Cyberspace Applications

John McCann
Last update: March 20, 1995

This page contains stories of how cyberspace is being used by individuals, companies, and other organizations. I will be inserting new stories as I run across them. Please send suggested stories via email.

Wheaton Industries

Wheaton's Plastics division operates machinery that produces plastic bottles and caps. Since the machinery must operate all day, every day, malfunctions must be rapidly overcome. Solution: build a PC into the machinery that contains videoconferencing equipment (IBM Person-to-Person) so that remote support workers can diagnose and solve problems on the factory floor. "It's about getting information for manufacturing around plants as quickly as possible. ... Using the PCs' networking abilities opens the potential to get more people more involved."
Source: Tim Clark, "Business Goes Interactive: Five Markets to Watch," Inter@active Week, February 27, 1995, p. 32
Note: This is an example of using video in a situation where seeing the situation greatly improves diagnosis and solution.

Audits International

Audits International inspects restaurants using the Apple Newton personal digital assistant (PDA), which replaced paper and pencil forms. It used to take 20 days to get a report to the chain's managers; today it takes 36 hours.
Source: Tim Clark, "Business Goes Interactive: Five Markets to Watch," Inter@active Week, February 27, 1995, p. 32
Note: This is an instance of using technology to improve "time to customer."

Bergen Brunswig Drug

Bergen, the largest U.S supplier of pharmaceutical, places a Mac computer in pharmacies (on lease for $39/month) that contains a CD-ROM-based system called AccuSource through which they can place an order and send it directly to Bergen's closest distribution center. "This is using technologies at the intersection where the customer meets the selling process. ... This is an instance of systems that sell beyond the sales call, letting customers order on their own. ... AccuSource is a marketing encyclopedia system that is part of sales force automation. These systems collect product literature, price books, training guides, competitive information and other relevant data into a database. They then guide customers and sales reps through a structured sales process that both can use on their own schedules. ... Turns a sales rep from an information provider to a business analyst."
Source: Tim Clark, "Business Goes Interactive: Five Markets to Watch," Inter@active Week, February 27, 1995, p. 33

Continental Bank

"As Fran Watson arrives at her office at the Continental Bank building in downtown Chicago, she goes through the same morning routine she has followed for the past 15 years. She pulls into the same parking garage, rides the same bank of elevators to the 19th floor and reports to the same office, where she is employed as a project coordinator for the bank's telephone operations department. This morning, however, there is one noticeable difference: the company name on her office door. It now reads WilTel Communications Systems instead of Continental. Watson is just one of many corporate Americans who hold the same job but whose pay-checks now come from new sources. Outsourcing is a rapidly evolving industry that is allowing businesses to transfer all or part of corporate departments and related assets to specialty firms, which, in return, "rent" those services back to the companies for a contracted fee."
Source: Continental Bank

Ford Motor

In the early 1990s Ford embarked on a plan to become a truly global automobile manufacturer. Being global means that the firm had to break down the barriers that exist in a multinational firm that has facilities and people in many nations. To break these barriers and thus gain advantage of scale, Ford turned to computer-based conferencing technology to allow design and engineering teams in Germany, England, Brazil, Australia, and Japan to collaboratively share engineering concepts, drawings, and data. Goals for the collaboration tools included: tools had to run on the desktops (as opposed to operating in dedicated conference rooms), any group could effortlessly move from one project to another without traveling from country to county, teams could work in parallel.
Expected payoff: “save the company a few billion dollars and reduce time to market by about 40 percent.
They chose InPerson from Silicon Graphics Inc. (SGI) “because it was easy to use and ran on the SGI workstations that were already installed on each engineer’s desktop.
Source: Lee Bruno and Gael Core, "Car Talk", Open Computing, March 1995, pp. 94-97

Andersen Consulting

Andersen has been working with its clients to identify new uses of videoconferencing tools. Their research indicated that “individual people, rather than businesses, are most receptive to the idea of interactive multimedia and most enjoy the possibilities it offers.” They are working with Intel to show firms the roles that Intel’s Proshare Video System can play in their businesses. One client is “examining the possibility of creating a virtual branch bank model” which would have the following characteristics:
- It would be a stand-alone bank with mortgage advice, loan approval, and standard deposit and withdrawing capabilities.
- Videotapes would be used to help guide the customer through routine banking processes.
- Those services that require interaction with a real person would be achieved through live video.
There are many benefits to the bank:
- One person could appear in branches at one time.
- Highly trained experts could field dozens of questions per hour, as opposed to helping a few customers per hour in one branch.
- Fewer highly trained experts would be needed.
- A virtual branch is much less expensive than a “bricks and mortar” branch.
Source: Elizabeth Crane, "Seeing New Opportunities," Open Computing, March 1995, pp. 105-6.
"Andersen Consulting is in the business of helping clients change to be more successful. During the past year, we partnered with thousands of organizations around the world, including nearly two-thirds of the Global 100, to effect change that helps our clients succeed. We are organized into three major service lines to serve our clients: Systems Integration, Strategic Services, and Change Management. The Technology Assessment Group (TAG) of Andersen Consulting assists the Firm in planning for future business environments and their supportive technological changes. TAG's focus is to provide a method of assessing the business solution potential of emerging technologies, and to determine the associated implications to our clients and our organization. TAG is using scenario-based planning to facilitate this process. Scenario-based planning models the plausible futures that matter to a strategy and thus provides an excellent method of dealing with uncertainty. This Scenario Book presents the first results of our Multimedia Study. Our objective in this book is not to predict the future of multimedia, but to provide a range of plausible stories about the environment in which that future may play out. We know that we cannot eliminate all of the uncertainty that business may encounter, so through these scenarios we embrace it. The scenarios presented in this book turn on the critical unknowns of the future of multimedia -- the factors that are, to Andersen Consulting, both most important to multimedia's future shape and most uncertain."
Source: The Possible Futures of Multimedia

Motorola

Motorola has built a soft factory that receives orders for pagers via an 800 line or e-mail. A typical order: "one Sizzling Yellow pager that goes ding-dong, five in Bimini Blue that beep, ten in Vibra Pink that play a little arpeggio." The pagers for this order are never in stock; they are built on demand within 80 minutes, and the customer receives the order the same day or the next day; "Motorola thinks of the process not as manufacturing but as rapidly translating data from customers into products. ... Our vision is simultaneous manufacturing, to make the pager even as the customer talks."

Additional information about Motorola is available here.
Source: Gene Bylinsky, "The Digital Factory," Fortune, November 14, 1994, pp. 92-110.

Hughes Space and Communications

Hughes, the world’s leading maker of commercial communications satellites that are made to order, is building its own knowledge highway so that it can “leverage what we learn so we can do the job better and faster next time.” Hughes has a common problem among firms that design things, processes, or services: it forgets or “losses the recipe.” “Knowledge hard won by engineers who designed a satellite two years ago might be unknown to a team attacking similar problems today; or the new group, knowing its solution but not the research that led to it, might not see its applicability or trust the work.” The solution: “a pilot project that will connect “lessons learned” databases, using groupware such as Lotus Notes.” This database is part of the firms efforts to make its intellectual capital more accessible, perhaps through “knowledge maps that show where the knowledge of the enterprise is located. ... the purpose is to keep track of the folks who remember the recipe, and nurture the technology and culture that will get them talking. People think in terms of stories, not facts.”
Source: Thomas A. Stewart, “Your Company’s Most Valuable Asset: Intellectual Capital,” Fortune, October 3, 1994, pp. 68-74.

Skandia Assurance & Financial Services (AFS)

Skandia, which sells financial instruments from offices in ten countries, has appointed Leif Edvinsson as the corporate world’s first director of intellectual capital, with a key assignment of measuring the assets that do not appear on the balance sheet. Edvinsson works from three principles:

The value of intellectual assets exceeds by many times the value of assets that appear on the balance sheet.
Intellectual capital is the raw material from which financial results are made.
Managers must distinguish between two kinds of intellectual capital: human and structural.

“Human capital matters because it is the source of innovation and renewal, whether from brainstorms in a lab or new leads in a sales rep’s little black book. But growth in human capital through hiring, training, and education is bootless if it cannot be exploited. That requires structural intellectual assets, such as information systems, knowledge of market channels and customer relationships, and management focus which turn individual know-how into the property of the group. ... Structural capital counts most: it doesn’t go home at night or quit and hire on with a rival; it puts new ideas to work; and it can be used again and again to create value. It can amplify the value of human capital, marshaling the resources of the corporation to support a new idea.”
One approach to building structural intellectual capital is to first identify techniques and technologies that can be transplanted anywhere and then putting those techniques into software. For instance, they studied the process of recording payments in their various offices, and then created a “prototype concept -- a collection of software applications, manuals, and other structured know-how that can be easily customized to take account of local laws or support any line of financial products. The company has used similar knowledge-transfer strategies” in other projects.
Source: Thomas A. Stewart, “Your Company’s Most Valuable Asset: Intellectual Capital,” Fortune, October 3, 1993, pp. 68-74.
Note: One interesting point from this story is the notion of that there are forms of intellectual capital that does not go home at night; that can continue to produce value without the people who produced that capital. We call this a form a knowledge actionization.

Canadian Imperial Bank of Commerce (CIBC)

CIBC borrowed the structural capital concept from Skandia, and added the concept of customer capital (the strength of its franchise). To manage all of this capital, the bank appointed Hubert Saint-Onge as Vice President, Learning Organization and Leadership Development. Saint-Onge defined human capital as the knowledge and talents that employees must have (about 50) to serve customers. To help employees learn, CIBC does not put them through a training exercise but provides them with their list of “learning competencies” and makes them responsible for learning what they need to know to perform their current jobs. They do this on the job and in their branch Learning Room. The decision to abolish its training program was based upon several beliefs: “most training programs are pitched too high or too low, are delivered in classrooms to an audience that can’t put it to use now if ever, and cost the earth.”
Source: Thomas A. Stewart, “Your Company’s Most Valuable Asset: Intellectual Capital,” Fortune, October 3, 1993, pp. 68-74.
Note: This is an instance of a firm applying the concept of education on demand, a concept that is becoming increasingly popular as computers and communications merge in ways to permit the delivery of multimedia education programs to employees throughout the world.

Baxter International Inc.

Baxter has replaced layers of hierarchy with cross-functional, cross-division teams. Baxter’s CEO Bob Buckman “imagines that his firm will eventually be reinvented as an array of horizontal value-adding processes which intimately integrate Baxter with its customers.” He has built a network that “get insiders and outsiders talking to each other, day and night, in pursuit of joint problem solving. ... The most powerful people in the future of Baxter will be those anywhere who do the best job of transmitting knowledge to others.”
Source: Tom Peters, “Let the Talk Show Begin,” Forbes ASAP, June 7, 1993, p. 128
Note: Buchman’s organizational and work philosophy seems to match those of James Quinn who in the book Intelligent Enterprise: ”urges executives to imagine their companies as packages of horizontal services embedded in interf-firm ‘spiderwebs’ to create value.”

US West Communications, Inc.

Sherman Woo, the director of the highly unorthodox Global Village project, is promoting an internet internetwork at US West that would function as an alternative to the usual corporate processes, which tend to be top-down, hierarchical and stiff. Woo has identified several uses for the Mosaic-based internetwork:

Engineers could publish a World Wide Web page about recent projects and create hypertext links to pages of colleagues doing similar work.
Managers could create informal on-line dicussion forums about timely topics.
Departements coudl publish on-line documentation to a wider audience of users.
Woo estimates there are 5,000 to 8,000 users of the internal network already.

Source: Ellis Booker, "US West Champions Internal Internet," Computerworld, March 13, 1995, p. 2

Campbell Soup Company

"Campbell is venturing into the world of interactive media with a home page on the Web featuring its Godiva chocolates, and plans to introduce interactive kiosks to grocery shelves in 75 supermarkets within the next month. 'I don't think we'll ever win by selling a can of soup on the Internet,' said Gary Moss, VP-global advertising. 'It will take a great deal of experimentation before package-good companies crack the code ... of the Internet as an advertising medium.'"
Source: Laurie Freeman, "All It Took Was a Nudge -- from P&G," Advertising Age, March 13, 1995, p. S-26.

Ernst & Young

"Ernst & Young, the nation's second biggest accounting firm, is in the process of eliminating 50% of its total U.S. office space by converting most E&Y accountants and consultants into part-time telecommuters who must literally make reservations to use the remaining offices. Under a system known as "hoteling," E&Y employees in need of space must book at least one day in advance. Each office is equipped with the necessary hardware - as well as room for a few personal belongings, like portable pictures of the family."
Source: "The Age of the 'Road Warrior,'" Time, Special Issue Spring 1995, Vol. 145, No. 12