The Bloor Perspective: Net sales figures, Six Sigma and videoconferencing

Since the buzz phrase electronic commerce was invented in the mid-1990s, there have been some spectacular failures of the promise of the internet to transform business. The dot-com boom has come and gone and the majority of online marketplaces - hyped as the future of business - have shut up shop.

Yet internet sales are slowly gathering pace. Evidence from the retail travel sector in the Netherlands shows that customers are increasingly turning to online sales - and the travel companies are doing everything that they can to encourage this.

In the airline sector, a report released by Euromonitor on the travel and tourism market in the Netherlands indicated that online sales accounted for only 5 per cent of total reservations in 2001. In March 2003, KLM's CEO stated that its internet sales were experiencing double digit growth. To encourage this to increase further, its is boosting the quality of its online offerings, including enhanced customer service, and will make electronic ticketing available on all of the routes worldwide served by itself and its partners. To encourage customers to take up this service, it is offering a E5.50 discount for all tickets bought online and is cutting the ticket sales commissions that it used to pay travel agents, which previously amounted to 7 per cent of the price of a ticket.

In contrast, its competitor in the European short-haul market, easyJet, has long encouraged its customers to book tickets over the internet by offering cheaper tickets than those available if the booking is made over the phone. In 2002, EasyJet sold 88 per cent of its offerings via the net, and by 2003 that had increased to 93.8 per cent of all tickets sold. This allows it to greatly increase the productivity of its staff at the same time as providing a better service to its customers.

As their share in the market continues to fall, travel agents have been responding by increasing the amount of their own services that are accessible over the internet. But the pattern of sales indicates that there is a concurrent move towards the greater need for personalised service.

While use of the net is growing as a means for consumers to book their leisure activities, the greatest differentiator is the level of service that is offered - preferably tailored to the needs of the particular consumer. The use of the internet for sales is not about convenience alone. It is about giving the consumer exactly what they want, when they want it.

*QA Q&A*

Six Sigma is now being used to clean up IT. It is a programme and toolkit for improving quality in manufacturing processes. Originated by Motorola in the late 1980s, the Six Sigma methodology aims to reduce variations in a process - or, in other words, defects.

The term sigma refers to standard deviations from an ideal level of operation. Put simply, each level of sigma allows fewer defects than the preceding level. If a company manages to get up to six sigma, that's a mere 3.4 defects per million outputs. Think of the impact on operational efficiency and risk.

But how does this apply to your business? We are not a shop floor producing widgets, you say. But it so happens that a few resourceful CIOs are applying Six Sigma methods to the functioning of their IT departments to improve their company's processes and to provide a way of measuring performance - after all IT operations are a kind of factory, with inputs, desired outputs and parameters that must be controlled. A leading example in the financial services industry is JP Morgan Chase, where IT has applied the methodology to standardise the company's processes and measure the impact of technology programmes.

Six Sigma is about taking your IT organisation and getting it under control. Six Sigma methods work as well in reducing errors across IT operations as they do in manufacturing processes - if you view IT operations as a factory, then Six Sigma applies immediately. You have a factory and it's just data centres, networks, servers, VPN, help desks and so on.

There are various levels of achievement in Six Sigma - the highest being black and brown belt. More on that next time.

*"Sorry, you're breaking up."*

As more and more people become familiar with videoconferencing as a way of avoiding travelling to meetings, we are also becoming increasingly aware of its shortcomings. Unless the connection is of a very high quality, we get a pixilated and jittery picture of the other participants who seem to be as mentally remote as they are physically. Videoconferencing problems are worse when you are the only person not physically present in the meeting. However vibrant and dominating your personality you often feel you are just a spectator.

A couple of companies have come up with ways of improving the 'presence' of people joining a meeting remotely with solutions that seem to have more in common with Star Trek than with conventional video conferencing.

The first of these, Teleportec, lets people appear in a remote location live and life-sized within an apparent 3D environment. Duffie White invented this unique technology and founded Teleportec in Manchester in 1999.

When using Teleportec, the presenter can appear seated or standing. The remote background is removed with a reverse chroma key so the presenter appears to be in the room. This adds to the feeling of actual presence and reduces the processing load on the codec enabling a quicker refresh rate with less flicker.

The presenter sees a large video display of the audience with the same aspect ratio and the same line of sight as if they were in the same room. The presenter can communicate directly with an audience member by making eye contact and gesturing in their direction. The Teleportec Conference System is not confined to just one presenter. It can support larger workspaces and project three to five people around a conference table.

Hewlett-Packard's approach to solving the 'presence' problem is a little more direct. They have created a Mutually Immersive Mobile Telepresence system called eTravel, a surrrogate that does the travelling for you. eTravel is a mobile cart that can go anywhere a wheelchair can. It has microphones and cameras to give its operator a 360-degree view of the environment. Four flat-panel displays on the cart facing the points of the compass give a 360-degree view of the operator's head.

The operator guides the cart with a joystick using the view from its cameras. The 360-degree view and the surround sound from the microphones enable the operator to feel as if they were really there and there is no ignoring the cart when it sits down at a meeting. Like Teleportec, eTravel not only allows eye contact but also preserves gaze. The audience can tell when the operator is looking at his notes or looking at the clock so eTravel offers an approximation of a total immersion environment. Hewlett-Packard has paid close attention to preserving video colours and making sure that the image is life-sized to increase the sense of reality.

Perhaps it will be some time before we stumble over our managing director walking the corridors remotely or have them beam down but these two products show how videoconferencing may develop to capture and transmit faithfully all those aspects of our personality that we need in order to participate fully in a remote meeting.

Bloor Research is a leading independent analyst organisation in Europe. You can find out more at www.bloor-research.com or by emailing mail@bloor-research.com.