Internet a revenue generator, panelists say

If done right, World Wide Web services can generate revenue, attract new customers and cut costs, according to members of a Comdex panel.

The Internet is not just hype. If done right, World Wide Web services can generate revenue, attract new customers and cut costs, panelists say.

Network equipment manufacturer Cisco Systems, for example, expects to save US$250 million this year after having moved a variety of external and internal operations onto the Web.

"That amounts to a 10% increase in productivity," says Peter Solvic, vice-president of information systems at Cisco, based in San Jose, California. Solvic, speaking at a panel at the Comdex trade fair taking place here this week, says that Cisco over the past year has moved its entire software distribution and customer support organisation to Web-based applications.

"Over 80% of technical support is now done online," Solvic says. Customer satisfaction is higher, phone costs are decreasing and business is on the rise, thanks to the change, he says.

In addition, Cisco implemented Web-based product-ordering systems, processing US$250 million orders a month, Solvic says.

Allowing customers to check the status of orders online is a popular feature among the router maker’s clients. "We are getting 40,000 order-status inquires a month, which previously were all individual phone calls or faxes," Solvic says.

Some internal Cisco employee-related operations such as travel arrangement and expense reporting are now done entirely electronically via an Intranet.

Cisco is also distributing its product documentation over the Internet and on CD-ROM, saving the company US$100 million a year in printing costs.

Companies from other industries that are active on the Web report similar experiences.

"In our business we couldn’t have wished for a better medium than the Internet," says Robert DeStefano, senior vice-president of information technology at The Vanguard Group, a mutual fund investment company based in Valley Forge, Pennsylvania.

After launching a few Web-based services such as online retirement planning services this year, Vanguard plans to devote 12% of its entire 1997 IT budget to further expand its Web activities.

"That is a substantial amount for us," DeStefano says. Focusing its Web activities mainly on education and services, and less on sales and marketing, Vanguard will introduce full-fledged brokerage trading capabilities next year.

In addition to generating new customer contracts, Web-based services also can make information available 24 hours a day, DeStefano says.

Accessing and reviewing account and investment information online has proven extremely popular among Vanguard's clients, he says.

Vanguard conducted a pilot project with the University of Pennsylvania in which investment brokers walked clients through a retirement investment planning process using Web-based software and videoconferencing.

"The majority of participants preferred the online process to a phone call," DeStefano says.

Vanguard's experiments are a good example of what Web-based applications and services can deliver to customers in many industries, says Russell Harrison, vice-president and chief information officer at SITA (Societe International De Telecommunications Aeronautiques), a telecommunications group formed by airline companies and based in Paris.

"Web applications have to respond to real need and improve customer satisfaction," Harrison says.

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