If you haven't taken time to grasp what e-business is all about, it's simple. "E" stands for "electronic;" think of "e" as being equivalent to the Internet. E-business is doing business over the Internet, and e-commerce is engaging in commerce over the Internet. The "e" way of doing business is a natural for Alaska, especially in the services industry. It involves mostly brain power and doesn't require the logistical challenges that our geographical location presents.

This is the first in a series of articles that show how Alaska businesses and government are staying competitive by introducing "e" in the way they do business. Every attempt will be made to stay away from the technical aspects of the solutions and instead provide ideas on how business problems are being solved through creative thinking.

Suppose someone were to tell you that they could reduce your business costs while helping your employees be more productive and provide you a more efficient way of communicating to your suppliers. Oh yes, the best part is that they will pay for the development of this idea up front and expect to get incentives based on continual quality performance of which they monitor daily. One company in Alaska is doing just that: Alaska Supply Chain Integrators. ASCI took on that challenge in 1999 from BP Exploration (Alaska) Inc. to meet its procurement goals.

Company president Ron Riesmeyer and general manager Scott Hawkins, along with other investors of ASCI, knew they could meet BP's procurement goals partly because they knew the processes very well. Generally, they envisioned a simple yet solid concept that would not only meet but exceed BP's goals.

The concept involved both process change and the development of Internet-based systems and has turned out to be a perfect example of how a services company can successfully implement e-business and promote e-commerce in Alaska.

ASCI built a set of integrated software applications named "Smart" that were developed to support five functions within the materials procurement and management process; all are Internet or Web based. The functions supported are catalog, bill of materials, equipment specifications, purchase order, and order tracking. The most recent development has been an online reverse auction system that efficiently assists BP's selection of suppliers and gives the selected suppliers an interactive way of staying competitive.

Each application has contributed to the increase of productivity both for BP and its suppliers and has improved process efficiencies resulting in reduced costs. The developed applications are named SmartCLUE, SmartSPECS, SmartTRACKER, SmartMEASURES, and SmartQUOTE.

To provide some background, SmartCLUE is an application that provides quick and easy access to the master materials catalog. The front-end requisitioning feature in the bill of materials function will automatically pull a list of components needed for equipment preventative maintenance. This has saved the material coordinators up to three weeks of work.

Once a product is chosen, a purchase order is generated and posted to the Internet. The supplier then returns an acknowledgment of the purchase order and provides requested information like a delivery date. This transaction was previously done by mail or fax and often required supplier response in areas that earlier would have kept the procurement process stalled. Suppliers also benefit by having access to BP specifications online using SmartSPECS.

From this point on, the delivery of goods can be monitored through SmartTRACKER. SmartTRACKER retains the order for 30 days and the progress of an order can be checked any time. This application supports delivery progress updates from suppliers like FedEx, United Parcel Service and Lynden.

Now for the best part. ASCI's incentives are based on performance measurements. Because of the direct correlation between the performance of ASCI and BP's suppliers, the supplier performance is monitored real-time. Using the SmartMEASURES application, each supplier is measured, ranked and compared to the performance of each other. This is ASCI's gold mine of information. It also helps the supplier retain its status as a BP supplier.

SmartQUOTE is the newest application and is used by the short list of qualified suppliers to bid on product pricing. Instead of responding to a time-consuming request for quote or request for proposal, they respond online. The savings here have been enormous.

ASCI has met BP's challenges, partly through implementing a successful e-commerce strategy. "You would not find another large corporate entity in the world at this time that is north of 95 percent of transaction volume on the Web," Hawkins said. He wouldn't say what the early financial impact was to BP, but the promised reductions have been met by a "significant percent."

Melody Milliken is president of ken Corp., an information technology project management and business consulting firm based in Anchorage. She can be reached via e-mail at (millikenm@kencorp-it.com).