Why Corporate Communicators Need to Look Closely at the Internet

Why Corporate Communicators Need to look Closely at the Internet

[Internet Experiences - Global Public Affairs Institute Symposium]

On 11/13/97, in New York City at 55 Broad St., The Global Sandbox, Mike Reilly spoke to public affairs officers.

These are his speaker's notes:

Where is the Net Today?

Here are some observations:

The first phase of experience with the graphical Internet (WWW) use is ending.... its been about three or four years.

We are moving into a time of rapid adoption of the medium by those who have found its values. At the same time, those who have held back are now able to learn about the Internet in well-structured ways which match their notions of how business tools should evolve.

Dick Lewis, our luncheon speaker, will touch more deeply on this.

Lessons of the "Early Days"

So, What has been the experience in Public Affairs in this set of very "early days?"

-Generally, limited response from senior management and line managers...

-some have discovered poor web development; Johnny-come-latelies and garage-shop code writers...who teamed with what my British colleagues freely refer to as "hacks" to offer their services. Many of us have been burned...

-but with this, and other dark moments, we have sharpened our understanding of the pluses and minuses of net-based communications. Some practitioners are staying with the leading edge -- which moves very rapidly. Indeed, we will see examples of these today.

Others ... are still coming to grips. Melding this medium with traditional public affairs practice, and that with brand protection, cooperative work groups, shared information, dynamic value chains and a host of other company imperatives: tighter feedback loops, ever-shrinking cycle times, doing more with fewer resources, grinding out economic value-added....

Public Affairs Net Issues

Meanwhile, certain parts of the business are gaining benefit from use of net technologies. And as they do, the public affairs people need to have a clear understanding of what is happening.

Moreover, as the lights go on with the laggard line managers....in the top management office, even, dare we believe it, in the board room -- public affairs folks need to show they too can gain... if not equally, at least relatively, by using net technologies.

Today we will explore how some practitioners have done that...

Then, this afternoon, you will hear from senior people in the media how the press is using the net -- a key constituency for communicators.

Investors on the Net

Let me add another tale: about investors, an audience I have done a lot of work with.

All the major brokers are putting up ways for investor to look at information. Others are being more aggressive, adding direct research and portfolio account access, now or very soon.

A study just disclosed last week by the Waters Information group to its clients shows that in a sampling of 91 investment managers contacted in October,

89 per cent said that they had

used the WWW in the past three months

"as a source of information

USED in investment decisions."

Let me repeat that (REPEAT)

Now, let me cite just a couple of other things...and some statistics that are perhaps a bit more meaningful than what pops up in the daily press...

Success Stories

A couple of examples of bottom line success?

CISCO

The chief information officer at Cisco Systems, Peter Solvik, told a seminar in New York last week that by using Internet technologies Cisco:

- saves 85 million dollars a year by making electronic... marketing and software materials formerly published and mailed;

- saves 24 million dollars a year in hiring costs

- saves 250 million dollars a year by handling customer support Online

- has two billion dollars worth of orders -- nearly a third of annual revenue -- handled electronically (e-commerce).

Another example, General Electric -- the most money-making company in America.

GE moved quickly after it found a couple of years ago that Internet-based buying produced savings of up to 20 per cent in materials costs, 30 per cent in procurement process cost and a 50 per cent reduction in cycle time.

The have now announced that all 12 of the company’s business units will move procurement onto the net by the year 2000 -- a business volume of at least five billion dollars per annum (some say as large as 30 billion!!)

This success prompted the GE Information unit to start selling the process outside to the likes of Textron and Hewlett Packard, who are now racking up their own huge savings by using the system, dubbed the Trade Process Network. Saving millions of dollars...on the Internet.

This is not some fly-by-night thing! These are only two corporate stories of huge success using the net and its technologies. Other speakers today will tell you of more...

These raise those questions we seem to hear repeatedly about security, reliability. Believe me -- these are non-issues, at least in these applications... You don’t really think Jack Welsh would risk his business in an unsecured, unreliable environment, do you?

What's Happening

Let me now turn to some of recent surveys and statistics you may have not focused on. Just some points of interest... Draw your own conclusions.

- Lou Gerstner of IBM told the Securities Industry Association last week that their entire business -- that of Merrill Lynch, PaineWebber, Donaldson Lufkin, Smith Barney, etc., etc. -- will be conducted on the net within five years. Amazingly not one brokerage chief executives attending spoke out against this view.

Where did that come from? Did any of those guys have an inkling five years ago?

- An Ernst & Young survey in June reports 85 per cent of all US banks will be doing transactions... transactions... on the Internet within 18 months.

- Overall use: Last week, Nielson-I/PRO released an index which will be used each month to track web site traffic. It shows that in the first ten months of this year, traffic has risen 110 per cent. You will have heard other stories of usage dropping off. This is a traffic measurement of high quality -- keep an eye on it. (www.cyberatlas.com)

- Yesterday, The Wall Street Journal wrote about a study by Frank Luntz, a Republican poll-taker. He studied what he calls "Connected Americans." People who use the net, have email, are happy at a keyboard -- about 8-1/2 per cent of the adult American population... the adult population ...never mind the next generation coming into your businesses...

This group of "Connected Americans" are NOT, he found...NOT as switched off to political action, as the popular press.... and not a few "experts"... have led us to believe...

This group -- by the way, 37 per cent of whom are NOT kids - they are in their 40s -- is growing rapidly. This group, Frank Luntz found, is politically active, and therefore, is becoming a political force.

As public affairs managers, you know what a political force can do. And they will use the Internet to do it!!

Thank you very much.

(END PRESENTATION)