The Internet has spawned a revolution in the way business isdone that will not ignore the energy industry. In fact, the energyindustry is among the top businesses that will be impacted by theincreased use of the Internet for all types of transactions, saidSteven Bell, an analyst covering business trade and technologystrategies service for Forrester Research.

“The Internet economy is driving what we call dynamic trade,which is resulting in a revolution in the way business works,” Belltold attendees Wednesday at the Gas Industry Standards Board’s(GISB) fourth annual meeting in San Antonio. Remarking on the paceof change in the business world, Bell cautioned those who havegrown weary of the fast pace. “You ain’t seen nothing yet, folks.It’s just getting started.”

At the heart of that fast pace, in Bell’s view, is dynamictrade. The three elements of dynamic trade will affect energy asthey will affect other businesses, if not moreso.

The first element is the eclipse of products by service. Tocustomers doing business on the Internet, whether they be otherbusinesses or individual consumers, service is just as important ifnot more important than the product they are buying. The Internetallows customers to shop around and compare prices without gettingup from their computers. In Norway, for example, the price ofelectricity is posted weekly in the newspaper. Customers can shopfor their electricity provider. The effects of this phenomenon canbe multiplied when the information is available on the Internet andtransactions can be conducted over provider Web sites.

Another element of dynamic trade is demand-driven production.On-line buyers expect quicker delivery of their purchases, and theywant products to be custom-tailored to their needs. An example of acompany doing this is Dell Computer, which custom builds computersthat its customers order over its Web site. Customers expect morefrom a Web site than just a catalog, Bell said, noting theexperience of Land’s End with its Web site.

The third element of dynamic trade is that pricing matchesmarket conditions. The energy industry has seen this with on-linetrading systems such as Altra’s Streamline and QuickTrade.

“Businesses and consumers are using the Internet for almost allstages in a business process. They’re looking for new sources ofsuppliers or new sources of goods. They’re doing comparisonshopping. They’re making purchase commitments, completing the finaltransaction. Sometimes in the bid business, they’re actuallyobtaining the service electronically over the Internet orscheduling delivery and then using the Internet to come back andtrack delivery.

“What’s happening is the entire supply chain is now involved in business on the Internet. We’re seeing a lot of business functionsstarting to move onto the Internet. From an internal standpoint,these are the different parts of an organization that now arefinding a lot of their functions, a lot of their communications tothe outside customer community and to suppliers is moving on line.”

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.