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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

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
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 Document Exchange
  • UPS OnLine Dossier
  • UPS OnLine Courier
  • Same idea to carry document through the Internet
  • But Dossier offers a higher degree of security
slide8
Before analyzing the marketing, strategic and competitive sides of UPS Document Exchange, let’s have a look at...
slide10
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
The main specifications that drove UPS technological choices
  • Universality
  • Simplicity
  • Reliability
  • Security
slide12
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
slide13
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
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
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
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
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
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
digital envelope cryptography
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”
slide27
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
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 the universality constraint
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
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
What’s the Product?
  • It’s fast,
  • It’s easy to use and safe to use.
  • It’s versatile.
who are the targeted customers
Who are the targeted customers?
  • Law Firms
  • Medical Care Providers
  • Banks
  • Insurance Companies
cost comparison
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
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
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
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
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
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
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
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
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
The Competitive Environment

POTENTIAL

INTERNAL

RIVALRIES

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
slide49
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

slide50
NetDox, Inc. & Tumbleweed - two leading providers of secure digital delivery solutions. But these two partners also offer potential competition!
slide51
NetDox offers a potential competition.

DoxIt offers:

Global reach

Ability to transmit any digital file - text, graphics, audio

Authentication of sender and receiver identities

Highest level of encryption allowed by law

slide52
Notarized audit trail

Verification reports to verify: Sender, recipient, time, date of delivery, and message contents

Financial guarantee up to $100,000 per transaction

Pay per use - no up front costs

Works with current system infrastructure

slide54
Tumbleweed offers a service called Posta 2.0:

This system offered to Posta Service Providers (PSPs) that include (not exclusively) UPS

Posta 2.0 uses hardware and software components from Sun Microsystems to allow more concurrent users and faster delivery.

slide55
Posta 2.0 is built on a CORBA-based architecture meaning the Posta server software can be installed across a cluster of servers to increase performance.
  • Targeted customers for Posta are different than those for DX.
slide56

The Competitive Environment

POTENTIAL

INTERNAL

RIVALRIES

OUTSIDE

COMPETITORS

outside competitors
The United States Postal Service will offer a competing product called Post Electronic Courier Service (“Post E.C.S.”).Outside Competitors
slide58
Post E.C.S. is not yet available

will deliver documents with differing levels of security from secured SSL or PCT internet connections to optional RSA file-encryption on the Post E.C.S. server.

will allow recipients to read any document regardless of the software applications used.

slide59

Pitney Bowes also offers a digital document transferring solution called iSend.

  • iSend offers all of the same technological features as Exchange. However, it does not offer insurance.
  • iSend was created through a partnership between Pitney-Bowes and Tumbleweed Software.
slide60
With iSend, you can pay as you go with per transaction pricing, or through a monthly subscription, which allows you to pre-pay for a number of packages at a reduced price.

If you opt for pay as you go, you pay $1.00 per package plus $.50 for encryption, $.50 for password protection, $.50 per additional recipient and $.25 for confirmation.

The monthly package entitles users to 20 packages for $19.95.

slide61
“ “FedEx, which has more than 40 per cent of the world’s courier market, is not planning to introduce a digital fleet. ‘There is no customer demand for such a service,’ it says. ‘Most companies are satisfied with their own ISPs and e-mail systems.”

-Financial Times (London), June 26, 1998

the competitive environment62
The Competitive Environment

POTENTIAL

INTERNAL

RIVALRIES

OUTSIDE

COMPETITORS

SUBSTITUTES

substitutes
SUBSTITUTES
  • There are alternatives to pay-per-use digital document transfer including
    • devices that scan and encrypt documents for internet transfer and
    • encryption solutions for web-based e-mail.
slide64
Hewlett Packard’s 9100C Digital Sender is a desktop sending device.

It enables users to digitally send paper documents to an Internet e-mail address, fax number, JetSend technology-enabled device, network printer or personal computer.

The 9100C retails for $2,999

slide65
Netscape Communicator currently allows users to download digital certificates to encrypt their e-mail for free!

Doesn’t offer the same level of encryption.

Doesn’t insure delivery

Doesn’t integrate universality like DX does

slide67
Where does DX fall on a 2x2 matrix of Functionality vs. Technology?
  • We conclude that existing solutions should be reinforced rather than opting for DX.
is it a promising business
YES

High sales forecast (31% of packages over Internet by 2000)

Inevitable progression for courier business

Gives customers faster, cheaper document delivery

Less infrastructure costs for UPS

NO

UPS adds nothing but its brand name equity to the process

UPS cannibalizes its own sales with the venture.

There are better solutions than the one UPS offers.

Is it a promising business?
slide69
Other problems:

Low barriers to entry for other competitors

Demand will have to be built up and trust issues overcome.

slide70
We conclude that UPS will not add to the value chain of its customers through DX more than lower-cost substitutes.

Customers would be better served by augmenting existing e-mail (along with attachment features) with digital certificates for encryption.

Possible Solutions

Sell an integrated software solution

Provide flat rate for use of secure server to transfer documents

Provide Document Management (add value).

document management
Document Management
  • Technologies used to manage distributed documents, disseminate information and input and retrieve documents (imaging).
  • It’s the integration of imaging, workflow, groupware and other technologies.
  • Why? Integrate UPS into value chain
  • In 1998, the electronic document management market totaled $2.9 Billion
slide73

The Integration of Information:

additional markets for UPS?

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