This Week in IDEA | December 27, 2006

The Benefits of EDI

Unfortunately, some companies may view EDI as a nuisance or as one more necessity for doing business. Their view quickly shifts when they gain a better understanding of EDI and its benefits. Instead of viewing EDI as an expense, they learn to see EDI as a cost saving business development tool. With new technology and new approaches to how EDI is conducted, the cost and the time that once hindered companies have been greatly reduced.

Web based EDI systems are designed to help small to medium size businesses advance into the ever changing world of EDI.

Accuracy: EDI data is received exactly as transmitted, so you eliminate re-keying errors. As a result, you will have fewer product returns, lost orders, backorders, and credit/debit memos.
Traditionally, the manufacturing, and sale of new products and services involves a long paper trail from start to finish. Each step usually involves some sort of data entry to make the whole system match up along the way. EDI simplifies this process and makes it possible to accomplish the following:

• One-time data entry
• Reduced errors
• On-line data storage
• Faster management reporting
• Automatic reconciliation

Informed Decision Making: More accurate information leads to improved decision making procedures.

Competitive Advantage: If you are able to receive point of sales data allowing you to keep the shelves stocked while saving transaction costs for your customer, you will have a competitive advantage over non-EDI competitors. This helps build long term relationships with your customers.

Customer Service: Responding to customer needs is the key to continued long term customer relationships. EDI insures that information is accurate and readily available for maintaining a high level of service within a competitive market place.

EDI saves a lot of time and time is money. Without EDI unnecessary amounts of time are consumed in order to complete the necessary paperwork to process a specific transaction. In our fast paced world, we often overlook this fact until it’s too late…we need to allow time for the document to get from our hands to the appropriate person or department. Otherwise, customer service is jeopardized.

EDI transactions are faster, more efficient and accurate. EDI enables us to process business data up to the last minute because it is processed instantaneously through electronic transmissions. The data is transmitted in an electronic format that allows for uniform communications with all your trading partners, including customers, suppliers, carriers, and financial institutions.

Enhanced Partnership: Once you become EDI compliant, even if it may have been reluctantly induced through pressure or urging from your customers, you are the real winner in this win-win situation. EDI makes doing business with your company easier and more cost effective. This will advance you from being merely a vendor to a full business partnership where both sides work together for mutual profitability. This enhanced partnership will bring about the following:

• A reduction in deductions and credits for mistakes
• An improvement in the number of quality purchase orders
• Hours saved in paper administration and data keying
• An improvement in the speed to retail of new items, price change and promotions
• Major improvements in retail scanning accuracy

Improved Cash Flow: EDI allows you to instantly turn over invoices on purchase orders and immediately begin transmitting electronic funds transfers (EFTs) to your account. This will greatly reduce your turnaround on outstanding account receivables.

Inventory Control: EDI will decrease the cost of storing inventory because it reduces the lead-time necessary to process an order. As EDI is further integrated into the organization, you will be able to move towards a Just in Time (JIT) environment.

Labor Cost Reduction: Data entry, manual reviews and reconciliations, sorting, copying, filing documents and, most importantly, errors are significantly reduced by limiting the number of person hours involved in processing an order from bid request to invoicing.

Responsiveness: Integration of EDI with point of sale information allows you to respond more quickly to immediate changes in market conditions.

Paper and Postage: Since transactions are completed electronically, EDI will eliminate the expense of paper, envelopes, preprinted forms and postage.

Shipping: EDI communicates with bar codes that allows for tight tracking of inventory. This eliminates isolated or small shipments which could be more efficiently shipped with other parts of the order. EDI provides quick and accurate information. Better shipment planning, through a well designed EDI system, saves you time and money.

Streamlined Processes: With EDI, information is shared, human intervention is reduced, customer response is increased, and you gain the ability to respond to the market fluctuations almost instantaneously.

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The Big Upgrade

Microsoft Vista's Flexibility Has Appeal but Hardware Requirements Could Be Tough on Wallets

Now that the marketing onslaught for Microsoft’s new Vista operating system is in full swing, companies that are considering an upgrade to Vista will most likely have to present a plan to their senior management. Many will rely on information from the aforementioned marketing campaign. Companies that have been part of the BETA testing program indicated a big improvement in security but recommended that companies should roll out the transition to Vista slowly for reasons that include Vista’s beefier system requirements.

Past Windows versions made control over desktop settings an all or nothing proposition, but Vista gives users more freedom by treating each configurable element differently, for example, users can be given permission to change their system clock time but be prohibited from loading information through USB drives. This flexibility should be very appealing to companies with smaller and more time pressed IT support staffs. So should the security improvements, including a myriad of fixes to the Microsoft Windows XP holes and bugs, and a new feature called Bit locker, which encrypts local files and makes it harder to access data on a lost or stolen laptop.

According to Microsoft’s estimates, companies currently standardized on Windows XP can reduce IT labor and support costs $35 per PC by moving to Vista and about $340 per PC by upgrading to all the Vista related infrastructure products, including firewalls and Active Directory. However it’s not very likely that all companies will be able to do either because of the new operating system’s hardware requirements. Microsoft advises enterprise customers to run Vista on computers with at least 40GB of storage, 1GB of memory and a 1HHz 32 or 64-bit processor – meaning many companies will have to buy brand new computers in order to support it.

Instead of a wholesale purchase of new computers at one time most companies are upgrading hardware during a normal technology refresh cycle. Microsoft recommends that those companies doing a phased in rollouts start with laptops first, since the security benefits will be felt the most by mobile users.

There is one other area that should be considered. Since the look and feel of Vista is different that means many will end up with one additional expense – training, as it will take at least one hour of training to teach people how to use Vista.

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You've Got Junk Mail

2006 was the year of computing dangerously, however, 2007 could be worse. That was the assessment of computer security experts who said that 2006 was marked by an unprecedented increase in junk email and sophisticated Internet attacks by cyber crooks.

Few experts believe 2007 will be any brighter for users who are already struggling to avoid clever scams while and shopping on line or just surfing the web. Online criminals are getting smarter about hiding personal data they have stolen on and are using new methods for attacking computers.

One of the best measures of the rise in cyber crime is junk mail or spam, because much of it is relayed by computers controlled by Internet criminals. More then 90 percent of all email sent on line in October 2006 was unsolicited junk mail with spam messages rising by 73 percent in the past two months as spammers began embedding their messages in images to evade junk email filters that search for particular words or phrases. This is putting more pressure on network administrators and IT staff because junk mail laden with images typically requires 3 times as much storage space and Internet bandwidth as a text message. Spam volume is often viewed as a barometer for the relative security of the Internet community in part because most spam is relayed via “its” a term used to describe personal computers that online criminals have taken control of surreptitiously with computer viruses or worms. The more computers criminals control and link together in networks or botnets the greater the volume of spam they can blast onto the Internet. At any given time 3-4 million comprised computers are active on the Internet. Cyber criminals are expected to steal about $2 Billion this year with “phishing” scams that involve the use of spam and fake web sites to trick computer users to disclose financial and other personal data.

Another trend experts are seeing is the shift from of Internet criminal activity from nights and weekends to weekdays suggesting that on line crime is becoming a full time profession for many. Symantec, a top Internet security firm, reported that the bulk of attacks are now coming in Monday through Friday in the 9 to 5 workday timeframe.

The past 12 months also brought a steep increase in the number of software vulnerabilities actively exploited by criminals. Microsoft issued software fixes to 97 security holes that it classified as critical. In 2005 Microsoft only issued 37 critical updates.

Many security experts speak highly of Microsoft’s Vista their newest Windows application to be released in January 2007. However, some security vulnerabilities have already been identified in Vista including one in its new browser, Internet Explorer 7. Moreover experts believe businesses will be slow to switch over to Vista and even so Microsoft would still have to battle security holes in their legacy versions of its Office product.

Some software security vendors suspect that a new virus that surfaced last month called “Rustock B.” and viewed as on of the nastiest mal-wares ever seen may serve as the template for future malicious software.

Some symptoms of malicious software include:

• Poor computer performance, including slower response times and longer start up and shut down times
• Dramatic loss in Internet connection speeds
• Loss of hard disk space
• Web browser frequently closes for no apparent reason
• Browsers homepage resets and can’ t be changed
• New desktop icons and applications, like toolbars, suddenly appear
• Access to various computer security related websites is blocked
• Pop up ads appear even when the Web browser is closed

Suggested Antidotes:

• Install a firewall and anti-virus software
• Download security patches regularly
• Be aware of what you are installing and only download software from trusted web sites.

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Are You Using the Wrong Web Metrics?

Do you base website success on measuring the volume of visitors and page impressions? Such measures may in fact reflect the failure-rather than the success-of your website.

Just because someone is coming back to your website does not necessarily mean they had a positive experience the last time they were there. They could have felt frustrated, confused, annoyed. They could have given up, and came back again to give it one more try.

Perhaps the less we go to a software vendor's website, the more satisfied we will be as customers. Why do most of us go back again and again to such websites? To solve problems, perhaps? Wouldn't it be better if we didn't have these problems to solve in the first place?

How many visitors to your website are reflections of some weakness in the solution/product you have offered your customers? If you made better, more robust products-if you explained how they worked better-would you have fewer website visitors?

I have heard search engine optimization consultants advise keeping out-of-date, inaccurate content because it helps bring more visitors. That's like having a sign in a window advertising bananas. People come in looking for bananas, only to find a big box of rotten, blackened, stinking bananas.

In October 2005, Jared Spool, founder of User Interface Engineering, gave a speech about a study the company did on clothes retail websites. The study found that, for example, the Gap website was much more successful at selling clothes than Newport News.

The study also found that the average purchase on the Gap website took 12 pages, whereas the average purchase on Newport News took 51 pages. The more pages people looked at the less likely they were to buy.

It makes sense. You go into what you think is the right section of the website to find that pair of jeans. You find a selection of jeans to choose from, and you spend some time choosing, then you choose.

But supposing you go into what you think is the right section of the website to buy jeans, and you realize that this is not the right section. You hit the Back button, and try again and again. You're clocking up pages and you are certainly clocking up frustration, until finally you Back button out of the website.

Volume is simply not enough when it comes to measuring the success of a website. Volume can hide failure. Repeat visitors could mean loyal customers but they could also mean frustrated potential and actual customers. Lots of page views/impressions can mean customer engagement but it can also mean lost customers.

Identify the core tasks of your website. Measure how successful people are in quickly completing those tasks. Because it's not about volume; it's about successful task completion.

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