“This is an unprecedented time in economic and commercial history,” Dr. Thomas P. Gerrity was saying. “It’s very, very exciting. It’s also a time, with all this speed and innovation, of considerable unpredictability in terms of outcomes. This is a story that is unfolding in front of us.”
That story is the business revolution being fomented by the Internet, and Gerrity, the Reliance Professor of Management and Private Enterprise who stepped down as dean of the Wharton School last year, has some standing to talk. In addition to founding the Index Group, a leading consulting firm in information technology and management, he oversaw the development of some powerful e-programs at Wharton during his nine-year tenure there, and is now serving as director of one of them. That’s the Wharton Forum on Electronic Commerce, described as a “collaborative partnership” between business and academe that explores “critical topics for research in business.” (http://ecom.wharton.upenn.edu/ index.htm)
That constant confluence of research and business—and, of course, technology—is fast reconfiguring the worlds of teaching and learning as well as buying and selling. As Dr. Patrick T. Harker CE’81 GCE’81 Gr’83, the professor of operations and information management who has just been chosen to succeed Gerrity as the school’s dean, put it: “It isn’t enough to simply study technology; you must dive in and learn how to use it to transform our educational and research programs.” (For more on Harker, see the story on page 21.) In order to be at the “cutting edge of management education and research,” he added, Wharton needs to “understand their implications for business and for education.”
Among the school’s other e-programs are:
- A new interdepartmental major for MBA students, “Managing Electronic Commerce,” which focuses on the “design and implementation of effective strategies related to the use of electronic commerce.”
- Knowledge@Wharton, a bi-weekly online magazine, which fuses timely business-oriented stories with the latest business research and insights from Wharton faculty and industry leaders.
- Wharton Research Data Services—WRDS—an Internet-based data service currently licensed to some 30 business schools around the world.
- SPIKE, a “customizable Intranet communications suite” for students, which offers access to e-mail, Wharton news, course materials and a “virtual café” where students meet to share information and work on joint projects.
- Wharton Direct, an online “executive-education initiative” that delivers courses simultaneously to up to 30 sites around the country via satellite, the Internet and videoconferences. [“Gazetteer,” June 1998.]
The idea behind the Forum is to deploy the rigorous scholarship of Wharton’s e-oriented faculty —some 50 of them—in a partnership with subscribing corporations, thereby penetrating the hyperbolic fog surrounding e-commerce. (So far, the corporate members include British Airways, Fannie Mae, Ford Motor Company, IBM, Johnson & Johnson, Kraft Foods, Scottish Widows and State Farm, Inc.)
The Forum was established four years ago, and what gives it “a real leg up” on the competition, Gerrity believes, “is that we have developed particularly rich sets of data on buying behavior on the Internet. We have a longitudinal panel of several thousand Internet users” who have provided detailed information about their “buying behavior over three years or more, and it’s growing month by month. So we have an almost incomparable set of data to use on consumer behavior.”
One recent Forum study, for example, found that while total online retail spending is increasing, the rate of growth of online spending per person declined in 1999—contrary to the assumptions of many economic forecasts, which assumed linear increases in per-capita spending.
Based on a recent Virtual Test Market survey, noted an online press release, Wharton researchers “estimate current levels of consumer online spending at about $29.2 billion and project that Internet retail sales will climb to $133 billion by January 2004.” Another Forum study projected that online spending would reach $37 billion by the early part of this year, while others concluded that e-commerce has not produced the “ruinous price competition” some had feared; and that about 15 percent of online shoppers who bought something online in 1997 did not do so in 1998.
All the excitement and fuzzy understanding of the hyper-evolving phenomenon of e-commerce has made some people very rich—and, in some cases, led to absurdly high valuations of “dot.com” companies.
“It’s a phenomenon of very, very dramatic change that’s creating all sorts of new market opportunities, and the marketplace is very anxious to invest,” notes Gerrity. “The question, as always, is: Which ones? Valuations seem high across the board, and we’re now settling into a phase where investors are getting more thoughtful and careful and analytical. They’re in the process of separating the wheat from the chaff.”
Providing a broad base of support to the 50 faculty members pursuing the Forum’s research agenda is a constant challenge, notes Gerrity. “They’re very interested and very excited, and we’re trying to provide the best tools and data and financial support and access to corporate support that we can.”
Given the number of issues touched by e-commerce, it’s not surprising that the Forum’s faculty represent not just the predictable disciplines like marketing and finance but also business ethics and international law and public policy and management.
“It’s a huge range,” says Gerrity, “but if you look at it, it’s less surprising. Because as e-commerce evolves, it touches almost every domain and thought, one way or another.”
And keeping abreast of it all is a “very large challenge,” he admits with a laugh. “People keep examining the models, and the models are evolving as we speak. We go from Chapter One to Chapter Two to Chapter Three in about 12 months. It’s hard to stop this thing. It’s really going very fast.”
Given Wharton’s willingness to offer interdepartmental majors, its faculty’s “entrepreneurship” in developing an “appropriate set of courses,” and the keen interest shown by students, the “Managing Electronic Commerce” major was a “natural,” says Dr. David Schmittlein, the Ira A. Lipman Professor of Marketing and department chair. The major had been in the works since last April, he explains, and several departments already had a set of courses that “focused on managing electronic commerce.”
In becoming one of the first business schools in the country to offer such a major, he notes, “we were aided obviously by the high quality and scope and scale of the Wharton faculty,” since “having approximately 200 high-quality standing faculty is really a huge asset relative to other top business schools.” Furthermore, the strengths of that faculty “include precisely the areas most critical to course-development innovation relevant for electronic commerce” —such as entrepreneurship, information-based strategies and marketing.
Some students want to create a “solid foundation in developing and managing e-businesses, and in signaling that skill to employers—or, as entrepreneurs, to potential investors,” says Schmittlein. Others view the major “as a kind of roadmap to the different realms of e-commerce, both at Wharton and in the business world.” Employers, he points out, are “looking for students with a great foundation in management skills, and with a sense of cutting-edge challenges and opportunities. Obviously, this major fits in well with the latter, whether a student elects to fully complete the major or select certain courses from the major as a part of their overall portfolio of skills.”
Those looking for the future of business magazines would do well to to surf Knowledge@ Wharton, a bi-weekly electronic newsletter (Web-site: http:// knowledge.wharton.upenn.edu). The articles are timely, lively and generally well-crafted; not surprisingly, they also tap the expertise of Wharton faculty. Each issue is e-mailed to subscribers, and those interested in digging a little deeper into the issues can usually find
hyperlinks to do so.
“One of the big advantages of the Web is that we are able to respond quickly to news,” points out editor Mukul Pandya, a veteran business journalist who holds a master’s degree in economics from Bombay University in India. “We don’t see ourselves as a news site, but in view of Wharton’s expertise in several business disciplines, we can offer insightful analysis of current business events. For example, we’ve been able to respond quickly to developments like the AOL-Time Warner merger, the Microsoft judgment and the U.S. decision to back China’s entry into the World Trade Organization.” Most of Knowledge’s (predominantly free-lance) writers are “professional journalists who are used to working on short deadlines,” he notes, while the faculty’s expertise “makes it easy to respond rapidly to current developments, and the Web, of course, is a medium made for rapid response.”
By using the Web, Pandya and his colleagues realized, they could eliminate the costs of printing and mailing “and achieve global distribution from Day One.” It also allowed them to “present information in layers, so that readers could drill as deep into a subject as they liked” —and to offer a search engine that “allowed readers to find research about topics they were interested in.”
They launched the site last May 26.
“I always knew the Web was a global medium,” says Pandya, “but it was still incredible to see our readership go from nothing to nearly 800 in 33 countries in the first 24 hours after launch.” He had hoped to get 3,000 subscribers by the end of the first year; they had that many in three weeks. By the end of January, they had more than 20,000 subscribers in 125 countries.
The site’s impact has been “amazing,” he adds. “Last summer we wrote an article about online stock-trading based on the research of [Dr.] Barbara Kahn, who teaches marketing. Within a few hours, we had heard from Information Week magazine, which named Knowledge@Wharton its hot site of the week, based on that story. We also heard that day from a group of researchers in Spain, who were studying online trading in Europe and wanted access to Wharton’s findings, and a journalist in Japan who wanted to write a story about Wharton’s research.”
Though no other business schools were offering such a product when Knowledge was launched, Harvard Business School recently launched a site “that looks a lot like ours,” says Pandya. “It’s flattering to be imitated.”
Another first is the Wharton Research Data Services program (http://www.wharton.upenn.edu/ news/news_rel/wrds.html). Originally developed for Wharton faculty, WRDS offers 200 gigabytes of online business data, including stock prices and returns for more than 6,500 companies, Standard & Poor’s data on 7,000 publicly held companies, and macroeconomic data back to 1946. Approximately 20,000 faculty and students at the subscribing business schools have used the system. According to Dr. Gerard McCartney, executive director of Wharton Computing and Information Technology, a couple of other business schools tried to launch similar programs “but weren’t able to win any customers.”
While WRDS “has changed the whole way faculty do quantitative research,” in the words of McCartney, students have been the driving force behind SPIKE. The Wharton intranet “communications suite” was ranked fifth in the top 100 innovative IT applications by InfoWorld, as well as one of the top 50 Internet and intranet sites by CIO WebBusiness. SPIKE, which was launched in 1995, is now in its fifth generation (http://www.wharton.upenn .edu/spike/).
The first version of SPIKE was developed around a student-written document—half proposal, half manifesto—describing the communications environment the students wanted,” says McCartney. “We used this as a blueprint to develop a communications environment that addressed the specific needs of Wharton students. And each year we work with students to make next year’s product better. We continually refine the interface by developing prototypes that students use—and to which they add their own ideas and modifications.”
SPIKE doesn’t really stand for anything, though according to Kendall Whitehouse C’79, director of technology at Wharton Computing and Information Technology, its creators retrofitted it with an acronym (“Students’ Personalized Integrated Knowledge Environment”) to assuage those who got “agitated” by a lack of meaning. It offers students an interface for using e-mail; viewing current headlines and constantly updated information from the school and student groups; participating in e-discussion groups and visiting the webCafé (which provides a virtual room for courses in which faculty and students discuss and vote on topics of interest); downloading online course materials; accessing the electronic resources at Wharton’s Lippincott Library; locating other Wharton students, staff and alumni; and personalizing SPIKE for their own interests.
“It gives them what they need reliably and quickly and all in one place,” says McCartney. “Rather than having to check various Web sites run by different departments, SPIKE aggregates this content and presents it in a single, integrated, customizable interface. In an era of info-glut, SPIKE offers a rare combination—aggregation and focus.”
Which probably sums up the school’s approach to the technological revolution now in progress. While no one knows exactly where it’s headed, says Pat Harker, “it’s very clear that you won’t know the answer by standing on the sidelines. To be on the cutting edge of this revolution means that you need to experiment, to learn how to use technology. That’s the reason we’ve invested our energy in new technologies to expand the definition of the classroom, and in new programs to understand the e-business revolution.”
