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Digital Imaging, Document Delivery and the United Parcel Service

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

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  1. Digital Imaging, Document Delivery and the United Parcel Service Wednesday November 4, 1998 Susan Chapman Eduardo Gonzalez Nina Lee Andrew Robertson Jean-Christophe Roux

  2. 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.

  3. To convert288,000 worries into

  4. 288,000 business opportunities!

  5. ...UPS introducesUPS Document Exchange

  6. 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

  7. Video Description ofUPS OnLine Dossier

  8. Before analyzing the marketing, strategic and competitive sides of UPS Document Exchange, let’s have a look at...

  9. The technologybehindthe UPS Document Exchange

  10. We will focus on: • The main consumer-related specifications that have driven UPS technological choices. • The technologies that UPS chose to meet those specifications.

  11. The main specifications that drove UPS technological choices • Universality • Simplicity • Reliability • Security

  12. 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

  13. 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

  14. 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)

  15. The technologies that are used • Step One: Have the document digitized • Step Two: Send the document • Step Three: Receive the document

  16. 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

  17. How does a scanner work

  18. Send the document • This is the core the UPS Document Exchange service • We will focus on its major feature: high degree of security

  19. Before going into the details...

  20. 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

  21. Traditional Cryptography

  22. Public Key Cryptography“Only the appropriate receiver can open”

  23. Public Key Cryptography“The recipient is sure of the sender’s identity”

  24. 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”

  25. Into the detailsofUPS Document Exchange

  26. 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

  27. Another three-step approach • Step 1: From the sender to UPS • Step 2: UPS in action • Step 3: From UPS to the recipient

  28. Step1: From the sender to UPS

  29. Step 2UPS (NetDox) in action

  30. Step 3From UPS to the recipient

  31. Receive the document

  32. To address theuniversality constraint • We need formats that are standards: • For text: pdf • For image:jpeg • For video: mpeg • We focus on pdf

  33. Pdf format • Portable Document Format • Developed by Adobe (Acrobat software) • Main features by other document formats • Cross Platform • Navigational • Ultra-Printable • Ultra-Viewable • Smaller.

  34. The marketing strategy

  35. What’s the Product? • It’s fast, • It’s easy to use and safe to use. • It’s versatile.

  36. Who are the targeted customers? • Law Firms • Medical Care Providers • Banks • Insurance Companies

  37. 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.

  38. 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

  39. 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.

  40. 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.

  41. 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.

  42. 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

  43. 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

  44. 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?

  45. 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

  46. The Competitive Environment POTENTIAL INTERNAL RIVALRIES

  47. 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

  48. 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

  49. NetDox, Inc. & Tumbleweed - two leading providers of secure digital delivery solutions. But these two partners also offer potential competition!

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