# Presentation: 086531

## September 26, 2001
G2B conference 
Washington, D.C. 

Tim Clark 
FactPoint Group
650 559 2110tclark@factpointgroup.com 

**B2G Lessons from B2B Commerce**

** ****Copyright 2001 The FactPoint Group**

- September 26, 2001
- G2B conference
- Washington, D.C.
**Tim Clark **
**FactPoint Group**
**650 559 2110**_**tclark@factpointgroup.com**__** **_

## About Tim Clark  

**Partner, FactPoint Group, Los Altos, Calif. **
**Editor, B2Bwatch, email newsletter.**
**As analyst, followed Net Markets for Net Market Makers. **
**As analyst, wrote supplier-oriented piece on selling to government for Jupiter Media Metrix. **

## Past Advice to Suppliers

**Concentrate on state, local agencies first. (Easier process, greater potential)**
**Join networks that give access to multiple government entities**
**Feds should drive single standard**

## How Business Views Government

**Procurement driven in part by non-economic factors**
**Complex, varied buying instruments **
**Late adopter of technology**
**Difficult to do business with, so many don’t bother **
**Slooooow processes **

## But B2G Could Boost Industry View

**Tech firms hope government IT spending will hold up in tough times**
**Businesses would gain from easier e-government processes, information, sales **
**As taxpayers, see online processes as providing best bang for buck ****	**

## Why B2G Will Be Harder than B2B 

**More stakeholders in public sector than private**
**Business considerations aren’t the only factor **
**Work cultures harder to mold in large organizations **
**Sustained leadership more difficult  **
**Outside misperception that federal and state governments are monolithic **

## Where B2B e-Markets Work

**Commodities: Chemicals, energy, agriculture, financial products**
**When e-markets help workers, not just managers**
**When online interactions make existing business practices easier**
**When B2B processes impose new (and better)  business practices**
**Auctions for surplus goods **
**Reverse auctions for commodities **

## Where B2B e-Markets Didn’t Work

**Too much focus on transactions only **
**Too much emphasis on transaction fees  **
**Pure catalog aggregation**
**Required too much behavior change **
**Failed to include a buyer’s favored suppliers **
**Internal governance issues (industry-sponsored marketplaces) **
**Business failure, competition  **

## B2B Trends to Watch 

**Revenue models **
**Signing on suppliers**
**Collaboration**
**Portals **

## Transaction Fees are Going or Gone 

**Subscription fees—predictable costs.   **
**Extra fees for additional services**
**Transactions are only part of the process   **
**GSA will eventually drop online transaction fees. Do it sooner, not later**
**Keep fees on GSA paper transactions to boost use of GSA Advantage online **
**After pushing suppliers to costly e-catalogs,  GSA should incent agencies to buy online **

## Getting Suppliers Online is Difficult 

**Coercion works well**
**Tools for converting online catalogs for government (and private) hubs are lacking **
**Data translation services can be costly **
**Seek domain experts for specialty markets**

## Seek Collaboration, not Transactions

**Cost savings, more-efficient processes result from sharing information, forecasts, future needs **
**Project management of complex operations**
**Supply chain collaboration/monitoring **
**Product design collaboration **

## Portals are the Right Metaphor

**Focus on users, tasks they want to do**
**More stakeholders make government portals harder than corporate portals**
**Pursue federal, state interoperability  based on tasks. **

## Other B2B Lessons 

**Big companies prefer Private Trading Networks, not public exchanges. **
**Business processes are key. **
**Killing the middleman didn’t work. **
**Make two sales in every companies—Executives and people who do the work. **

## Specific B2G Issues 

**Timing **
**Schedule sharing **
**Security **
**Standards**

## Turn Late into a Government Asset

**Skip the ERP era **
**Add Internet technologies to EDI **
**Learn from private sector experiences **
**Start with information, move to interaction **
**Adopt best practices from B2B experience **
**Partner with private-sector leaders **

## Share Purchasing Schedules

**Agencies, suppliers win from simplicity. **
**States in strategic position to push initiatives for lower government levels**
**Feds share with states—no-brainer even with constitutional issues **

## Security is Achievable 

**Early federal interest in PKI projects  **
**No perfect security, so expect breaches **
**Digital certificates—prized but difficult **

## Government Can Advance Standards

**Huge potential for government to lead, but CIOs must reach consensus or have it dictated **
**FDA’s standardizing on PDF format for applications boosted usage among pharmaceuticals **
**XML—Early but critically important **
**Don't let software vendors dominate standards **
**Ideal: Single commercial/government standard**
**Back-up: Support at least one common protocol**
**Let feds drive standards for state, local **

## Web Services: A Technology Boost to Portals? 

**Promise: Simple tools to link Web applications **
**XML-based Web services today are technologists’ toys**
**Linking applications inside firewall will come first **
**Integrating applications with partners will follow **
**Real power will come when business users can create new applications or features without IT support**
**Could be custom-made for government portals **

##  
Start with routine tasks with high benefits to users, not necessarily those with the largest returns
Early adopters don’t expect immediate returns. See portals as strategic 
Executive level support mitigates most non-technical challenges.
Portal rollout is gradual. Introduced first to close partners, customers and Web-savvy employees
Make adoption mandatory. Remove the old way, train users on new
Two biggest challenges: Consistent look and feel, getting enterprise-wide buy-in
Share responsibility for governing, maintaining portal between IT and functional units  
Successful portals require executive support and a standard corporate IT infrastructure

**Start with routine tasks with high benefits to users, not necessarily those with the largest returns**
**Early adopters don’t expect immediate returns. See portals as strategic **
**Executive level support mitigates most non-technical challenges.**
**Portal rollout is gradual. Introduced first to close partners, customers and Web-savvy employees**
**Make adoption mandatory. Remove the old way, train users on new**
**Two biggest challenges: Consistent look and feel, getting enterprise-wide buy-in**
**Share responsibility for governing, maintaining portal between IT and functional units  **
**Successful portals require executive support and a standard corporate IT infrastructure**

**Portal Research Findings from Private Sector**

**Notes:**
Research involved Compaq, Hewlett-Packard, Cisco, Daimler Chrysler, Herman Miller

## Portal Lessons, Recommendations

**Drive enterprise-wide standards. **
**Get executive-level buy-in but don’t wait for organizational consensus. **
**Involve both IT and line of business folks. **
**Be ready to deal with backend integration. **
**Everything looks easier than it really is.**
**Don’t be afraid to fail, but learn lessons. **

## In Summary 

**Portal strategies work**
**Transaction fees will give way to subscriptions **
**Standards, shared purchasing schedules boost critical mass**
**Web services allow government to leapfrog private sector**
**Start with quick, high-value activities that improve business processes **

## Thank you.  

**Thank you.  **

** ****Copyright 2001 The FactPoint Group**

**Tim Clark **
**FactPoint Group**
**650 559 2110**_**tclark@factpointgroup.com**_