northwest ohio regional report on ohio’s readiness for ... · ohio’s readiness for global...

This is a summary report. For moredetailed information please visit

www.ecom-ohio.org.

Northwest OhioRegional Report onOhio’s Readiness forGlobal ElectronicCommerceMay 2000

EISCwww.eisc.orgJoseph ZielinskiCertified Business Analyst2600 Dorr StreetToledo, Ohio 43607-3237Telephone: 419-535-6000E-mail: [email protected]

Statewide Steering Committee

,

,

Co-Chairs

We wish to thank the members of theECom-Ohio Steering Committee,whose untiring efforts have broughtECom-Ohio to fruition.

Northwest Ohio’s ElectronicCommerce Readiness

1www.ecom-ohio.org Northwest Ohio

Ready, Set, Go!

Action! must be our watchword as the information revolution powerfully transforms our economy andsociety. But is Ohio ready to compete in the new information economy? This report answers thatquestion and more. It documents ECom-Ohio’s landmark public-private leadership effort to measureOhio’s readiness for global electronic commerce. The project has collected data in 22 key indicatorsthat measure our state’s performance against a comprehensive set of national benchmarks(www.cspp.org).

The Internet and growth of e-commerce as a way of doing business has thrust Ohio’s industrial baseinto a time of turbulent change. Network traffic doubles every six months and forecasts show thatbusiness-to-business e-commerce will be a major driver of our state’s economy in the next decade,generating new entrepreneurial ventures, sources of wealth and jobs. As industry experts recentlyobserved:

“Business-to-business trade isn’t growing up in high-tech centers like Silicon Valley; it’sdeveloping in industrial hubs like Cleveland and Detroit. As B2B trade expands, therewill be a flight of talent and venture capital money to support these efforts, leaving thecoasts feeling a bit of a frost — while middle America experiences the Internet boom in2001.”

- - Forrester Research, February, 2000

We firmly believe that Ohio—a leader in the first industrial revolution—has the potential to be a leaderin the ECom revolution in which we are participating today. Thriving in this time of change will chal-lenge all of Ohio’s firms and institutions. The report you hold identifies a course of action and thedirection we must take to remain competitive. Turn the page to see how you can get involved withinyour home, firm, educational institution, or government unit to move our state forward in the neweconomy.

Roderick G. W. Chu Lars NybergChancellor, Ohio Board of Regents Chairman and CEO, NCR Corporation

Infrastructure Capabilities

Available Local Backbone

High bandwidth connectivity in Northwest Ohio is provided most broadly through theaggressive efforts of Buckeye Telesystems with some Digital Subscriber Line (DSL)

Northwest Ohio has a limited information infrastructure,which will not be sufficient to support emerging high band-width applications. While access in metropolitan Toledo is nota problem, limited service and pricing options will become abarrier as automakers drive more suppliers in the region toweb-based procurement and scheduling systems. Internetuse by Northwest Ohio citizens is at national averagesbut local business use of e-commerce tools mustbe increased to provide the driver to enhanceinfrastructure, broaden access technologychoices, and assure the region’s futurecompetitiveness. This is particularlythe case in rural areas whereusage and accesschoices are limited.

Components of E-CommerceInfrastructure: The communicationnetworks that connect users to theInternet.

Access: The choices available bywhich users can connect to the publicdata network at the level they demandor need.

Usage: The extent to which business,government, and household usersutilize the access available to them.

Components of E-Commerce Defined

deployment in limited geographic areas. How-ever, the large number of small telecommunica-tions providers results in a lack of advancedservices available for most rural and manysuburban populations. Connections at 1.5 Mbps(T-1) speeds are available in most urban andsuburban areas, with most access available inthe metropolitan region. Access capacity isavailable from three Internet backbone providers,totaling 2100 Mbps to points outside the region.This provides for moderate levels of redundancy.Wireless access to the Internet is not widelyavailable.


Northwest Ohio’s connectivity choices are beingdriven by a dominant and innovative local cableprovider in the region. This is supplementing thedialup service available from incumbenttelecommunications providers with high speeddata services. Without continued strong anddiverse growth, the area’s infrastructure will notbe sufficient to support future emerging highbandwidth applications.

Action Agenda

• Re-deploy economic development tools to boost network capacity toassure infrastructure stays ahead of demand.

• Support efforts to develop a robust network infrastructure map which willsupport Northwest Ohio’s Information Technology (IT) and industrialretention and attraction efforts.

Key Findings

Ability to Meet DemandConnection attempts from theNorthwest Ohio region typically donot experience tremendous disrup-tions; 90% of all connection at-tempts are successful. However,dialup connections are not robustenough to support high bandwidthapplications. Network slowdownsoccur during peak hours but rarelydeny access. Approximately 60% ofOhioans report interruptions inservice at least once a month.Infrastructure is sufficient to support above average levels of data traffic today, but may nothave the capacity to support steady growth of Internet traffic in the future.


Access to Critical Services

Affordability

Range of Services

Dialup access at 56K is available throughout the region to residents and small businesses. Inte-grated Services Digital Network (ISDN) and cable modem service are available in urban andsuburban core, but only 8% of Northwest users are connected at these speeds. T-1s are avail-able throughout the region; limited high bandwidth access is available only in the Toledo metro-politan area. Only a narrow range of payment and service options are available to businessesthroughout the region, with rural areas served solely by dialup service.

For residents and small businesses, flat dialup service options are available universally. About56% of Northwest Ohio households and 87% of Northwest Ohio businesses know of alternativeservice packages available from local Internet Service Providers (ISPs). Selected serviceoptions based on usage are available on a limited basis from selected ISPs and service areasin or adjacent to metropolitan Toledo. Higher bandwidth services are available through bothISDN and cable at flat rates based upon connection speeds, not actual usage. Large busi-nesses have access to competitive pricing options for high bandwidth service.

Quality of Service

Dialup and higher bandwidth servicesetup times are nominal, and state-wide, most accounts are active within7-10 days. Ninety-three percent ofusers in business and 88% of theusers at home in Northwest Ohioconsider transmission speeds ad-equate for current levels of usage.Although more than 50% of theseNorthwest residents and businessesreport disruptions in service at leastonce a month, 88% of these citizensrank service response as satisfactory.


Key Findings

Action Agenda

The urban and suburban Toledo market isadequately served by Internet providers with limitedbroadband service available and limited pricingoptions. However, non-incumbent telecommunica-tions providers are not very strong. Rural areas ofNorthwest Ohio have even more limited choices.

• Support statewide legislative and regulatory efforts to broaden technology andservice choices for rural consumers.

• Provide discounted Internet access service to small businesses throughchamber and trade associations.

Competition

For data services, a limited range of technologies andproviders are available in urban and suburban areas, witheven less choice in rural areas. With household usage at6.6%, cable penetration is above the national average inthis region largely because of an aggressive, innovativecable provider. The Northwest Ohio region has a com-petitive ISP market although providers generally haveonly one level of service. Buyers can find alternativeservice packages from the moderate number of ISPproviders.

Northwest Ohio CustomerUsage by Type of ISP


Business Online

Domains

Websites

Market Development & Business-to-Business Transactions

Franklin and Delaware Counties areamong the top three Ohio counties in termsof domains per thousand capita in Ohio(1.75 per thousand capita). The totalnumber of domains in the Central Ohioregion increased by 154% in 1999, wellabove the national average domain growthrate.

Central Ohio businesses lag behindnational averages in terms of usingwebsites to run and promote their busi-nesses and sell their products, with about15% of the businesses using websites.Overall, businesses in the transportation,retail and financial sectors are moreaggressive at using highly interactivecontent to attract new customers.Throughout Ohio, very few businesses areusing tracking or push technology to retaincustomers. While there are companieswith websites that demonstrate latest bestpractices in web usage, these are notwidely used.

Fifteen percent of Central Ohio businesses have a website but 82% of those cite competitivepressure and new customer attraction as primary reasons for creating a web presence. Thisindicates an aggressive growth market. There are few significant business-to-business electronictransactions except in those Central Ohio industrial sectors with strongly linked supply chainmanagement systems, such as automotive original equipment manufacturers (OEMs) andlogistics and distribution. Twenty-seven percent of Central Ohio businesses use the Internet, and7.1% of those use Electronic Data Interchange (EDI) with suppliers or customers.

Month/Year

Tota

l Dom

ains

Reg

iste

red

0

500

1000

1500

2000

2500

12/98 3/99 6/99 9/99 12/99

1.19domains per

thousand populationCentral Ohio Domains

0% 20% 40% 60% 80%

Use Computers

Use TheInternet

Have A Website

Percent of Businesses

Central OhioStatewide

Business Use of Technology . . .

. . . varies with the number of employees

Per

cent

Usi

ng T

echn

olog

y

0%

20%

40%

60%

80%

100%

1-25 26-50 51-100 101-250 251-500 500+

Number of Employees

UseComputers

Use The InternetHave AWebsite

Statewide Technology Use by Number of Employees

6www.ecom-ohio.org Central Ohio

Source: Network Solutions Inc.

NetworkingLocal Area Networks (LANs) are used in33% of Central Ohio businesses. Mostbusinesses with a Wide Area Network(WAN) also have a LAN. Nevertheless, fewbusinesses indicate that they rely on e-mailas their primary form of business communi-cation. Based on statewide findings, largerbusinesses are much more likely to have aLAN or WAN.

Action Agenda

Businesses in the Central region, while among themost advanced in Ohio, are not aggressive users ofwebsites for marketing or selling. Recent growthrates show that Central Ohio businesses areadapting new technologies more quickly thannational rates.

• Use Chamber and business outreach community to stress critical need to build online presence and master e-commerce skills.

• Offer a member benefit to companies that provides e-commerce packages that introduce how to use the Internet as a productive business tool.

• Research case studies of local companies - provide cost/benefit information promoting the use of websites and conducting business-to-business transactions.

• Research what e-commerce companies need to thrive and develop strategies that attract them to the region.

• Attract new investments by building a national profile and awareness of what this region offers.

• Conduct small business counseling sessions that contain an e-commerce component.

• Encourage the appropriate use of technology through entrepreneurial committees.

Key Findings

Worthington Industries: www.worthingtonindustries.comBank One:

www.bankone.comOhio Health:

www.ohiohealth.comThe Limited:

www.limited.comNationwide:

www.nationwide.comSterling Commerce:

www.sterlingcommerce.comVictoria Travel & Tours:

www.victoria-travel.comQwest:

www.qwest.com

Central Ohio BusinessBest Practice Sites

33%15%

businesseshave a LAN

businesseshave a WAN


HomeWorkSchoolSomeplace Else

6%

24% 59%

11%

Citizens Online

Internet Access at Home and at Work

The Central Ohio region matches the nationalaverage in terms of computer ownership andInternet usage. Fifty-seven percent of all Cen-tral Ohio citizens own a computer and 42% areonline and log on weekly. Twenty-one percentof these Central Ohio citizens cite lack of ac-cess as a barrier to getting on the Internet. Inresponse, the city of Columbus is developing aplan to expand the number of public accesspoints at non-traditional sites, such as churchesand community groups.

Schools

While over 90% of all Central Ohio schools arewired, some areas within the city's core and in ruralareas lack adequate updated hardware or facilitiesfor effective educational use. Seven out of 10schools in Ohio have every classroom connected tothe Internet. Eighty-six percent of Central Ohioschools offer staff and teachers Internet trainingeither on or off site but there is a perceived lack ofinformation technology skills and an absence ofinformation technology curriculum offerings.

Libraries

Through the Ohio Public Library Information Network (OPLIN),libraries in Ohio boast an outstanding array of network servicesand public access to information, databases and resources. InCentral Ohio, there are 66 buildings with Internet access and 843workstations providing free public access to the Internet, accessto web-based e-mail for independent professionals, andcomputer hardware, software, and training. The ColumbusMetropolitan Library system was named as one of America's bestpublic libraries based upon a Hennen American Public LibraryRating (HAPLR) in the American Libraries Journal, January 1999.

Central Ohio InternetUsage by Location


Key Findings

Action Agenda

Central Ohio has broad citizen and household usage ofthe Internet, particularly relative to state averages.Public access through schools, community centers andlibraries is well utilized and planning efforts are inplace to expand public access in the communitythrough non-traditional means.

• Educate more teachers to share knowledge with students to boost computerliteracy by using DeVry Fellowship opportunities.

• Use private sector computing facilities for public training and seminars.

• Support increased number of information technology courses in curriculum offerings.

Ohio Citizens Online

0 10 20 30 40 50 60

Own AComputer

Use TheInternet

PurchaseOnline

Percent of Citizens

Central OhioStatewide

Statewide Technology Use by Income

0%

20%

40%

60%

80%

100%

< 10 10-20 20-30 30-50 50+

Annual Household Income Level (Thousands of Dollars)

Own A Computer Use The Internet Purchase Online

Household Internet use . . . . . . varies by income


Community Planning

New Communities Created

Employment Opportunities and Skills

Central Ohio has invested in a strong economicdevelopment presence on the Internet through theGreater Columbus Supersite. There are numerousonline resources supporting hobbyists and localinterest groups online, many of which are supportedby local ISP providers. The Greater ColumbusFree-Net provides low-cost public access withminimal interruptions.

Greater Columbus Supersitewww.columbus.org

Greater Columbus Free Netwww.gcfn.org

Delaware Chamberwww.delaware.org

Several local colleges and proprietary schools inCentral Ohio provide an IT curriculum and numerousdegree programs. Local chambers and businessesare actively changing curriculum content to improvegraduates' technology literacy through a number ofworkforce initiatives. Four local one-stop employmentservice centers exist and provide job search andresume posting services. The Central Ohio region hasbeen a leader in implementing OhioWORKS, currentlythe central job site for the state, providing job links andonline resume postings. Franklin County job serviceoffices have united to cross train and cross refer jobapplicants through their entire range of Worksourceprograms (www.worksource.net).

Columbus has focused its energies on developing strong incubator and commercializationprograms devoted to spurring high technology development. The Technology LeadershipCouncil, Greater Columbus Chamber of Commerce, and numerous other local technologygroups are focusing on information technology and its potential to boost jobs and theeconomy in this region. Many of these initiatives, groups and associations have improve-ment strategies in development or in early implementation stages, and they are beginning toconcentrate on integrating these programs with others.

Planning

Central OhioWebsites of Interest


www.ohioworks.com


Key Findings

The Central Ohio region has strong individualcommunity technology planning efforts that couldbe maximized by further coordination betweenthe groups. There must be an aggressive effort tobring local government units online.

Action Agenda

• Identify electronic commerce initiatives and interested organizations in order to maintain a directory.

• Conduct ongoing information exchanges with identified organizations to create coordinated regional technology planning efforts.

• Develop vertical government portals based on common themes of interest, such as Workforce and Economic Development or Electronic Commerce, to share costs of hosting and maintaining Web-enabled citizen services.

Government Websites

Few government units outside of the metropoli-tan Columbus area are online. Of those citiesonline, there are few government resources,downloadable forms or other self-serviceoptions for citizens. No local government unitprovides procurement online.

City of Columbus www.ci.columbus.oh.us

Central Ohio GovernmentWebsites of Interest

Glossary of Terms

Access—The technology choices available bywhich users can connect to the public data networkat the level they demand or need (dialup, cable,DSL, ISDN, wireless, etc.)

Bandwidth—The capacity of a transmissionchannel to move data among locations.

Cable modem—A device that enables a personalcomputer to be connected to a local cable TV lineand receive and send data.

Dialup access—Refers to connecting to theInternet via a modem and standard telephone line.

Domain name—The unique name that identifies anInternet site and its address.

DS3 (Digital Signal 3)—A standard digital transmis-sion rate of approximately 45 Mbps.

DSL (Digital Subscriber Line)—A technologywhich enables the ordinary copper component oftelephone lines to carry data at rates much higherthan ISDN.

E–commerce (Electronic commerce)— Commer-cial and non-commercial transactions facilitatedthrough the use of networked technologies.

Gbps (Gigabits per second)—A measurement ofthe rate of speed at which data is transferred (e.g., 1Gbps equals 1 billion bits per second).

Infrastructure—The communication networks thatconnect users to the Internet.

Internet—The collection of interconnected networksthat use the IP protocols.

ISDN (Integrated Services Digital Network)—Aservice that allows for higher data transmissionspeeds and is capable of handling at least twoservices over one line simultaneously (i.e., voiceand fax or voice and data).

ISP (Internet Service Provider)—A company ororganization that provides users with connectivity tothe Internet.

Kbps (Kilobits per second)—The rate of speed atwhich data is transferred (e.g., 1 Kbps equals 1,000bits per second).

LAN (Local Area Network)—A network ofinterconnected workstations that share theresources of a single processor or server within arelatively small geographic area, such as an office.

Mbps (Megabits per second)—A measurement ofthe rate of speed at which data is transferred (e.g. 1Mbps equals 1 million bits per second).

OC3 (Optical Carrier level-3)—An optical fiber linethat supports digital signal transmissions at 3 timesthe base rate of 51.84 Mbps or approximately 155Mbps.

OC12 (Optical Carrier level-12)—An optical fiberline that supports digital signal transmissions at 12times the base rate of 51.84 Mbps or approximately560 Mbps.

OC48 (Optical Carrier level-48)—An optical fiberline that supports digital signal transmissions at 48times the base rate of 51.84 Mbps or approximately2.5 Gbps.

OC192 (Optical Carrier level-192)—An opticalfiber line that supports digital signal transmissions at192 times the base rate of 51.84 Mbps or approxi-mately 9.7 Gbps.

T1—A commonly used line for Internet connectivitythat supports digital transmissions at 1.5 Mbps.

Usage—The extent to which business, governmentand household users utilize the Internet access andinfrastructure available to them.

WAN (Wide Area Network)—A geographicallydispersed telecommunications network.

Wireless access—A communications system inwhich radio-frequency or infrared waves carry asignal through the air, rather than along a wire.

xDSL (Digital Subscriber Lines)—One of manyvariations of DSL, the most common of which isADSL, asymmetric digital subscriber line service.


Regional Workteam Members

Ameritech OhioBob Blazer

AWHEd Daley

CB Richard EllisJim Corbett

Columbus City CouncilwomanCharleta B. Tavares

Columbus Health DepartmentMike Pompili

Columbus Mayor’s OfficeJesse Jones

Columbus Metropolitan LibraryLarry Black

Columbus Public SchoolsHarvey Martin

Columbus Urban League Inc.Samuel Gresham Jr.

CTL EngineeringC.K. Satyapriya

Delaware Area Chamber of CommerceCharlotte Joseph

DeVRY Institute of TechnologySharon R. Steele

Electronic Commerce Technology of OhioNeil Drobny

Greater Columbus Chamber of CommerceChris A. Reveal

Industry & Technology CouncilFrank Henson

KEANE, Inc.Jeffrey Baumer

Mid-Ohio Regional Planning CommissionWilliam Habig

NationwideBruce Barnes

New Albany Chamber of CommerceEileen Leuby

Novatec Automation Systems Inc.Mark Foley

Sophisticated SystemsMarkel Snyder

Technology Leadership CouncilTodd Ritterbusch

Time Warner TelecomBob Miracle


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