[email protected]

E-Commerce@MIT

E-Commerce @MIT EDUCAUSE 2000 October 11, 2000 Bob Ferrara, Director, I/T Delivery Lorraine Rappaport, E-Commerce Project Manager Agenda - [email protected] Overview of MITs initiatives

Bob Ferrara Electronic Catalog (ECAT) demo Lorraine Rappaport What we have learned

Bob Ferrara MIT E-Commerce Goals Strategy based on MIT ReEngineering objectives from mid1990s Goals included:

Consolidate suppliers Reduce paper-based transactions Outsource lab and office supplies Leverage buying power

MIT E-Commerce Landscape Buy-side initiatives came first ECAT two generations of web ordering from partner vendors VIP Card procurement credit card SAPweb online web requisitioning No personalized portals, e-marketplacesyet Infrastructure developed

X.509 certificate authority for authentication EDI server deployed for vendor transactions SAP for authorizations and approvals MIT E-Commerce Landscape Sell-side efforts are current focus

Online ordering through Internal Providers for intra-MIT transactions Web ordering and online credit card processing for MIT merchants ShopSite for catalog development CyberCash and/or other software for

credit card processing The Museum Shop VIP Card The VIP Card is a just credit card but

MIT pays the invoices SAP receives daily batch of invoices Approvers may distribute charges Transaction history maintained in SAP and MIT data warehouse Average transactions/month: 6,000+ or

44% of all procurement transactions Average dollar volume/month: $1.2m Average transaction value: $196 SAPweb Requisitioning SAPweb is a simpler, home-grown extension of the SAP GUI screens Four functions:

Create Requisition Display Requisition List Requisitions Display PO (including payment history)

Avoided deployment of SAPgui all over campus Average number of reqs./month: 3,000+ or 25% of all procurement transactions SAPWeb Create Screen Shot SAPWeb Req.1 Screen Shot

SAPWeb Req.2 Screen Shot SAPWeb Req. # Screen Shot SAPWeb Display Req. Screen Shot

ECAT ECAT (short for Electronic CATalog) is MITs system for online ordering from our preferred vendors for commodity items. ECAT is fully integrated with our SAP R/3 system for requisitioning, workflow approvals, and invoicing.

ECAT Design Strategy Preferred vendor relationships Vendor-managed product catalogs Vendor capabilities OBI, EDI Authentication x.509 digital certificates Integration with SAP for requisitioning, authorizations, approvals, payment

processing, reporting, etc. ECAT Implementation First vendor, NECX, rolled out in February, 1999 Office Depot, BOC Gases, and VWR Scientific Products added later Average transactions/month: 2,000+ or approximately 15% of all transactions

Discussions underway with four prospective new ECAT partners ECAT demo (or following screenshots) OD main page

OD category listing OD subcategory listing OD quick order OD shopping basket OD submit

Ecat2req 1 Ecat2req 2 Req submit Displayreq 1

Displayreq 2 ECAT Design Why Not Use the VIP Card for ECAT? Many fewer VIP Cards than users with requisitioning authority in SAP (1500 cards vs. 4000 requisitioners)

Equipment purchases not allowed on VIP Card VIP Card purchases limited to $3,000 (was $500 when we started) Very limited reporting of VIP Card transactions in SAP Our prices would likely be higher as vendors would pay transaction fees Advantages of the ECAT

Model Fully integrated with SAP Modular design Familiar look-and-feel for users Takes full advantage of vendors valueadded features (e.g., MIT recommended products, MSDS, searches, etc.) Allows procurement staff to focus on vendor relationship management and outreach

Disadvantages of the ECAT Model Multiple vendor sites different capabilities and navigation Direct connections to each vendor Many components to maintain Not scalable to all vendors Back-end batch processing in SAP

and at vendor sites mean that order placement is not quite real time The Road from Here Are we having fun yet? Success measures Looking ahead Lessons Learned

Are we having fun yet? How do we measure success? Results: Achieved goals; statistical measures Relationships:

Vendors - managing relationships has high costs Internal relationships - end-user, centralized / de-centralized experience, communication, training Above all - managing the change issues Process: understand business before

technology Statistical Measures Paper 6% SAP/SAP Web 25%

Partner Flat File 10% ECAT 15% VIP Card 44%

Looking Ahead Can commercial solutions fit? Greater aggregation and coherence for customer catalog experience Individual relationships vs. catalog aggregators and marketplaces Greater influence on vendors: Emphasize de-centralized purchasing Authentication and authorizations

Standards OBI, EDI, and XML Focus and development on internal providers strategies Lessons Learned: if youre thinking of doing e-commerce E-business is just business understand your business objectives first

Dont be afraid to dabble you dont have to get it right the first time Make sure your solution is flexible enough to adapt to evolving technology and user requirements Lessons Learned: continued Interdependencies carry some risks:

Reliance on other systems and their schedules, interfaces, and support Communication and collaboration are critical to success Understand the impact of change on vendors, customers, and central

office staff Have fun. This is cool stuff. For more information Main SAPweb page: http://web.mit.edu/sapweb Main ECAT page: http://web.mit.edu/ecat

ECAT design specifications: http://web.mit.edu/ljr/www/ecat_spec.html This presentation: http://web.mit.edu/ljr/www/presentations/educause2000 .ppt Contacts

Lorraine Rappaport, [email protected], 617-253-0749 Bob Ferrara, [email protected], 617-253-7495 Appendix on emarketplaces Intriguing concept with many benefits:

Access to wide variety of suppliers Easier to add new vendors Some offerings are very expensive for buyers and sellers Integration with buyers internal systems still needs work Do they help or hinder vendor

partnerships? Appendix on XML We are hoping to experiment with XML with one or two new vendors Expected benefits:

XML should lower barriers for small and medium size vendors XML provides ability to use same data in different ways for different audiences Current limitations:

Many different and proprietary versions of XML ebXML and RosettaNet initiatives may resolve some problems Appendix on XML (cont.) The ebXML and RosettaNet consortia initiatives may resolve some problems by developing a

technical framework for for utilizing XML to exchange business data http://www.ebxml.org http://www.rosettanet.org The two initiatives overlap and are

expected to converge

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