Market Equity

www.marketequity.com.au

Executive Summary

Market Equity is a business information consultancy providing market research, marketing planning, marketing information systems and knowledge management.  It is based in Perth and has 50 full-time employees nationally.

Company directors initiated the e-commerce solution in 1996, culminating in the establishment of an extranet for clients, an intranet for staff and the uptake of several web-based internal functions.

Market Equity recognised that the development of an online system would have to be supported by stringent security measures.  This would be imperative in maintaining staff and client confidence in the reliability of the system, particularly for the transmission of commercially sensitive information.   Security measures implemented by Market Equity include a firewall, anti-virus software with daily updates, password protection for the intranet, issuing of digital certificates for clients using the extranet and daily data backups. 

The key features of Market Equity's online system are the development of an intranet for staff use and an extranet for client use.  Both these networks serve as a central document repository in which research reports and other documents can be easily sourced. 

From an initial investment of $81,500, Market Equity realised an operating benefit from e-commerce of $221,635 in 2001.   The main qualitative benefit from implementing the online system was the increased convenience in which staff could access required information.

Dean plans to build on the present system to enhance service delivery to clients.  Additional services include transmitting videos of market research groups to clients via the Internet, conducting market research online rather than by phone and establishing an electronic marketplace.

The Business

Market Equity is a business information consultancy with operations covering market research, marketing planning, marketing information systems and knowledge management.  The company was established in 1992, and now operates throughout Australia. 

Market Equity is based in West Perth, Western Australia (WA) and employs 50 full-time staff.

Getting Started

Company Directors implemented e-commerce in 1996.  The initial goal was to find a logical and cost effective way to transfer large volumes of information to clients.  Subsequently an extranet was established in 1998.

The two-member Information Technology (IT) support team, led by Managing Director, Dean Harris, is responsible for the e-commerce strategy and for maintaining the national network.  The IT manager conducted preliminary research into what online features would best suit the business.  Several options were assessed and an investigation was made into best practice among industry peers.  The development of the extranet was outsourced to an external party.

E-Security

Market Equity recognised that effective use of the online system would require installation of stringent security measures.  In particular, a tight security system would provide customers with the confidence to support electronic transmission of commercially sensitive information.  The internal IT staff made the relevant investigations into the appropriate systems.

Market Equity installed a firewall to control Internet connections into and out of the business.  The company has installed virus protection software with daily updates downloaded on each machine.  This will minimise the risk of viruses being transmitted from file transfers or email. 

The intranet system is password protected from unauthorised access, and passwords must be changed every 30 days.  Investment in digital certificates has also been made - these act as an electronic "credit card" to establish credentials when executing web-based transactions.  Market Equity has in place extranet certificates for the distribution system and server certificates.  Clients are also issued with certificates to keep access to the extranet exclusive and secure.

In case of attack or file destruction, all business data is backed-up on a nightly basis.  Data is stored on back-up tapes and taken to an offsite location every week.  This minimises the disruption to business activity should the computer systems fail.  In addition, the server is locked in a cabinet for physical protection.

Current E-commerce Strategy

The website is used for marketing the company's services, products and profile.  Advertisements for joining discussion groups and online panels from which market intelligence is collected is also posted on the website. 

Clients are provided with a login username and password with which they can access the company's extranet, to obtain market information, past deliverables, statistics, industry based data and other relevant information.  To ensure only authorised access to the extranet, clients are issued with a digital certificate to verify their credentials for entry.  Currently, there are 15-20 client visitors to the extranet per day.

An intranet, supported by Sharepoint software has been built.  This acts as a central information repository, allowing staff to access information on clients, past projects and training manuals.  Content on the intranet is populated by staff contributions, enabling knowledge to be shared across the company.    The intranet is particularly useful in communicating with staff en mass and keeping staff informed of internal management issues.   Market Equity has abandoned paper-based filing as all electronic documents and correspondence are now saved on the network.  Paper documents are scanned and then saved electronically.   This has reduced filing requirements by 90 percent.

Email is used as the main form of day-to-day correspondence with clients as well as the medium by which proposals and presentations are now sent.  Correspondence with suppliers is also primarily by email.  Content from information suppliers such as Reuters, Forrester and the Australian Bureau of Statistics is now received electronically.  In addition, client advertisements are occasionally emailed to respondents for testing and feedback.

Finance functions are also managed online through the use of electronic funds transfer, online banking and payroll.  Electronic funds transfer is currently used with most suppliers and 80-90% of clients.

Market Equity installed Broadband Internet via ADSL (Asymmetric Digital Subscriber Line) to enable fast transmission for large amounts of data.

 Revenue and Costs

* Note: Capital Expenditure was amortised over a four-year period

Financial Analysis

Market Equity generated additional revenue from e-commerce of $1,200,000.  This is due to clients contacting the company having visited the website or generating business due to the enhanced online features available.

Market Equity also derived cost savings of $130,400 in 2001.  The business saved $24,000 on colour printing as they delivered most proposals, projects or work to clients electronically and $21,600 on stationery and supplies due to minimising use of the printer and fax.

The company was also able to make substantial savings in staff time.  Staff members were able to save half an hour per week in managing client enquiries as clients could now search for answers using the extranet.  This resulted in an annual saving of $20,800.  Use of electronic filing has saved $52,000 in staff time previously spent searching through hard copy files.  Using electronic banking, payroll, and EFT saved one-third of a bookkeepers time, reducing expenses by $12,000 in 2001.

Market Equity invested $81,500 into setting up the e-commerce initiative.  Six months of staff time was spent on preliminary research to identify and implement the most suitable solutions for Market Equity ($30,000).  An external consultant was engaged to design and implement the extranet, at a cost of $23,000.  Investment in infrastructure included ADSL installation ($500), intranet software ($12,000) and a scanner ($6,000).  Initial costs associated with e-security include installation of anti-virus software ($3,000) and firewall technology ($7,000).

Ongoing costs totalled $112,765 in 2001.  This amount includes time spent by staff to update content on the extranet ($62,400) and 20% of an IT staff member's time to maintain the system ($12,000).  Other expenses included rental of the ADSL line and ISP fees ($4,800) and extranet hosting ($2,400).    In addition, $20,375 was allocated to the amortisation of capital expenditure over four years.

Maintenance costs associated with e-security include anti-virus software ($1,500), firewall ($1,000), extranet certificates for the distribution system ($5,000), server certificates ($1,850) and client certificates for access to the extranet ($600).

Non-Financial Benefits

For staff, one of the major benefits of the online system is the convenience provided by the intranet.  By providing a central repository for internal staff information such as client deliverables, training manuals, templates and market data, the process of retrieving and storing documents is simplified.  Time spent searching for a particular document is minimised as are 90% of overall filing requirements.

The intranet enables staff to access the internal network from outside the office.  This is particularly convenient for staff members working from home or interstate.

For clients, access to the extranet provides a 'one-stop-shop' of online resources including research reports, current market information and industry trends.  This empowers clients to obtain the information required at their own convenience.

Challenges

With the company's increasing use of email, policies had to be implemented in order to restrict usage for business purposes only.  In addition heavy reliance on the electronic filing system has led to new risk management policies being adopted to eliminate downtime, such as the practice of data back-ups.

Dean also believed that the cost and time spent on implementing the system was substantial.

Future

Dean plans to build on the present system to enhance service delivery to clients.  This includes the web viewing of market research groups and conducting more research via the Internet rather than phone.  Other plans include the development of an electronic marketplace by which marketing advice and research can be analysed and discussed by interested parties.  

Market Equity is currently in the process of upgrading its security system to include a Virtual Private Network.