The HMV Media Group was a natural pioneer of internet-based trading
with its customers. It is the largest specialist music retailer in
the world, with 278 HMV stores, and is also the largest specialist
book retailer in the UK, with 206 shops, most of which are
Waterstones. Group turnover was £1.3bn in the last financial
year
HMV needed to respond to competition from the new breed of dotcom
companies, such as Amazon, but also had reasons of its own for
offering web based ordering. Many of its smaller stores can only
offer a limited range of music for space reasons. With the
internet, as business technology director Duncan Bell says, "you
can offer a very wide range of products to anyone, without a very
large high street presence".
There is also, as with most e-businesses, the opportunity to
reach a wider range of customers. And internet based ordering
allows HMV to learn more about its customers' views. "This is very
important, and it is a great advantage for HMV," says Bell, adding
that "it helps us understand their requirements and expectations,
and therefore shape our future strategy."
HMV is a long-standing AS/400 user, using the platform for
business-critical applications, including stock management,
catalogue management, and all the financial applications. The
company wanted to continue using its existing technology and
expertise, and avoid the expense of rewriting its back office
systems.
HMV, therefore, teamed up with an IBM business partner, Apex
Computers. The two jointly developed the required e-business
applications using IBM's Java and WebSphere software. All the HMV
stores are now linked to their country's head office via an AS/400
using JDA software, and soon each book store will also be equipped
with an AS/400.
Another household name which uses AS/400 servers is mobile phone
company One 2 One. It operates in a highly competitive market; its
major competitors including BT Cellnet, Orange, and Vodafone.
Competition is so fierce that a phone that cost £300 five years ago
sells for £20 today.
Business efficiency is therefore paramount. "It costs several
hundred pounds in sales and marketing to attract a new customer",
says distribution and projects manager Richard Copeland. "If we
lose that customer to the competition, all we are left with is a
second hand phone of little or no value."
One of the company's current major objectives is to reduce the
turnaround time from when a phone is ordered, to when it is
delivered. Currently that is five days; the aim is to reduce it to
two.
One way to achieve this is to speed up the sales order process
for its dealers. Accordingly, One 2 One implemented a web based
ordering and tracking service for its dealers last year.
This is designed to achieve several objectives. "What we wanted
was to move towards a 22 hours a day ordering and fulfilment
model,' says Annu Uberoi, project manager for the new system. 'Just
because orders could not be taken at weekends shouldn't mean that
dealers have to wait for Monday morning to place those orders."
A second objective was to reduce the number of orders taken
manually, both to speed up the process, and to reduce the risk of
error. "We're aiming to reduce manual orders from 50 per cent to 30
per cent", says Uberoi.
One 2 One, like HMV, wanted to build on what it had got, rather
than embrace new technologies. One 2 One was a user of JBA's System
21 ERP software, and JBA had already developed e-commerce software
that met One 2 One's need, and could easily be integrated with
System 21.
Implementation began early in 1999, and was tested via a pilot
study of eight dealer groups. This took just 12 weeks to set up,
and produced a favourable response. Accordingly, One 2 One decided
to roll out the system in phases to all its dealer groups, a
process which was completed at the end of last year.
Richard Copeland is now expecting electronic ordering to grow
very rapidly until it reaches a level of two thirds of all
orders.
Financial investment companies can also see benefits in adding
e-commerce to their existing trading outlets. Perpetual Investment
Management Services of Henley has implemented an e-commerce
application which allows customers to make investments in ISAs, as
well as reviewing the value of all their investments at any time.
This is a first step towards full deployment of all their existing
transaction processing systems over the internet.
Perpetual was founded in 1974, and like HMV and One 2 One is a
long-term AS/400 user, with 800 users accessing its high
availability system at the company's Henley headquarters. Now,
according to IT director Geoff Probert, "we have transformed our
traditional AS/400 systems with a new web interface, leveraging the
skills and technologies that have proved so successful for us in
the past".
He continues: "Deploying this technology allows us to massively
increase our capacity for new business at seasonal peaks, while
improving the service to the customers."
Perpetual implemented its system in conjunction with Catalyst
Solutions. An interesting feature is that Perpetual's existing web
site was on an RS/6000: as part of the new e-commerce solution it
has been moved to an AS/400 running Domino Version 5. IBM Net.Data
is used in conjunction with Domino to support the integration with
the back office systems.
HMV, One 2 One, and Perpetual have all made the transition to
e-commerce using existing IBM software in conjunction with IBM
AS/400 specialist companies. IBM itself is keen to promote the
possibilities of the AS/400 for e-commerce. A year ago it web
enabled DB2, allowing data managed by it to be accessible via web
browsers, and so paving the way for AS/400 applications to be made
available over the web, without application conversion.
This enabling feature was introduced with V4R4 of OS/400. IBM
has recently made a number of new announcements that build on
this.
Most of the attention in the press was captured by the May
announcement of a new range of top-end servers. These are the first
products to feature silicon-on-insulator technology, as well as
copper based interconnects, in a new PowerPC processor called
IStar. This has enabled a 3.6-fold increase in performance of the
largest model, the 24-way model 840.
The announcement also contained a couple of features designed
specifically to improve e-commerce capability and performance. The
new servers support XML (Extensible Markup Language), which allows
extension of AS/400 applications to pervasive computing devices,
such as mobile phones and palmtops.
IBM has also improved the performance of AS/400 Java, claiming a
65 per cent improvement. The company followed this up by announcing
a new throughput record using the Volanomark Java server benchmark,
of over 100,000 messages a second using 200 concurrent
connections.
A few days after this announcement, IBM introduced new
e-commerce software for the AS/400. Known by the unwieldy title of
WebSphere Commerce Suite Pro Edition for AS/400 Version 4.1, it is
an integrated solution providing functionality for content
management, relationship marketing, order management, and payment
functions. It is designed to allow you to create e-marketplaces, or
to participate in existing ones, rapidly.
Capabilities include personalisation, merchandising, business
analysis and reporting, order management, and integration with
existing systems.
The significance of this product, according to Catalyst's Group
head of technology strategy Ben Schofield, is that "web-based
applications are much easier to build. You can access the AS/400
from any browser anywhere".
WebSphere Commerce Suite, which in its earlier incarnations was
known as Net.Commerce Pro, is available stand alone, or as part of
WebSphere Application Server Advanced Edition Version 3.0.2, and
WebSphere Payment Manager Version 2.1.
The latter product was itself introduced only a few weeks
before. It offers payment hosting capabilities for ISVs who want to
begin renting applications over the internet.
For the future, IBM is planning to go further still. The idea is
to map traditional AS/400 green screen applications written in RPG
onto HTML, so that the user can simply throw a switch to present
these applications to the web. Details of this development are
scanty at present, and timescales unknown.
The advantage of it is that AS/400 users will not need to
recruit staff with HTML expertise. The existing programs can be
rewritten for more effective web presentation using existing RPG
skills.
Network connectivity software company Hummingbird has also
addressed this requirement with its e-Gateway product, launched in
June. This allows legacy data existing on green screens to be
published and viewed in customised graphical screens.
According to UK country manager Chris Roper: "Many companies
have legacy systems; they're not going to throw them out. This
allows them to web-enable legacy systems, without the need to
reprogram, change their data, or rewrite their scripts".