The Business Internet is the realization of the vision of a Digital Nervous
System in which information flows quickly through an organization and
is delivered to the employees who need it, helping them to respond effectively,
take advantage of new opportunities quickly, and fix problems as soon
as they arise.

The Business Internet involves five key, interrelated areas:

• E-Commerce: Practical, fast-to-market, flexible channels connect
  customers and partners online. Enhance the fulfillment and replenishment
  cycle and improve supply logistics by engaging in Web-based purchasing
  while taking advantage of just-in-time delivery savings. Smart use
  of the Internet will help reduce overall procurement costs, which
  can make up 30 percent to 65 percent of most companies’ total expenses.

• Knowledge Management: Boost employee productivity and job
  satisfaction by connecting employees more closely to the overall business.
  Doing this removes barriers to information and ensures that personal
  knowledge becomes organizational knowledge.

• Collaborative Engineering-Based Services: Use the Web to collaborate
  with suppliers and technical consulting communities in areas such
  as plant maintenance, repair, and operations (MRO); asset optimization;
  supply chain logistics; and supervisory control and data acquisition
  system (SCADA) control. Place greater emphasis on the most profitable
  and strategic areas of your business by outsourcing non-core business
  functions to a new breed of Web-based service providers.

• E-services to the Retail Market: Consider adding new services
  to your customer base to enhance revenues. Expand your customer base
  with Web-based delivery channels to new customer communities.

• Infrastructure: A long-term, end-to-end standards-based platform
  manages and ensures the return on the next generation of information
  technology investments.

• Industry-Specific Solutions: A practical, open, and flexible
  way to get the broadest choice of the right applications, software
  services, and data services for running a business – no matter what
  kind of business it may grow to be.

E-Commerce

It is very hard in the physical world to bring large enterprises, small
businesses, and consumers together simultaneously. We simulate it with
distribution networks or affiliate networks, and in the utility business,
there are distributors, manufacturers, and consumers trying to come together.
The Internet not only provides a way to conduct traditional business-to-business
buying, but it also enables distributors, consumers, and businesses to
come together in new and different ways. This will wind up benefiting
the people who set up these relationships and are able to reduce most
of the transaction costs and administrative costs in a utility company.

Utility companies have entered a new era in which accessing and managing
information efficiently throughout the Extended Enterprise is the key
to competitive success, even survival (see Figure 1). The traditional
linear production process – a “flow line” from raw materials to supplier
to engineering to production to distributor to end customer – is fast
being replaced by an interactive, dynamic, customer-driven business model.

Figure 1

The Extended Energy Enterprise. Utility companies need to make information
transparent to the supply chain. Opening up the flow of information to
suppliers, partners, and customers by using the Internet will allow a
whole new level of transactional and operational efficiencies.

This model demands real-time access to all the information needed for
concurrent decision-making at every level in the virtual organization.
We call this the Business Internet-Enabled Utility Enterprise. It can
be achieved only through the use of information technology (IT) systems
that support the integration of applications, information flow, and communication
to the fullest possible extent.

Furthermore, communication must provide a view of the entire supply chain
process to customers and partners so they can interact with greater certainty.
This is known as “transparency,” where customers can get questions answered,
such as availability and price, without being slowed by human intervention.
A supply chain that offers this kind of transparency provides “forward
visibility.” With great forward visibility, the supply chain is fully
aligned to variations in demand by the end customer, and demand uncertainties
are managed in near real time.

Today, creating any kind of a linked view of the supply chain is difficult
because it’s unlikely that your suppliers’ Web sites will work with your
website, or your distributors’ or retailers’ websites. Extensible Markup
Language (XML) technology makes it possible for data to flow easily and
seamlessly across these sites. XML turns the Internet into something that
can be programmed or customized by businesses, end users, and software
companies on behalf of end users.

This is a fundamental change – whether we’re talking about business-to-business
or business-to-consumer transactions. In both cases, a new breed of self-serving
buyer is emerging, and companies that proactively look at the way that
the Internet can enrich the interaction with these customers for better
service and reliability stand to reap the greatest rewards.

Many smaller utility service companies and utility customers are looking
to Internet portals such as bCentral (http://www.bcentral.com) to establish
and maintain transparent, linked supply chains. At bCentral, companies
can use Microsoft’s Business Internet hosting services for a broad range
of services, such as establishing an Internet presence, promoting the
business, and managing the business more effectively.

Companies that have these kinds of rich trading relationships can also
better analyze buying trends. A well-integrated procurement environment
enables an energy company to quickly see where rogue purchasing needs
to be consolidated and where to find the best procurement opportunities
(see Figure 2). Furthermore, integrated trading strengthens relationships
between partners and allows for greater flexibility in supplier selection.
Tighter relationships also allow for vendor-managed inventory and for
enhancing the fulfillment and replenishment cycle, as well as overall
supply logistics.

Figure 2

Reduce Cost by Streamlining Procurement: Utility companies can consolidate
their procurement through the Internet to both reduce rogue purchasing
and to take advantage of the newly announced trading exchanges that will
deliver auction-based products and services.

Companies can also take advantage of the recently announced trading exchanges.
Companies such as Andersen Consulting, KPMG, and PricewaterhouseCoopers
are offering packaged offerings to get utility companies quickly up and
running to streamline their procurement. Estimates by many show that an
energy company can save somewhere between 5 percent to 15 percent on procurement
costs by getting connected to the trading exchange and by bringing Web-based
procurement discipline within its operations.

Knowledge Management

Information asset management is key to success in today’s business environment.
Typically, however, information is scattered throughout an organization
and beyond. Users must roam different applications to access the information
they need. The Digital Nervous System schema is a framework to interconnect
an organization’s different information islands into a single contiguous
environment. In such an environment, it becomes simple to access information
from several sources through a single application. Users are now able
to control their activities and share information among their peers using
common application frameworks.

In such an environment, knowledge workers need tools to help them navigate
corporate knowledge stores. The Digital Dashboard is just such a tool,
a portal to multiple information sources (see Figure 3). Rather than being
a simple collection of links pointing to different information stores
and applications, a Digital Dashboard empowers knowledge workers to make
assessments and prioritize their work based on factors derived from these
information sources.

Figure 3

The Digital Dashboard, built on Office 2000, allows utility industry
knowledge workers an easy way to prioritize the display of relevant information
from different information stores, applications, and from external sources
such as operations management companies. (Image courtesy of Honeywell)

See
larger image

A Digital Dashboard not only offers a quick glance at various information
sources; it also organizes information in powerful ways, highlighting
the topics that are relevant to each worker. Based on the information
that the Digital Dashboard presents, a worker can make judgments and take
appropriate action.

In the utility environment, there are a number of knowledge worker communities
that could benefit from the Digital Dashboard. Energy traders, plant and
facility managers, transmission and distribution maintenance managers,
and executives, for example, are too busy to learn proprietary toolsets.

The Digital Dashboard permits key performance indicators, decision criteria,
and aggregate process information to be presented alongside the user’s
calendar, task list, in-box, and news ticker. Information that was previously
only available in the end-of-month report is now available in real time
using familiar tools.

Collaborative Engineering-Based Services

Great utility operations rely on the near-real-time coordination of key
technical resources such as plant managers, call-center operators, energy
traders, and field maintenance managers. These disciplines often require
input from external consultants and suppliers to make better decisions.
A Web-enabled desktop environment allows for companies to use new collaborative
tools so that these specialized disciplines can share information and
act as a team on a global basis.

Best-in-class utility companies are using powerful new PCs to utilize
collaborative operations and trading services that enable their key technical
resources and specialized external service companies to instantly coordinate
and share expertise (see Figure 4). Examples of these collaborative engineering-based
services include land data management from Tobin.com, plant and facility
monitoring/management by Honeywell’s myplant.com, and numerous specialized
maintenance applications through MRO.com. Companies that proactively use
these new services will significantly reduce their in-house costs and
achieve greater operational efficiency.

Figure 4

The scalable Microsoft Windows operating systems environment unifies
the energy industry computing network across the entire range of hardware.

Services to the Retail Market

With the Web, utility companies are in a position to offer more services
to the retail customers. Many proactive utility companies are rethinking
the interaction that they have with customers. In a customer’s mind, there
are many services that could be provided to them that would be seen as
natural extensions to paying for the core utility itself: water, electricity,
gas, and waste management. Simple versions of these services can be the
consolidation of household bills and the offering of a spectrum of financing
options.

To a very aggressive utility, the opportunity to extend rich, information-based
services into the home is now possible (see Figure 5). Through an information
link into the home, a utility company can now go much further beyond the
basic billing and financial services. It can look at new services, such
as monitoring and managing heating/cooling systems, security systems,
and even providing Web-based community services.

Figure 5

With the rich new capabilities of the Web, utility companies can offer
many new Web-based services to their customers to enhance profitability
and customer satisfaction. It is now possible for utility companies to
offer services such as MSN megaservices, Web TV, and household management
services.

The Web-based community services could be Web TV and its vast spectrum
of services, bCentral for small businesses and home-based businesses,
and MSN megaservices. The MSN megaservices are a spectrum of Web-based
services that utility companies can license and extend to their user community.
These are many megaservices that utility companies can use, including
MSNBC news, weather, Hotmail, and Expedia.

Using these megaservices, a utility can then look at itself as an Information
Utility, and quickly deliver hundreds of value-added services to its customers.

Infrastructure

To have a Business Internet-enabled IT infrastructure in utility, it
is important to have the following components:

1) Standards for interoperability between and within transmission and
distribution, the plant, and the enterprise;

2) A complete spectrum of scalable and interoperable (and now Web-enabled)
hardware from the device level to the corporate enterprise; and

3) The ability to have internal and in many cases external Internet access
to any component of the IT infrastructure.

Complete energy solutions must support integration between the plant
systems, the transmission and distribution operations, energy trading,
customer call-center operations, and production planning. Clearly, it
cannot be achieved in one blow, but it is the target to shoot for and
the underlying IT infrastructure must be designed to support it. In other
words, IT must provide an efficient, cost-effective Web-enabled computer
and communications infrastructure for universal information access.

To solve the software interoperability requirement in the energy industry,
Microsoft and hundreds of software partners during the past three years
launched OLE for Process Control (OPC) and The Windows® Distributed interNet
Architecture for Manufacturing (DNA-M). The OPC Foundation’s goal is to
ensure that there is standard interoperability between instrumentation
and control devices such as utility SCADA systems, control applications,
and back-office applications. To tie the interoperability of the process
control area to the Business Internet, the OPC Foundation has committed
its support for XML through the BizTalk organization (www.biztalk.org).

Recently, the American Petroleum Institute, in particular The Gas Industry
Standards Board, has endorsed XML and BizTalk for E-Commerce in the utility
industry. As a Web-enabling infrastructure for utility companies, the
Windows® DNA2000 framework combines the ease of use of the browser-style
interface with the power of traditional client/server applications. It
creates a highly efficient development environment for application developers
and systems integrators. Implementing a digital nervous system is now
economically feasible for utility enterprises of all sizes. It also enables
mutual sharing of functions between applications, free exchange of information
between system components, and distributed implementation of applications
across local networks, intranets, and the Internet.

This framework allows utility companies to collaborate better internally
and externally with the service community. The DNA2000 framework also
allows utility companies an expandable IT base upon which they can grow
to offer hundreds of open standards-based services as they grow to become
information utilities.

Industry-Specific Solutions

With the Business Internet, companies will have greater choice in devices,
networks, services, and partners that can develop solutions that meet
the unique needs of each business. Microsoft’s goal in the utility industry
is to support the hundreds of software companies producing thousands of
applications so customers can have the greatest choice.

Products need to be both interoperable, so that they work with an organization’s
existing systems, and scalable, so solutions can evolve and adapt to meet
changing business conditions. This means companies don’t have to start
from scratch and throw away the significant investments they have already
made in hardware, software, and knowledge.

With Windows NT Services for UNIX and with the rich capability of XML
to provide data interchange between numerous different operating environments,
energy companies can look forward to adding the Business Internet capability
onto their existing IT infrastructure. This solution improves information
sharing, reduces computing costs, and capitalizes on past investments.

The Business Internet Strategy: Getting Started to Reduce Costs

Utility companies need to quickly achieve a tight integration of their
operations with suppliers, partners, and customers. This integration needs
to go deep within the utility organization so that knowledge workers and
production operations are integrated into the extended supply chain. Microsoft
and hundreds of industry-specific system integrators can help you map
out your current business processes and help propose ways to realign these
to focus on your core competency. Streamlining your processes and integrating
your core processes into the Web-enabled supply chain will help you drive
down costs.

Selecting the appropriate technology and managing a smooth implementation
is every energy company’s dream. Decisions regarding what products to
buy and build, to enable mobile workers, to enable support in multiple
geographies and languages, to reduce IT costs, and to meet future capacity
requirements can be a daunting exercise. Microsoft and its tens of thousands
of systems integrators and software partners provide you with a vast spectrum
of choices so you can find the solution that meets your unique environment.

Delivering information throughout the extended energy value chain must
be a key component of any utility business strategy. In most forward-looking
enterprises, a well-designed, integrated information management infrastructure
is considered essential for continuous business improvement and to win
in the Internet marketplace. By giving people participating in the extended
supply chain fast access to the Business Internet, the full capacity of
human capability and ingenuity is released and turned into an effective
asset.