Page 43: of Maritime Reporter Magazine (June 15, 2000)

is transparent to clients. In our experi- ence, this process is often accomplished more easily when it is implemented as a series of smaller e-projects.

This offers dual benefits: it gives employees at all levels more time to become familiar with the e-process, and it also enables internal and external financial professionals to more easily measure the capital expenditures and

ROI (return on investment) associated with the implementation of an e-busi- ness program.

This matrix, however, is not limited to hardware and software development. A

Web-centric corporate culture is also vital to the success of an e-business. Top management, which bought in to the process at its first stage, should also fos- ter understanding and acceptance of the e-business model throughout the compa- ny. Transportation companies, which ignore the trends toward e-business, risk becoming commodity wholesalers to new Internet intermediaries that can analyze tradeoffs among various carri- ers' services and prices, providing the optimum shipping solution to shippers on a shipment-by-shipment basis through a single site.

These intermediaries have begun to pop up in all industry sectors, but are particularly dangerous in industries like transportation, where there is a tendency for customers to view products and ser- vices as commodities. These intermedi- aries have developed new and powerful business models that can provide ship- pers with a comparison of delivery times, costs and carriers. While many of these sites currently cater to consumers making on-line purchases, the logical extension of this trend is business-to- business trade, and entrants are emerg- ing in this space as well.

The Internet has also been instrumen- tal in developing more complete back- haul networks. While much transporta- tion business today is contractual, buy- ing groups could form on the Internet, to consolidate volume and drive prices down for the users. Over time, they could command enough volume to dam- age carriers that are unwilling to play by the new rules. The best defense is main- taining a value-added relationship directly with your customers.

The Internet allows companies to extract valuable information about cus- tomer behavior and characteristics from one centralized source. Through it, com- panies can track each page of their cus- tomers' visits, how long they spend at each site, how they navigate around the site, what orders they cancel, and what orders they eventually book.

Companies can then use this data to identify attractive customers and mar- kets, tailor new, higher-margin products, and reduce the costs of service and sales.

With this technology, transportation companies can understand and respond to their customers' behavior at a level never before possible. An e-business transformation is a never-ending process. It is a continuous evolution where the customer is the key. A well- organized e-business is one that asks what its customers want — gives it to them — and then continues to ask what they want.

Walter "Walt" Kross is md of KPMG

Consulting's Transportation Practice in

Fort Lauderdale, Fla.; Caroline

Calkins is a director in KPMG Consult- ing's Transportation Practice in Chica- go, III.; and Charles W. Gill is a partner and the national director of KPMG's

Maritime Practice in New York City.

The preceding information provided here is of a general nature and is not intended to address the specific circum- stances of any individual or entity. In specific circum- stances, the services of a professional should be sought.

The views and opinions are those of the authors and do not necessarily represent the views and opinions of

KPMG LLP or KPMG Consulting LLC.

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