THE EURO AND ELECTRONIC COMMERCE
LOOKING TO THE YEAR 1999
Open letter to a young business leader.
We are eleven months away from introduction of the Euro, the single
currency.
The Single Market is a widening of the commercial space: 'THE OPEN MARKET'.
The issues of competition, productivity and transactions security create new
challenges to a business leader, but:
a) - 30% of transactions still suffer in the Company from lateness, pending
files and dysfunctions that increase processing costs.
b) - The cost price of producing an invoice is still more than $20, whereas
certain financial institutions have cut the cost to $2.
c) - Fewer than 1% of companies have secure communication networks
guaranteeing the integrity and non-repudiation of messages, which are
essential characteristics for doing bulk processing, respecting task
synchronization and ensuring, in real time, settlement of flows and
traceability of operations.
d) - There are few companies that - like General Motors, British Aerospace
or Mercedes-Benz - use the Internet access to interconnect work stations
protected by security and authorization software, allowing authentication,
certification, signature and electronic record storage.
e) - There are few companies that have realised that electronic exchanges
lower the charge by 50% and increase the quality of internal procedures and
departments. Human functions concentrate on exceptional work, with higher
value added. There are fewer disputes, and the burden of proof is more
incumbent on the party violating the rules of the game.
f) - There are few companies that - in the context of the widening of
markets and of electronic data exchanges - have undertaken a cost study in
connection with the value of the communications, though it was known that
the k 8-bit byte was negotiated for less than 20 US cents with the
telecommunications operators, while certain service providers are still
billing for the electronic signature on the basis of $20 per k 8-bit byte.
g) - There are few companies that have understood that when the shift to
the single currency takes place, traceability and audit tracks will be a
legal obligation in order to manage roundings in connection with each
transaction, to pair financial instruments exactly with commercial
operations, and to bring risks and payment delays more into line with their
commercial counterparts who are concerned.
h) - There are few companies that have realised that in the context of the
Single Market and of Electronic Commerce, businesses will ensure their
security by following the good conduct codes defining the rules of the game
of the organized market between the major companies and their
subcontractors.
i) - The process of making companies aware of the Euro has focused more on
the Euro converter and on payment means. But this process should also
relate to changes in bank loans that are vital in financing supplier credit
or binding payment periods. To have a consideration and be secure, such
bank credit will be organized in Europe by way of rating functions on
invoices and by custody functions for all eligible claims giving the
commercial bank, and the national central bank if appropriate, a guarantee
of sure legal recourse.
j) - There are few companies that have understood the fact that in this
way, the Euro and Electronic Commerce have inevitably been moving the
economy toward dematerialization of invoices, at the very time at which the
infrastructure costs of secured networks are becoming accessible to the
public with the collapse of telecommunications prices.
k) - The commercial transfer (protected) in France is a model for exchanges
of electronic commercial and financial data complying with the code of good
conduct agreed between the parties (client / supplier / bank). Other
countries have made great progress in dematerializing commercial operations
to facilitate processing, cut costs and speed up risk assessment and
performance measures on a 'just-in-time' basis.
l) - Companies will have to take careful note of the new European and world
communication standards, which will provide them with access anywhere in the
world to highly competitive and reliable delocalized services.
In conclusion, eleven months from the single market, the business leader is
still realising the scope of the work he has to do. His information system
will have to operate in connection with a transactions database that is open
and protected thanks to the secured communication network between his work
stations, limiting each operator's rights and accesses to authorizations
depending on his position in the company organization.
As a reward for all these efforts, the Company is going to take part in the
Single Market in more efficient exchanges, the risks of which it will be in
a better position to measure, and this will markedly reduce costs to speed
up the Company's expansion in a more transparent and more competitive
world.
This means that the General Management will be able to correct company
action with due knowledge of the circumstances, having the management
control results available by direct reading and in real time.
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