Morgan Stanley · NYSE:MS
Morgan Stanley — Morgan Stanley Dean Witter — B2B/Enterprise Software Databank – September 2000
40 slides from Morgan Stanley's conference presentation, September 2000
Slide 1: Business to Business E-Commerce: Collaborative Commerce
MORGAN STANLEY DEAN WITTER Page 357 MORGAN STANLEY DEAN WITTER Business to Business E-Commerce Collaborative Commerce Chuck Phillips SUPPLIER BUYER Managing Director SUPPLIER BUYER BUYER Morgan Stanley Dean Witter SUPPLIER SUPPLIER SUPPLIER SUPPLIER SUPPLIER B2B B2B BUYER BUYER BUYER BUYER BUYER 1-8
Slide 2: Development of Internet Market Segments
MORGAN STANLEY DEAN WITTER Page 358 Development of Internet Market Segments YO UA RE HE RE nges xcha n/ io arke laborat ts E st M egation ting l Mic rise Co d Sc s ale e atio Servic arke erce r rom Bro ent/Agg re p n an Ver r-enter mm d uctu Opt ware an adca il/Co astr t tical Con Revenue Inte imiz
Slide 3: Three Key Problems
MORGAN STANLEY DEAN WITTER Page 359 Three Key Problems l Commerce is fragmented by geography which implies inefficient markets • Higher purchase costs to buyer because of inefficient markets • Higher cost to supplier to discover new customers l Interactions between businesses are complex, labor inte
Slide 4: Spatial Fragmentation of Markets
MORGAN STANLEY DEAN WITTER Page 360 Spatial Fragmentation of Markets S B B S S B B S B S Premier S Buyer S B B B S S Geography 1 Premier B Geography 3 B Seller S S B S B Geography 2 MORGAN STANLEY DEAN WITTER 7 charles.phillips@msdw.com Networks Deliver Transparency B B S B S B S S S B B B S B B S S
Slide 5: The Buyer Gets Transparency
MORGAN STANLEY DEAN WITTER Page 361 The Buyer Gets Transparency l Price Transparency • Does price vary significantly by geographic region or among size of customer • Am I getting the market price or the price I’ve come to expect l Availability Transparency • I need product now, who has it? l Supplie
Slide 6: The Vortex Brings Open Market Economics to Every Industry
MORGAN STANLEY DEAN WITTER Page 362 The Vortex Brings Open Market Economics to Every Industry Bank loan syndications Transportation services B2B marketplace for Auto dealers industrial chemicals Laboratory supply products Automotive body shop parts Pulp and paper Lab suppliers Auto and industrial pr
Slide 7: B2B Exchange Market Functions
MORGAN STANLEY DEAN WITTER Page 363 B2B Exchange Market Functions • Capacity Brokers – rid the industry of excess capacity; solves a problem and helps pricing; anonymous trading • Gray Market Facilitators – for used and resold equipment away from the original manufacturer • Collaboration Platforms –
Slide 8: The Industry Sponsored Exchange
MORGAN STANLEY DEAN WITTER Page 364 The Industry Sponsored Exchange l Faster time to market; aggregate scare resources; more attention form technology vendors l Less confusion for buyers and sellers l Common plumbing/ utility optimized for the industry l NewCo structure encourages innovation and new
Slide 9: Unbridled Price Competition
MORGAN STANLEY DEAN WITTER Page 365 Unbridled Price Competition Will the World Implode? l Evidence suggests price uniformity instead of apocalyptic collapse l Elimination of aberrant pricing l Auction data – half of wins go to the non-low bid l Suppliers have already been squeezed on price; not much
Slide 10: Open Markets can be Brutal
MORGAN STANLEY DEAN WITTER Page 366 Open Markets can be Brutal l Overcomes Spatial Limitations • Canada and Mexico still 47% of U.S. top export/import volume l Explosion in Micromarkets – forced to focus on comparative advantage l Incredible market discipline – digital audit trail; everything can be
Slide 11: Sellers Get a Few Things as Well
MORGAN STANLEY DEAN WITTER Page 367 Sellers Get a Few Things as Well l Aggregation of small orders l Centralized Market l Lower customer acquisition costs l More accurate orders; lower cost of interaction and change management l Competitive advantage will be discovered more quickly l Easier segmenta
Slide 12: Assess and Weight the Transparencies
MORGAN STANLEY DEAN WITTER Page 368 Assess and Weight the Transparencies Price Product Transparency Transparency Exchange Availability Supplier Transparency Transparency MORGAN STANLEY DEAN WITTER 23 charles.phillips@msdw.com Buying Concentration Matrix High EDI Venture Backed Number of Partners Exc
Slide 13: B2B Alternative Paths
MORGAN STANLEY DEAN WITTER Page 369 B2B Alternative Paths Architecture Choices to Reach Trading Partners Batch orders EDI/VAN Suppliers ORM supplies Public Buyer Exchange Private Dynamic Suppliers Exchange Supply Chain Private Label Firewall Exchange hosted By Specialist MORGAN STANLEY DEAN WITTER 2
Slide 14: Content Matters
MORGAN STANLEY DEAN WITTER Page 370 Content Matters l Source – find relevant content l Aggregate – consolidate for insight l Transact – support commerce l Collaborate – between design, procurement, and manufacturing l Analyze – decision support l Improve – build on knowledge and experience CONTENT A
Slide 15: Exchange Economic Models So Far
MORGAN STANLEY DEAN WITTER Page 371 Exchange Economic Models So Far l Transaction fees – usually range from 0.5% of the transaction to 3% on more complex transactions l Subscription fees –flat subscription fees for the full year on anticipated usage l Mark up – Some exchanges take the receivables pa
Slide 16: How Big are We Talking? Some Numbers
MORGAN STANLEY DEAN WITTER Page 372 How Big are We Talking …. Some Numbers l $20 trillion in revenue for all companies with greater than $500 million in revenue l External spending of this audience is $10 trillion l 65% is for direct procurement (going into end product for resale; 35% indirect (admi
Slide 17: Order Matching Won't Cut It
MORGAN STANLEY DEAN WITTER Page 373 Order Matching Won’t Cut It l NYSE volume of $7.3 trillion in 1998 l 168 billion trades l Profit of $110 million l Companies won’t pay a lot to route transactions over a free network to people they already know; l Remember, its down to 6 cents a share l Look for m
Slide 18: Collaborations – B2B Stickiness
MORGAN STANLEY DEAN WITTER Page 374 Different Paths, Same Destination Collaborative Commerce Collaborations Commerce MORGAN STANLEY DEAN WITTER 35 charles.phillips@msdw.com Collaborations – B2B Stickiness l Supplier certification -reputation l Electronic bill presentment l Application Hosting l Post
Slide 19: B2B Collaboration
MORGAN STANLEY DEAN WITTER Page 375 B2B Collaboration Lowering the Cost of Inter-Company Interactions MORGAN STANLEY DEAN WITTER 37 WWW.MSDW.COM The High Cost of B2B Interactions High cost call centers Limited hours Slow responsiveness No self help Headquarters Single language Fragmented content/exp
Slide 20: Collaborations in the Construction Industry
MORGAN STANLEY DEAN WITTER Page 376 Collaborations in the Construction Industry Architect Engineer Developer General Contractor Shippers Supplier Wholesaler Regulators MORGAN STANLEY DEAN WITTER 39 charles.phillips@msdw.com Collaborations in the Printing Industry Print Buyer Pre- Marketing Press Bro
Slide 21: Collaborations in the Aerospace Industry
MORGAN STANLEY DEAN WITTER Page 377 Collaborations in the Aerospace Industry Aerospace Company Engine Maintenance Manuf Hull Manuf Airlines Component Documentation Supplier Regulators MORGAN STANLEY DEAN WITTER 41 charles.phillips@msdw.com Collaborations in the Energy Industry Reservoir Development
Slide 22: The Common Theme: Hubs Integrate Commerce
MORGAN STANLEY DEAN WITTER Page 378 The Common Theme Point-to-Point must go to Hub-Spoke Partner Partner Partner Partner E-Hub Partner Collaborations Partner Partner Partner MORGAN STANLEY DEAN WITTER 43 charles.phillips@msdw.com Hubs Integrate Multiple Facets of Commerce Solution E-Hub Partner Manu
Slide 23: Integrating Demand and Supply Chains
MORGAN STANLEY DEAN WITTER Page 379 Integrating Demand and Supply Chains Restructuring the Chain of Commerce MORGAN STANLEY DEAN WITTER 45 WWW.MSDW.COM The Head & Tail of B2B Transactions End Customer & Distributors Suppliers C I I S D A A S Buyer Seller C M M S C M M S Intersection Of Demand & Manu
Slide 24: Blind Spots in the Chain of Commerce
MORGAN STANLEY DEAN WITTER Page 380 Blind Spots in the Chain of Commerce Buyers Resellers Distributors Demand Chain Blind Spot #1 What’s selling Manufacturer out there; what should I Inventory produce? Supply Chain Blind Spot #2 Inventory What will my customer manufacture? Suppliers Freight Carriers
Slide 25: B2B Supplier Under Stress
MORGAN STANLEY DEAN WITTER Page 381 B2B Supplier Under Stress Limited Resources… l Is this a profitable order? l What’s the incremental cost of rushing this order? l Are there substitute products? SKU inflation l Will they wait if I lower the price? l Fill or Kill option – should I kill this order i
Slide 26: The Logistical Nightmare of E-commerce Operations
MORGAN STANLEY DEAN WITTER Page 382 The Logistical Nightmare of E-commerce Operations Manufacturer Manufacturer Consumer Manufacturer Orders Customized Orders Orders Consumer Bulk Shipment International International Orders Orders Small Merchant INVENTORY CHOICES DESCRIPTION Distributor Distributor
Slide 27: E-Hub Business Models
MORGAN STANLEY DEAN WITTER Page 383 Nuts & Bolts… Real Impact from B2B Ordering Reduce order costs; increases sales per rep; Richer ordering experience; real time substitutions; pricing based on availability/quality; accurate configuration Inventory Early notice of demand; reduce overall inventory l
Slide 28: B2B e-Commerce Business Models
MORGAN STANLEY DEAN WITTER Page 384 B2B e-Commerce Business Models BUYER-MANAGED SUPPLIER-MANAGED Suppliers Buyers Suppliers B2B BUYER Buyers B2B SUPPLIER CONTENT AGGREGATORS MARKET MAKERS/ DISTRIBUTORS SUPPLIER BUYER Multi-Exchange SUPPLIER Content/Catalogs BUYER SUPPLIER B2B BUYER MORGAN STANLEY D
Slide 29: E-Hubs: The Pillars of Value
MORGAN STANLEY DEAN WITTER Page 385 E-Hubs The Pillars of Value Content Third Party Collaborations Services Commerce MORGAN STANLEY DEAN WITTER 57 charles.phillips@msdw.com Layers of Value From Exchange to Hub Demand & Supply Order One-to-One Content Aggregation Fulfillment Chain Matching Marketing
Slide 30: E-Hub Architecture: The Service Matrix
MORGAN STANLEY DEAN WITTER Page 386 E-Hub Architecture The Service Matrix Customized Views Security Services Layer User Context Management/ Member Profile Directory of Services/Rights Commerce Content Collaborations Applications Configuration Rules Repository Services Order Management Process Defini
Slide 31: The Buyer's View of the Procurement Landscape
MORGAN STANLEY DEAN WITTER Page 387 The Buyer’s View of The Procurement Landscape Supplier Supplier g talo Trading Ca yer Exchange Bu Multi-vendor to Supplier's ect nn Catalog Co Web site ect Dir Di Buyer’s Network Firewall rec Supplier tW eb Buyer’s Sit eO Proprietary rd ns er Catalog Traditional s
Slide 32: The Report Card
MORGAN STANLEY DEAN WITTER Page 388 A Back Office Disconnect Internet Trading Exchange Buyers Suppliers ??? ??? ??? ??? ??? ??? Back Office Back Office MORGAN STANLEY DEAN WITTER 63 charles.phillips@msdw.com The Report Card Ariba Oracle SAP C-One I-2 Real Time Bid Ask A - - C - Content Mgmt B C C B+
Slide 33: Anatomy of a Web Site Order
MORGAN STANLEY DEAN WITTER Page 389 Anatomy of a Web Site Order Identify Prospects Orchestrate Promotions Refresh Content MicroStrategy E.Piphany Vignette 1) Broadbase Interwoven Hyperion Find Exchange Apps Documentum E.piphany Customers Prime Response Broadbase Show Personalized Monitor Online Conf
Slide 34: B2B Exchanges – They Need the Backend Info
MORGAN STANLEY DEAN WITTER Page 390 B2B Exchanges – They Need the Backend Info Price Available to Promise Capable to Promise Internet Buyer Transportation route Trading Exchange ? ERP Distribution alternatives Substitutions Valid Configuration MORGAN STANLEY DEAN WITTER 67 charles.phillips@msdw.com
Slide 35: Enterprise Apps Lose Functions to Portals
MORGAN STANLEY DEAN WITTER Page 391 Enterprise Apps Lose Functions to Portals Now Future? 4 Walls of Community The Enterprise Full Shipping Portal Accts Payable filment Payroll Accts Receivable Shipping Inventory Planning / 4 Walls Walls of of Gen Ledger The Enterprise MRP Scheduling Order Entry Tar
Slide 36: Conclusions/Themes
MORGAN STANLEY DEAN WITTER Page 392 Dynamically Linked Content Community Application Services Partner A Partner D Web page Partner B Partner E Partner C MORGAN STANLEY DEAN WITTER 71 charles.phillips@msdw.com Conclusions/Themes MORGAN STANLEY DEAN WITTER 72 WWW.MSDW.COM B2B/Enterprise Software Datab
Slide 37: The Chain of Commerce in the 21st Century
MORGAN STANLEY DEAN WITTER Page 393 The Chain of Commerce in the 21 st Century l Collaborative, project-based manufacturing and services l Each partner a value-added node in the chain - contributing content, knowledge, and specialized services l Flexible, transparent channel responsive to market con
Slide 38: Key B2B Conclusions
MORGAN STANLEY DEAN WITTER Page 394 Key B2B Conclusions l E-hubs enable partners to closely synchronize operations; restructuring of demand and supply chain; process transparency and real time fulfillment l E-hubs could lead to billions of inventory reduction; lower transportation costs; lower capit
Slide 39: What Can Go Wrong? Top 10 B2B Conclusions
MORGAN STANLEY DEAN WITTER Page 395 What Can Go Wrong? l Look but don’t book buyers; transaction done offline l Content takes time to clean up and load l Inadequate payment systems l Lack of sourcing capabilities l Lack of supply chain and back office integration l Brick and mortar companies can do
Slide 40: MORGAN STANLEY DEAN WITTER
MORGAN STANLEY DEAN WITTER Page 396 B2B/Enterprise Software Databank – September 2000 Please refer to important disclosures at the end of this report.
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