things happen and to help them predict themselves where all this will lead. Of course, this is very ambitious of me, but if I manage to get a few people to understand a few things I will be pleased.

What I would also like the audience to come to understand is that it is not necessary to be afraid of any of this. In the near future at least, new technology is going to create new opportunities. Those who cannot prosper will be those who close their minds to it.

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