The information available on the Internet is already legendary. Some statistics I’ve gathered (from the Internet, of course) are revealing. It is estimated that there are already 35 billion Internet domain names registered. That number is growing in the hundreds of thousands daily! In the US, 63% of Internet surfers use the Net to get the latest news reports, 52% use it for research required by their work, and 45% use the Internet to obtain financial information.
Then I remembered that the Internet now makes it feasible to store even proprietary data (e.g. company sales reports, customer records) in centralized locations (i.e. data centers). This lowers the cost of managing the vast amounts of data which companies now process, improves the safeguarding of this data (although this is a claim that is still debatable), and increases the efficiency in which this data can be shared between multiple (authorized) users.
Even computerized applications can now be accessed from the Internet. Imagine having the ability to use Accounting software, Financial Analysis tools and Investment Management programs, and paying only for your actual usage (instead of having to invest in the purchase of the software program). In many instances, these programs can even be downloaded for free! This reduces upfront investments in software and even hardware, as well as hardware maintenance and software upgrading costs.
The Internet is also a communication tool. Voice communication over the Internet has grown from 200 million minutes in 1998 to about 4 billion minutes in 2000. And yet, with data traffic growing at 125% annually, voice traffic is expected to be just 1% of total traffic by 2007! Just think, even the most basic Internet application, e-mail, results in annual savings for US companies of $9,000 per employee (from communication costs, office supplies, improved efficiency, etc).
Finally, the Internet facilitates e-commerce. Total e-commerce transaction value exceeded $12 billion in 1999. If we expand the definition of e-commerce to include all business activities done online, a global savings of $1.25 trillion is expected by 2002.
All of this redefines the priorities of the Finance professional. The Internet makes data gathering, data sharing, and data processing second nature. It makes communication and the general conduct of business more efficient. The key to success is now the interpretation of available information in order to make timely decisions, and take immediate business action. Ironically, because of the vast amount of data available, and the speed at which this information is being delivered to the professional, intuition (defined as the immediate knowing of something without the conscious use of analysis) starts to play a bigger part in decision-making. Efficiencies in communication and e-commerce make it even more imperative for companies to take quick action. Remember that while the Internet is a tool, it can also be a weapon used by competition against the professional or company unable to harness its power.
More than ever, the judgment and leadership of the professional determine the success of his company.