Ladies and Gentlemen: I am delighted to be able to join you here today - and to be able to say a few words on the way e-business is developing. You’ve already heard a lot of well-informed and expert opinion and I'd like to add some of my own views.
I am responsible for e-business implementation within the Royal Dutch/Shell Group of companies having volunteered about a year and a half ago to take this on in addition to my other responsibilities as a Group Managing Director.
In those days, e-business drew comparatively little attention within Shell. It wasn't that people didn’t believe in high tech tools – the energy industry is, after all, built on high technology.
But, most people back then weren't convinced that e-business was anything more than an extension of the normal pattern of development and progress.
I believe that, over the last 18 months, opinion has changed dramatically. Today many people in Shell, like me, see e-business as a step change – as a way of creating new businesses, accelerating all business processes, delivering more products and services more economically, and creating more value – faster.
Many analogies for the impact of e-business have been devised. The one I prefer is electricity. It is such a fundamental part of our environment – in this room, this hotel and the city – that we hardly ever think about it any more. Just press the switch and it is there.
It is pervasive, ubiquitous. But, it's not just the supply of electricity, it's what we do with it that makes the difference.
The same is true of e-business, the e-economy. Like electricity, it will in short order fade into the background, just become part of the furniture. It will be universal and ubiquitous.
It is already accelerating business – economic life – delivering greater choice, more opportunity. And as a result, per unit of production, fewer physical resources are consumed.
In terms of global competition, the United States seems to have a clear lead in both developing and applying digital tools - and in stimulating entrepreneurship.
Meanwhile, in Japan mobile has really caught on: just look at the growth of i-mode as an example. From a launch 2 years ago, there are now 20 million i-mode subscribers in Japan - the numbers have doubled every 4 months. And the vast Chinese and Indian markets are now opening up.
For Europe, with its large pool of skilled people, its capital resources, and its rich and deep cultures – this new stage of development offers immense opportunities.
We have entrepreneurs in Europe as well - just as in the USA - who want to take advantage of these opportunities.
But while the complexity and diversity of cultures within Europe is a great source of richness, it does not naturally lead to efficiency. We have to address the trade-off between simplicity and this richness.
We must do more to create environments where new ideas and new businesses can thrive.
Within Shell we are working very hard to tackle these issues, and to use to best effect the potential of our people all around the world.
We believe that - given the freedom, the right incentives and the right guidelines - our people will create the right products, services and deals to drive growth.
We stimulate enterprise in society through our LiveWIRE programmes in the UK, Netherlands and around the world. These encourage youth development and enterprise by advising and recognizing young people who are interested in starting their own business.
Without being too simplistic, I think a similar challenge lies before European governments. How can the pace of economic activity be accelerated to realize the vast potential of Europe in the digital age? How can the necessary changes be stimulated?
It seems to me that the distinctive contribution of the European Governments and the European Commission lies insetting the ambition level in the e-commerce arena.
How can we provide the simplicity of framework, infrastructure and rule set that promotes e-business development - without losing our richness of culture.
What does this mean in more detail for e-business? For me it means three key things:
ensuring that the single market works effectively,
providing harmonised European standards, and
promoting free market competition
I can’t be certain which policies will best bring about universal, economic access – but I can tell you what has worked for Shell.
Regulatory environments that are stable, transparent and simple are immensely attractive. Varying regulations – from area to area or country to country – impose costs – because time and attention is needed in order to adapt to them.
This applies between European countries and between regions, such as the EU and North America.
I'd like to give you a real example of the difficulties a business can face when launching a product or service over the Internet.
We have an on-line journey planner called Shell GeoStar, which operates across Europe and is available in 6 languages.
A pan-European launch of a new service is more difficult and costly for GeoStar than it would be in the USA, because of a lack of harmonisation across Europe with respect to advertising and consumer protection laws.
At present, the best way to ensure compliance with each of the local laws in Europe is to ask a consumer their country of residence when they visit our site, and direct them accordingly to the web pages targeted specifically for that country.
It makes sense to build a web site with this functionality, directing people to their language of choice and, perhaps, accepting the governing laws of that country in any contract entered into with a consumer on-line.
But it is an expensive exercise to launch and maintain such a comprehensive web site.
If it is not cost effective to dedicate web pages for each country, the business needs to make a choice of either adopting a highest common standard or not offering the service because a particular jurisdiction may prohibit it.
The concern for marketing is then that they may lose out to a competitor who is not so stringent with respect to compliance.
We see harmonisation of regulation as being critically important for EU competitive advantage, which is why, for example, that Shell is actively involved in the "Trust Infrastructure Europe" project which is addressing digital signatures.
Alongside legal frameworks, standards are also critically important. Europe’s leading role in the GSM telephone industry is an example of what can be achieved.
Set standards, keep them stable and keep them simple. Then let business get on with the job of developing and evolving technologies in a free competitive market.
In a fast-changing environment, it is almost impossible to pick which technology is going to advance in the longer term. However it is possible to identify some salient features.
First: technological advance means that businesses such as Shell are no longer multinational. They are global. This is said so often now that people just nod and don’t bother to think through the implications. The nature of digital technology dictates a global view.
Even for multinationals such as Shell, this has demanded an extraordinary cultural change. We are introducing a standard global desktop, and a standard software infrastructure for e-commerce.
Secondly: the market seems to be moving toward open standards in preference to proprietary systems. Internet protocol, XML – whichever area you consider. Proprietary systems appear to be losing ground to open standards.
Third: digital technologies will increase productivity significantly. But, they will do this everywhere across the globe. Work will flow to those parts of the world that are the most efficient and productive – not those that on the surface appear to be cheap.
Which leads me to the fourth feature: the pace of change. The process of developing new products and services takes time. These lead times are shrinking faster than ever before.
There used to be years between concept, design and first delivery. Introducing new car models used to take more than 40 months. Today, due to digital tools, some are introduced in 18 months.
Electronic services are rolled out much faster even than this. While we all need to work methodically, we cannot delay tackling the issues I've mentioned.
Our experience is that this has to be done step by step. At each stage you learn more about what you need to do next.
In this way, Shell has built up extensive experience with a range of B2B and B2C initiatives. Some sites sell products and services directly – to end users or business customers. Increasingly, for business customers, this is through dedicated extranets.
Although it is still early days, we are beginning to see paths forward. For example: we can see ways in which electronic networks can work together – automatically – to deliver desired results.
Shell is involved in a procurement site, a currency exchange site, and energy trading sites. Each is a network of buyers and sellers, reasonably distinct at this point.
But it is possible to see how entering an order on the energy site could generate a procurement order, which could demand a currency trade. These networks could work together to deliver a whole package. The possibility is there.
And within corporations, Intranets are rapidly becoming the tool for training and knowledge management. On our Intranet, the Shell Wide Web, we have introduced an expert directory.
Any Shell person, nearly anywhere in the world, can tap into this expertise, hiring people in for a period or just asking them for information.
The Shell Wide Web also contains a job market, and lots of sites promoting various schemes and technologies. It is an on-line library of much of Shell’s knowledge.
Again, as with the exchanges, it is easily possible to envisage moving from just an electronic knowledge resource to a proactive electronic tool that enables staff to work more effectively.
Already in Shell, staff are embracing these new ways of working, and we routinely use forums and discussion groups for virtual team working and knowledge sharing.
One of these, for example, is all about Diversity - a chance for staff to share opinions, discuss issues, and propose solutions - a free-flow of ideas around the Group.
Business is going to develop these technologies. We have the resources and the incentive – it is as simple as that.
But real benefits will only flow if every business, indeed every worker, every student, every household – has access, and when the regulatory framework is harmonised to promote adoption of e-commerce as part of a free market.
Complying with government regulations, taxes and data collection can be onerous for all business, both large and small.
The Internet offers real opportunities for improvement here. For example: encouraging small businesses to go online will help the development of the economy overall.
The same can apply to government agencies. Reporting and data collection can be done online more effectively and economically. And then the data can be aggregated and sliced and diced more effectively as well.
Ladies and Gentlemen, let me summarise. I see the Internet, the web, as being a fundamental enabling technology for the next stage of economic development.
The best way for Europe to take advantage of this is through the provision of a stable, simple and, at a minimum, pan-European regulatory framework.
I am delighted to see the extent of high-level Commission participation in this event. This is an excellent beginning and I hope that, together, we can make it happen.
Harry Roels, Managing Director of the Royal Dutch Petroleum Company and Group Managing Director of the Royal Dutch/Shell Group of Companies at the e-Economy in Europe conference, Brussels, Belgium.
Source:SHELL.COM
© 2001 Mena Report (www.menareport.com)
