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Digital Imaging, Document Delivery and the United Parcel Service Wednesday November 4, 1998 Susan Chapman Eduardo Gonzalez Nina Lee Andrew Robertson Jean-Christophe Roux 288,000 This is the number of packages weighing less than 2 pounds that UPS delivers everyday.
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Digital Imaging, Document Delivery and the United Parcel Service Wednesday November 4, 1998 Susan Chapman Eduardo Gonzalez Nina Lee Andrew Robertson Jean-Christophe Roux
288,000 • This is the number of packages weighing less than 2 pounds that UPS delivers everyday. • It is also 30% of UPS’s revenues ($6 billion). What if email, which is fine for most of those documents, takes the business away? • The small package segment is already a competitive nightmare. FedEx has a strong 56% market share in this segment.
UPS Document Exchange • UPS OnLine Dossier • UPS OnLine Courier • Same idea to carry document through the Internet • But Dossier offers a higher degree of security
Before analyzing the marketing, strategic and competitive sides of UPS Document Exchange, let’s have a look at...
We will focus on: • The main consumer-related specifications that have driven UPS technological choices. • The technologies that UPS chose to meet those specifications.
The main specifications that drove UPS technological choices • Universality • Simplicity • Reliability • Security
Universality • Must be available everywhere • Must be sender-driven • Must handle various business applications • Simplicity • Must be intuitive and user-friendly • Must NOT imply new IT expenses
Reliability • Must inspire a high degree of confidence • Must deliver any digitized material • Must eliminate physical components • Security • Must verify identities of sender and receiver • Must be tamper proof • Must be trackable
To meet those specifications,UPS . . . • Made the obvious choice of the Internet (universality and simplicity) • Allied with AT&T to benefit from its Internet backbone (reliability) • Allied with leaders of the On-line delivery business (simplicity, reliability and security)
The technologies that are used • Step One: Have the document digitized • Step Two: Send the document • Step Three: Receive the document
Step one:Have the document digitized • Usually, the document is already on the computer • But if that is not the case, we may need to scan the document
Send the document • This is the core the UPS Document Exchange service • We will focus on its major feature: high degree of security
A little technical up-date! • Digital Certificates • Identification and functional role • The Certificate Authorities • Digital Signatures • Guaranty the sender is the appropriate person • Guaranty the contents were not altered • Cryptography Primer • The digital envelope: secret and public keys
Public Key Cryptography“Only the appropriate receiver can open”
Public Key Cryptography“The recipient is sure of the sender’s identity”
Digital EnvelopeCryptography • The trouble is that Alice and Bob must agree on the keys and someone may intercept their “agreement”. • Do you have a solution? • Yes, the solution is: • “Only the appropriate receiver can open” the document • “The recipient is sure of the sender’s identity”
UPS uses this idea of Digital Envelope to secure the transportation of the document over the Internet. • This process is designed by • NetDox for OnLine Dossier • Tumbleweed for OnLine Courier • We are going to look at the NetDox solution
Another three-step approach • Step 1: From the sender to UPS • Step 2: UPS in action • Step 3: From UPS to the recipient
To address theuniversality constraint • We need formats that are standards: • For text: pdf • For image:jpeg • For video: mpeg • We focus on pdf
Pdf format • Portable Document Format • Developed by Adobe (Acrobat software) • Main features by other document formats • Cross Platform • Navigational • Ultra-Printable • Ultra-Viewable • Smaller.
What’s the Product? • It’s fast, • It’s easy to use and safe to use. • It’s versatile.
Who are the targeted customers? • Law Firms • Medical Care Providers • Banks • Insurance Companies
Cost Comparison • Documents Letter Fax Doc X • 1 Cost $4.44 $6.23 $3.17 • 10 Cost $9.62 $17.5 $3.17 • 100 Cost $61.43 $130.1 $3.17 • UPS Online offers the potential for dramatic savings for its customers.
Pricing • Volume Based Discounts within North America • Monthly Transactions Dossier Courier • 1-99 $7.00 $2.50 • 100-299 $6.30 $2.25 • 300-999 $5.60 $2.00 • 1,000-over $4.90 $1.75 • Volume Based Discounts outside North America • Monthly Transactions Dossier Courier • 1-99 $12.00 $4.75 • 100-299 $10.80 $4.30 • 300-999 $9.60 $3.80 • 1,000-over $8.40 $3.30
Benefits comparison • Method Drawbacks Doc X Solution • Overnight Time consuming prep. No printing, copy, stuffg. Missed pickups No cutoff time • Internal delivery delays No middleman • High cost/based on wt. Less expensive, based on file size. • Fax No security/confidentiality Document security • Poor quality Original quality material • Productivity loss Rapid in time transit • Calls to confirm receipt Receiver confirmation • Document tracking.
Vs. Email • Email Drawbacks Doc X Solution • Unreadable versions Reader/translator • Unpredictable Scheduled Delivery • Untrackable Document tracking • Security dangers Identity validation • Encryption • Instant desk to desk.
The History of UPS • Founded by Jim Casey in 1907. • Messenger delivery by foot, car and bicycle. • Established ‘common carrier’ services throughout US by 1975. • Airline deregulation in 1978, overnight services in 1982. • Corporate legacy: Emphasis on internal promotion lack of IT expertise.
The Strategy of UPS • Is it to follow FedEx’s lead? • Or to meet customers’ needs to gain a competitive advantage through technological and global expansion
UPS’ Strategy to Launch DX • Establish partnerships with major technology companies (technical knowledge, shared development costs, brand-name recognition) • Partners develop technology (history of well-managed partnerships, Danzas) • Market with UPS label and through alliances with suppliers of ERPs, Internet services, e-mail services, PCs • Move faster than competition
Why DX fits with UPS’ strategy? • Satisfies customer need (fast, secure small document delivery). • Technology development through partnerships. • Some global impact (especially through OnLine Dossier). • But does it provide UPS with a competitive advantage?
Does DX provide UPS with a competitive advantage? • Improve customer service • Decrease overhead and logistics for 288,000 packages • Builds customer relationships • Improve technical knowledge and reputation in conjunction with business and e-commerce solutions
The Competitive Environment POTENTIAL INTERNAL RIVALRIES
UPS works with suppliers & partners They provide technology They help UPS gain market access that UPS lacks. But some of these partners are positioned to compete with DX. Potential Internal Rivalries
Qualcomm & iName - makers of e-mail software that will include Exchange. Mindspring - Internet service provider. Compaq Computer - will include Exchange on its computers. VeriSign, Inc. - will provide digital certificates for Exchange Adobe systems Inc. - will provide software to enable users to display & print documents in their original form
NetDox, Inc. & Tumbleweed - two leading providers of secure digital delivery solutions. But these two partners also offer potential competition!