Feb 26 - Mar 1, 1998

I have been out of the country and thus not involved in your discussions but have kept up with the issues being discussed.

It is my impression that the federal government in Japan has spent a good deal of time on information infrastructure deployment across Japan and not as much time working to assist citizens with applications to encourage them to use the world wide web. The Japanese schools have a project to connect a large number of schools in Japan but I am not sure where it stands at the moment.

A project known as Digital Communities being managed by Japan Elecronic Information Development Association has been working with a number of prefectures to assist them in getting a jump start on development of an information society. These prefectures include Mie, Kochi, Iwati, etc. Projects include virtual cities, virtual universities and a project called 'Teen Age Walkers' that encourages connectivity between students in schools in Japan and the United States.

I would encourage the Japanese government to work on applications development within Japan for telemedicine, in education, health, manufacturing and the courts systems. In addition, their work in transportaiton could also be enabled by working with other countries across the web.

I would also encourage the outfront development of champions for applications development. Rep. Meida of the Japanese Diet and fellow members of the informaiton technology caucus could become outfront champions. I believe that they should work with the Governors in their prefectures who have stepped out to move their own citizens forward in this information society. The government should put up for consideration a sum of dollars that would serve to be a RFP grants program. Groups of early adapters could apply for these funds from schools, libraries, industrial companies and nongovernment organizations. Even funds could be made available for connecting the hospitals in Japan (similar to the funding by the FCC for our hospitals, due to be completed over the next two years.)

These are just some of the ideas. Maybe I can write more later. It is very late.

Following is a summary of points discussed in the parallel Japanese Online Conference.

19th February to 22nd February
The problem is not so much one of keyboards, but one of the whole PC environment.

There were many references to the special characteristics of the different classifications within EC.

Dear Colleagues,
Eric Blot-Lefevre, ECE Chaiman, would like to propose to your comments the joint text concerning the concept of global marketplace for SMEs.

GLOBAL INFORMATION SUMMIT

What are the ingredients of the 'Global Marketplace' concept?

The 'Global Marketplace for SMEs' concept evokes a huge fresco, or rather a triptych whose composition still requires thousands of brush strokes which will enrich it with details and colour. We need to be patient as we carry out the work, since creations by old masters were not completed overnight. Moreover, the composition of the work requires compliance with a method which is not visible to the general public.

There is no doubt that the WEB will provide the framework for the 'Global Marketplace for SMEs'. Already, the Internet is a major success, since it offers a universal management tool for businesses. The Internet improves point-to-point communication as compared to a standard method. The Internet liberates individuals and businesses, since it does not impose a specific standard or communication protocol. The INTERNET has a kind of 'genetic quality', instantaneously creating a favourable environment required for a borderless exchange.

The Web is like an old master painting, a triptych which secures dynamic exchanges. Moreover, these exchanges may occur in an interactive mode.

These dynamics will be enhanced with protected communications organised between standard software installed at each workstation, in each live memory, and on a great number of information networks. The global market will evolve in line with the harmonious development of these three elements of the triptych within each business. This allocation of roles is far from being insignificant, since it leads to the creation, within each business, of an architecture which is consistent with electronic commerce. Such an allocation of functions determines this architecture, since a new mode of dematerialised exchanges requires new computer and legal protection. Within this system, the workstation will offer protection, the network will provide safety and the memory will store data while complying with the necessary quality requirements. If a business organises exchanges of such quality, while relying externally on protected comm!!!!!!!!!unication platforms, the said business will cross an efficiency threshold. Let us recall that the first threshold is the access to a universal mode of communication (the Web) which offers a very competitive price, for an informal and unprotected communication mode. The second threshold is an improvement of the internal information system, through a protected INTRANET which allows for a complete management of all aspects of a transaction, without any intermediary manual entry. The efficiency due to the standardisation of messages leads to economies of scale, the reconciliation of flows, traceability, transparency and real-time management (just-in-time). The efficiency is reflected in better time management, in the synchronisation of tasks, and in instantaneous information regarding operational performance. 'Administrative just-in-time' becomes a must on the list of priorities of operational services.

For business managers, advantages are so overwhelming that there will be no hesitation to do away with paper-based management and to leap into the world of electronic data, provided however that the first stage has been implemented smoothly and that publishers of software packages as well as consultants help the business create a protected INTRANET with complete integrity and non repudiation.

The third threshold involves external INTERNET communications as a support for commercial negotiations with clients and suppliers and as a support for services entrusted to subcontractors. This threshold already requires a certain internal experience with the 'handling' of electronic data which, as you have been told, requires additional protection and safety as compared to paper-based documents. This threshold also requires that national authorities have the necessary awareness to adapt contract law to electronic media. Finally, this third threshold requires confidentiality and a uniform use of the messages in accordance with a Code of Conduct setting out basic rules and relations with reliable third parties used for certification, storage or electronic archiving of transactions made with any third parties on the INTERNET. The third threshold requires that governments take initiatives to stimulate the infrastructures of electronic commerce.

The 'Global Marketplace for SMEs' is therefore a long path, along which we shall have to learn many new things. Over the next five years, this will unavoidably bring about a metamorphosis of management and decision-making tools and the emergence of organised markets world-wide for the most commoditised products and services.

For the time being, we should see, in a first stage, a spectacular increase of exchanges in the e-consumer sector, but these exchanges are unlikely to create considerable value added. The advantages of these exchanges lie mostly in the field of ' learning ' or ' on-line assistance '.

At the same time, major companies will seize the opportunity of INTERNET to accelerate the organisational changes which provide them with greater efficiency and which will bring about substantial savings estimated to be in the range of 0.5% and 3.0% of net sales. Factoring or securitisation techniques for neutralising the effect of late payments through systematic assignment of trade receivables will require dematerialisation and the move to paperless systems, in order to meet the requirements of financial service companies which offer additional flexibility for companies willing to cross the third threshold.

Certain companies which are already more evolved will move very quickly through the second stage to enter into the third stage with their subcontractors by offering electronic commercial negotiation, governed by a Code of Conduct, which avoids disputes, delays and heavy and inefficient administrative follow-up. At the same time, public administrations and commercial banks will promote INTERNET exchanges with their counterparts in order to provide systematic information on commercial transactions to promote their traceability and to monitor risks through reliance on real-time statistics, and to facilitate settlements by use of the electronic signature or the electronic wallet.

While they are learning electronic commerce, SMEs may be confused by the new electronic commitment or settlement procedures which may be hard to combine with their own schedule for IT learning and reform. Services offered by new businesses qualified to provide assistance in the field of electronic commerce will also offer an interesting alternative to internal administrative and financial services, since their methods are more modern and less expensive.

In conclusion, let us recall the three stages of electronic commerce:

- a dynamic dialogue on the WEB: universal exchanges

- high-quality INTRANET management: organised internal exchanges

- protected multilateral management on the INTERNET: organised external exchanges.

These three stages will follow each other as protected communication platforms are developed, with an adaptation of management software and a joint preparation of the Code of Conduct to negotiate, deliver, finance and pay each party on the basis of professional standards. Electronic Commerce includes all of these ingredients. Powerful and fast electronic components facilitate this accelerated integration of management rules and increase each day the urgent need for uniformity of messages exchanged between our Businesses and their Clients.

Responding to the post by Shumpei Kumon

A few days after the opening ceremony of Nagano Olympic, I had a bad flu that lasted over 10 days. Deprived of both mental and physical energy I couldn't even lurk. In the meanwhile this electronic conference is coming to the end.

Sorry to hear that you had a flu during the earlier part of this electronic conference. I hope you have fully recovered. We missed your contributions and the interesting discussion your participation makes possible.

(...)

On my part, I was, sort of, culturally overwhelmed by the exchanges between Ronda and Howard, I mean, by the 'confrontational?' way you discuss things. So let me just make a brief intervention to their discussion about the 'relative roles, or different functions, of the private sector vs. government.'

Good that you got to look back at the conference discussion about the private sector verus government. And that you point out that the differences are helpful to discuss and that the discussion of the differences is not antagonistic or to be seen as confrontational.

I admit that some governments are (sometimes) bellicose and/or tyrannical. I also admit that private sector, particularly some corporations are greedy.

With regard to the corporate sector, I have found that there are certain interests that the managers of a corporation have to serve, and therefore they can't look at the bigger social picture. That is why other sectors of society also have to have an influence on government so that government represents a broader view of the social needs than for example the corporate sector on its own can consider.

Nevertheless, the role of government has definitely changed in this century as their prestige game lost legitimacy in the international society. Its role will continue to change in the coming century. For example, its role as the main financial sponsor of socially useful activities (such as researches) and also as the main redistributor of income and wealth will be reduced. Instead, the private sector will take up more of these roles.

Through my study of the history of the ARPANET and Internet it is clear that the private sector couldn't and wouldn't have been able to sponsor the long term research that made the Net possible.

The corporate sector must keep in mind whether a project will be profitable, while government (i.e. the public sector) can support more socially necessary and useful projects because they yield long term social benefits. Government's obligation is to provide for the health and welfare of the population, while the private sector doesn't have that same obligation.

During the period the ARPANET was being developed there were efforts to make big cutbacks in U.S. government spending for scientific research. Those online took up to discuss how this was a harmful policy and how the private sector would not and could not take up to make up for the losses that would result from the cutbacks. There is a report online of how the cutbacks were stopped.

Why do you feel that the cutbacks in government spending for research will occur and why do you think the private sector will be able to make up for the cutbacks?

I realize there are likely to be differences in Japanese and U.S. circumstances regarding these issues.

But the government will continue to be an important and ultimate constabulary force to confirm and enforce a new set of rules in the coming information society. Governments will have to collaborate globally in order to play this role successfully.

It is interesting to hear this perspective of the importance of government to help enforce rules. That, I agree is an important role of government. It seemed the use of the Acceptible Use Policy in the development of the Internet helped to set out a common set of obligations that cooperating governments and academic communities agreed to and thus were able to work together to build the Net.

The private sector in the future will consist not only of business organizations but also of NGO-NPO-type organizations and individuals.

But often NGO-NPO type organizations (at least in the U.S.) have their own narrow mandate to serve and thus can't take on to serve the broader and more long term social needs.

What do you see as the role of individuals in this situation?

In general, at least in U.S. society, individuals are relatively powerless unless they have great wealth.

People may form movements but also there are problems when the movements become more entrenched as organizations, for example in the U.S. the trade unions have become much weaker as the organizations have gotten stronger but the rights of individuals inside them to have an effect on the organization has been considerably weakened.

They are 'intelprises (intellectual enterprises)' according to my neologism in the sense that their main interest is not in accumulation and demonstration of wealth but in acquisition and exhibition of intellectual power.

Does the Net function in any way in this model you have of the future?

To stay with the previous issues a bit more, I want to give a few examples that I feel are helpful in understanding why government still must be reckoned with for those who are not part of corporate structures or other enterprises.

When the CDA (the Communications Decency Act) was passed by the U.S. Congress and signed by the U.S. President into law, there were many people online who understood why it would be harmful to the development of the Net and to their participation online. They carried on much discussion online, and took up to fight against the law. A court challenge was take up and it was soon struck down by the U.S. courts. (Also the written decision was helpful in affirming the importance of the Internet as a new means of mass communication among people and one that deserves government protection, not abuse.) If people had said we give up on government, then (at least in the U.S.) we would have been left with a harmful law impeding participation online. But it took a struggle to affect this government activity.

In a similar way, at INET '96 in Montreal, Canada, Professor Rolf Nordhagen from the University of Oslo in Norway spoke up at one of the sessions asking that the Internet Society be helpful in preventing a single company from trying to take over the Net in Norway. He was worried about the harmful effect that such commercial activity could have in Norway.

So there are concerns about how to affect both corporate and governmental actions so they won't be harmful to the growth and development of the Internet and in other socially important issues.

I have just been reading Jurgen Habermas's comments in an article 'Further Reflections on the Public Sphere' (in 'Habermas and the Public Sphere' edited by Craig Calhoun).

I was impressed by how he is trying to determine what role discussion and debate among citizens can help to influence the otherwise powerful sectors of society -- that of government and of corporate.

He maintains that by establishing a framework for public deliberation toward discovery and problem solving and discussions, it will be possible to have more socially helpful govenment decisions.

My own feeling is that it is remarkable that we live in a time when technical and social development necessitate the development of computer networks. And these networks make possible the democratic processes of discussion and Netizen (and citizen) participation that can help transform the power held by government and corporate sectors.

We are in the early stages of investigation to see whether this hope can translate into reality. The ability of those online to share their news and views is a hopeful sign and also a means to continue to develop and spread computer and networking technology.

Can you say what you see as the role of the Net and of online discussion in your formulation of business enterprises and intelprises? I wondered if it is similar to what Habermas presents as the role for citizen discussion and the recreation of a public sphere.

Also I wondered what Howard sees as the role the Net or discussion does and will play to help solve the poblems he sees with frustration with government as we have it now (at least in the U.S.) and with regard to the need he sees for leadership for the private sector.

Made on behalf of Eric Blot-Lefevre, Chairman of Electronic Commerce Europe.

Dear colleagues,
Electronic Commerce needs strong organised content to establish multilateral and cross-border exchanges. But the best technological solutions, with the increasing power of electronic components and the accelerated speed of wide-band communication networks, are not enough to establish interactive exchanges between users. A coherent regulatory framework is mandatory to integrate all present legal practices into Electronic Commerce.

Leaders of Companies, Associations and Organisations as well as those of the Public Administrations (government agencies) shall project to the future and be aware of the consequences of the digital environment of markets constituted as virtual networks as well as of the effect of the dematerialization of management operations, etc.

We would be honored to get your comments to the two attached texts, representing our ideas concerning:
- The Code of Conduct - a framework for Electronic Commerce content
- Report by the Working Group: SME's Best Practices
which will be amongst the topics discussed by the panel of Session 2 (Electronic Commerce) on 10 March afternoon in Tokyo.

CODE OF CONDUCT

Electronic Commerce needs strong organised content to establish multilateral and cross-border exchanges. But the best technological solutions, with the increasing power of electronic components and the accelerated speed of wide-band communication networks, are not enough to establish interactive exchanges between users.

The content of Electronic Commerce is one of the priorities laid down by the European Commission to ensure transparence and efficiency on the single market with appropriate services for the information society.

We have to see to installation at European Union level of a coherent regulatory framework to integrate all present legal practices into Electronic Commerce.

We also have to make all of the leaders of Companies, Associations and Organisations as well as those of the Public Administrations (government agencies) aware of the consequences of the digital environment of markets constituted as virtual networks as well as of the effect of the dematerialisation of management operations, etc.

Let us recall a few figures that should make the majority of decision-makers in the organisation field 'vacillate', - figures that are reproduced in the report on 'a European Initiative in Electronic Commerce':

'The savings that can be made if a company adopts an integrated financial management procedure on a just-in-time basis are estimated at 2 to 3% of turnover'. We also know by way of the associations that the cost of an invoice will drop from 20 ECUs to 4. SWEDEN also thinks it possible to reduce the budget devoted to government contracts by 3%.

I - Difficulties in developing the Code of Conduct

The organisation of Electronic Commerce brought about by e.Business between companies and the awareness effort initiated by the European Union to promote the new technologies and work methods in the interest of European competitiveness presuppose preparation of the content in Electronic Commerce, beginning with the Code of Conduct.

The difficulty will consist mainly in reconciling opinions and practices that, in some countries, are based on long-standing customs, and in other countries are based on laws. The second difficulty will no doubt result from the fact that laws and application decrees do not manage to or cannot evolve at the same speed as customs or practices so as to adapt to the Electronic Commerce environment.

The other difficulty encountered in considering the content of Electronic Commerce is due to the very nature of that content, which is intended to be absolutely universal, cross-border and adapted to multilateral exchanges.

The group of experts thinking about the development of communication standards introducing us to a world of interactive and multi-disciplinary secured exchanges well realise that Electronic Commerce is an extension of the EDI approach, but that it is not enough. This Electronic Commerce language must focus on the attributes of commercial negotiation and of administrative and financial management, isolating the best common denominator of such exchanges between companies. The common denominator of exchanges must be determined in the same terms as are used in the management applications applied by companies with their partners to exchange, without any converter, a contract, an invoice, a payment period, a settlement, etc.

There are already some excellent initiatives with respect to the language and preformatting of information that follow a transverse approach in selecting management of the data flows between companies and within them, with respect to which research must make progress.

In addition, the Commission intends to launch some initiatives for calibrating performance levels (studies, pilot projects) so as to benefit from practical experience with exchanges organised on a multi-directional or multi-company level. This would also make it possible to determine the needs for interoperability on a European scale and to invite management software publishers to submit their solutions for the single market.

The development of the content of Electronic Commerce governed by a Code of Conduct is relatively complex in the final analysis, because one must both find a solution for each practice and come up with a 'good breakdown' of the data so as to keep only the ones fitting the unique interpretation and format of the messages. That is the cost to be paid for effective implementation of the single market.

The EcE's role as promoter of a Code of Conduct consists in defining a method for its harmonious development on the single market by coordinating the National Associations of Electronic Commerce and Expertise with competency in business management.

The European Commission has taken a number of initiatives to encourage decision-makers, within the sphere of world Electronic Commerce, to establish and use standards facilitating, in particular, the international 'sourcing' of products and the rules of the game applied to

trans-European networks (IDA) - and for instance to government contracts (SIMAP). A Euro-management programme initiative has also been launched to promote better understanding of Electronic Commerce, aimed at Management staffs of Small and Medium-sized Enterprises (SME).

The Working Group working with 'SME's Best Practices' fits in perfectly, within the framework of this approach to organising the Code of Conduct that is indispensable to Electronic Commerce, to participate in the initiatives mentioned by the European Commission concerning 'all horizontal aspects of the single market'.

On page 37 of its report concerning 'the European initiative in the Electronic Commerce domain', the European Commission specifies that the horizontal normative aspects do indeed concern the regulated professions, commercial communications, the law of contract, accounting, fraudulent use of electronic payments, security and data protection. Here we are indeed in the fields of investigation occupied by the international organisation EcE, which does not lack skills and representativeness in all these sectors relating to management and inter-company communication.

So our goal is to come up quickly with a start to a process of standardisation that will gradually take in all of the common parts characterising, in inter-company management, exchanges between partners, individuals and administrations (agencies). The goal is also to develop a single legislative approach respecting coherence and professional pertinence, emphasising solutions that are flexible, efficient and inexpensive. That is precisely the goal set by the information society presided by Mr. BANGEMANN. Finally, these are also the guidelines laid down for the evolution of services mentioned by Mr. OREJA and Mr. MONTI on March 22, 1995.

II - Organisation of the work involved in developing the Code of Conduct

Method and 1998 budget

Document reserved for the Working Group Members

Le Comité SME's Best Practices

EcE

Synthesis of February 20, 1998

(signature)

I - How the problems of Electronic Commerce present themselves to Companies.

'In the year 2000, Internet will feed an economy of at least 300 Billion dollars', equivalent to the French budget. That statement was made by John DOERR, an advisor to Vice-President AL GORE at the White House.

This economy of the next millennium will be digital making the transition from manual operations based on paper and message systems to electronic exchanges certified by a trusted third party on standard computer supports (zero paper).

Companies and the young generations are going to find their working methods evolving quickly because of time savings (real time, interactive exchanges), economies of scale (savings on communication and intermediation), and the efficiency of exchanges (quality, transparence, cognition and security).

Technological progress, particularly with respect to electronic components, along with the fall of communication costs make it possible to equip each workstation with a larger number of functions, faster and better controlled, so as to improve each user's productivity and efficiency.

The evolution of electronic exchanges in the business field is easier to manage in that it is inspired by banking experience in the field of dematerialisation of securities and of payment instruments in the last 20 years. There is already a multitude of secured communication networks and various trusted third parties providing for certification of operations and preservation of the electronic data.

A few big multinationals, in a concern for organising their relationships with their subcontractors to improve their 'just-in-time' management and limit errors or occasional disputes, have designed standard models for exchanges facilitating their transactions with third parties, co-contracting parties and subcontractors. In particular, the take off of EDI marked their supply networks on one hand, and their sales or dealership networks on the other. Unlike what happened with banks, this industrial experience emphasised a sector approach and methodology by way of the various professions.

The banks deployed an original model of a multilateral organised market, going from a category of transactions to a multiplicity: each category attempts to standardise the data that are common to all counterparties. These are generally contractual, marketing, financial and accounting data. The specific commercial and industrial features are evacuated, in a way, into another register that does not concern the agreement on volume, price and payment date. Hence the professional characteristics are relegated to a technical file to avoid impeding the harmonisation of the universal terms of the transaction, which are indispensable for synchronisation of bulk processing. This approach, of a universal nature, explains the success of SWIFT, CEDEL and EUROCLEAR, which account for more than 90% of transactions worldwide in their field of activity. In other words, outside of their organised markets, an operator can no longer carry out a single transaction in the absence of a counterparty taking part in the advantages of security and efficiency.

The EDI world is being transformed under the influence of Electronic Commerce, the more universal solutions of which are improving company penetration of the market.

Companies live in an ever more open environment in which the tasks are extremely diversified or specialised. The only common denominator making it possible to regulate exchanges on a secured communication platform are precisely all of the elements that are non-specific and non-particular to their business. The result of this is a certain unanimity on behalf of simplification of operations that transit by way of the same commercial, accounting and financial chains, with a concern for (European) harmonisation of the management software packages, on the basis of the European directives or on the basis of international management rules. It is obvious that the restrictive evolution of the financial framework applies in a uniform way to all companies and is preparing a large part of the standardisation of management rules. It is also a consequence of the trend toward a concept of a global marketplace.

SOFT EDI is an initial response to do away with the isolation of the traditional standardisation approach by reducing the excessively specific characteristics that are responsible for the difficulties of cross-border or multilateral links, not to mention the high costs paid.

The management from end to end that is desired by companies to move closer to real time, zero paper and zero faults can be conceived only by spelling out the common points among companies in each of their management disciplines, because the diversification of their internal and external counterparties excludes any other method of standardisation, particularly of sectorial origin. Companies will have to make the effort, in organising Electronic Commerce, of designing this universal content that actually gives them the material needed for carrying out standard exchanges of management data that can transit as desired by way of the majority of their management systems or software.

Electronic exchanges in the business world, called business to business, must protect the quality of contracts by making sure that the parties to the contract have authorisations for committing themselves and their companies, until the final stage of electronic signature.

The exchanges of electronic data carrying the message content transit by way of a certifying third party responsible for application of the code of conduct between the operators and for verification of the powers authorising each person designated or declared by the company at the workstations.

The code of conduct does not relate solely to the content of the message produced in accordance with an international standard, but also relates to manipulation of the message over time between the participants that are parties to the global operation. Generally speaking, the customer and the supplier have their message sent by way of a certifying trusted third party, and they may rely on the accessory services provided by other trusted third parties that have signed the code of conduct.

Unlike the approach represented by traditional EDI, which programmed a rather bilateral type of correspondence, the universality of the message content makes it possible to involve, in one and the same transaction, several service providers located on the critical path of the operation. 'Outsourcing', pushed to an extreme degree, cannot be conceived within the periods available without network security and without the coordination of the roles played by each participant in shared time. Synchronisation of the shared tasks is guaranteed by Electronic Commerce.

Since the quality and security of the data will be guaranteed from one end to the other, on a secured communication platform shared between the customers and the suppliers, with accredited trusted third parties, the administrative data that are the common lot of all companies will be bulk processed more efficiently by specialised agencies that have signed the code of conduct. This will enable companies to benefit from the zone of organised security in order to take advantage, in an outsourcing approach, of the economies of scale resulting from centralising processing arrangements. Outsourcing is a derivative product of Electronic Commerce that will enable firms to refocus on their 'core business' by reducing their administrative management costs with perfect safety.

The code of conduct has direct effects on present working methods. It provides for precise determination of the schedule of tasks, their duration and the timing of exchanges. The efficiency of processing and the security of exchanges make it possible to concentrate tasks and to get results in ever shorter periods.

Certain strategic information results from an analysis or an explicit consolidation that may be of primordial importance to the company, of such nature as to affect its proper operation. For these reasons all of the data are considered on the basis of sensitivity criteria in connection with the budget, market share or else invested capital, so as to schedule the corrective measures provided for in the procedures handbooks. Certain such alerts may occur in dealing with a subcontractor, which entails application of a precise rule of the game to it. For instance, for a trusted third party making collections, a delay of the payment period may mean specific recourse in order to recover the value of the receivable. Another example: the solvency criteria calculated on the basis of the percentages of unpaid invoices or on the levels of agreed guarantees trigger a change of rating or of scoring in connection with the commercial portfolio monitored by a rating agency.

Hence the code of conduct may be characterised by a certain complexity in that it involves several parties in application of the rules of the game of a category of transactions.

Hence the environment of the employee, with his workstation, is going to change with management of his authorisations determining his functions, his powers, his limits and his counterparties. Electronic signature and the presence of a certifying trusted third party will indicate the shift to electronic exchanges, with possible use of the storage or custodian third party. This is not at all new to the banks, and in the final analysis it presents fewer difficulties for the user than it seems, because the trusted third party often carries out several functions.

The object of the code of conduct is to ensure safeguard of the contract under all circumstances, from the origin of the transaction until its settlement by way of payment, having the trusted third parties play their roles properly in secured networks.

Businesses are determined to get into Electronic Commerce for the numerous reasons mentioned in all experts' reports, including the one published by EcE called 'Business management in the context of the Euro and of Electronic Commerce'.

The question is how they can join Electronic Commerce without taking risks and where they want to begin.

Companies already have a precise opinion about two or three universal messages that they would like to exploit to improve application of the rules of the game, to automatically ensure settlement of flows, to upgrade their risks by monitoring in particular the commercial counterparty risk, and finally in order to monitor and enjoy an unquestionable analysis of application of payment periods. Moreover the banks and the commercial and financial rating agencies are prepared to take part in developing certain rules of the game so as to lower the cost of credit in exchange for better transparence or visibility with respect to commercial and financial statistics.

The code of conduct requires setting up a Working Group including company experts in the universal domains (contract management, accounting, finance and cash management, etc.). There are associations in all European countries that are eager to cooperate in this type of approach to harmonise exchanges. There are also resources and information in several European Commission directorates making it possible to get a better fix on practices that are sometimes very different between Member States and act as brakes on unification, standardisation and interoperability. Finally, several associations specialising in exchanges, particularly recommending soft EDI, can facilitate the work of unification and standardisation among the various methods and standards followed in each country.

The code of conduct is applied between the parties, first to the customer and to the supplier, and then to the trusted third parties involved in their exchanges. It applies to the transaction, so it is important to establish a list of universal transactions (purchase, sell, exchange, credit notice, monthly invoicing statement, equipment loan, borrowing, etc.). One should also identify the rules of the game applicable to the technical departments of the company and at the level of trusted third parties. We must remember that each technical department will be better organised and better prepared to carry out its designated tasks if, thanks to the code of conduct, it has received a role or a function that is perfectly configured on a dedicated workstation.

The purpose of the code of conduct, in its broad outlines, is to allow, as needs emerge, changes in the market and organisation of its participants, resolution of the terms of exchange on a multilateral and universal level while respecting a single methodology for development of message content.

This general framework of exchange organisation makes it possible to develop universal messages based on the same semantics as user needs emerge. The content of the messages lends itself to multilateral exchanges accessible to each company and easily interpretable in its applications or management software packages. The code of conduct is the development of messages on a universal basis making it possible to resolve the present dramatic problems facing companies because of the heterogeneous content delivered by their management applications. In particular, DG XXIII had denounced the dangers involved in this situation and recommended harmonisation of software packages in 1995 in order to get prepared for Electronic Commerce⁽¹⁾.

When mentioning Electronic Commerce, people too often forget the consequences of the integration options made possible with the new electronic components and the broad-band communication networks. These technologies make it possible to develop intelligent terminals associating powerful analysis and processing options with the peripheral memory in conjunction with the new generation of secured computer networks.

In accordance with the directive proposed by the European Parliament and the Council calling for an information procedure in connection with standards and technical regulations, it seems indispensable to us, in the interest of transparence of the internal market in the field of services intended for the information society, to develop the content of Electronic Commerce, beginning with the code of conduct.

Our international organisation EcE is particularly inclined to play this role of international concertation since it groups both the European Electronic Commerce Associations and numerous associations specialising in business management, with respect to the universal content of interest to us: marketing, purchasing, sales, risk management, cash management, credit scoring, factoring, etc.

We now have a Tonic working group called 'SME's Best Practices' which several major companies want to join. The reason is that in the Global Marketplace approach, there is an analysis of commercial practices called 'the Widened Company' which aims at improving, in an institutional way, the relationships between major companies and their subcontractors. Those persons are welcome in our working group, since they want to involve themselves in development of a code of conduct on the single market.

Needless to say, the Working Group on 'SME's Best Practices' led by Mr. Robert MAURIES and Mr. Hervé SITRUK is open. It is even desirable to strengthen the representation of Northern European countries.

The code of conduct, which gives all of its substance to the content of Electronic Commerce, brings up a cultural problem that we will certainly have to resolve together, between the nations. The fact is that one must realise that commercial rules are conceived differently, particularly as between the English-speaking countries and the countries of Southern Europe. To the former, the practices are the basis of exchange customs, whereas in the southern countries it is the law that grants a right, which is sometimes harder to manage so as to adapt to international situations, and particularly to evolve rapidly in the context of Electronic Commerce.

We are going to arrange a forum for exchanges of views on the guidelines of our Working Group called 'SME's Best Practices' so as to get everyone to take part in development of the code of conduct.

The role of the software publishers and of the service providers is of vital importance, since companies, even if convinced of the changes in practices or in customs in their exchanges, do indeed need harmonised software solutions in functional, integrated and secured networks representing their 'connective tissue'.

The code of conduct is also a means, as work is carried out and the results are disseminated, for supporting awareness actions aimed at company leaders to get them to understand their interests in the context of thorough-going changes of the information system with their service providers, their subcontractors and their end-partners. Finally, Electronic Commerce presupposes a conversion of accepted ideas, which makes some people say that it is an exercise in 'reverse-engineering-revolving'.