Untitled
Commerce Confusion
By Doug Mee
If electronic commerce market penetration was measured by media hype, one may think the internet bonanza was peaking. Many companies, large and small are pursuing eCommerce projects in an orgy of experimentation. These internet initiatives have drawn enormous interest and attention, but as of yet, few have emerged as clear winners. Assuming that winning strategies are those that produce clear and tangible financial results (stock gains not included) the largest group of successful internet initiatives have been those that are focused on the improvement of business processes for brick-and-mortar companies. The success of Cisco, Dell, Michelin and many others in improving existing business processes and yielding measurable financial results stands in contrast to many emerging business models including e-tailing, exchanges and marketplaces. The use of the internet to improve existing business practices for the majority of small and mid-tier companies remains a largely unexploited and fertile market far from its peak.
Despite the seemingly obvious need for corporations of all sizes to migrate their business processes to the internet, many companies have been unable or unwilling to pursue online strategies. Different industries and markets are faced with unique and complex characteristics many of which may effect an eCommerce decision. Market demographics, customer preferences, current business practices, channel conflict, competitive landscape and many more factors contribute to the necessity and utility of an internet strategy. But for those corporations that recognize the need to deploy on the web, the hardest part can be where to start. Developers and integrators must be prepared to guide executives in a consultative process through the maze of strategic options and, if necessary, provide them with the information and tools to make informed decisions.
The bewildering array of strategy options, software vendors and integrators has created a misery of choice catching many executives in the headlights of the oncoming opportunity. Managers are now confronted with channel decisions ranging from the now ubiquitous business-to-consumer (B2C) and business-to-business (B2B) to the emerging business-to-exchange (B2E) and exchange-to-exchange (E2E) models. Scarce resources must be apportioned between the buy-side and sell-side initiatives. Each strategic choice is associated with its own inherent complexities in transaction types, workflow, content, product configuration, commerce platform and infrastructure. Executives and boards must further decide if it is more cost effective to rent, build or buy the hardware and/or software necessary to deploy their selected strategy, forcing the evaluation of countless hosting, application and commerce service proposals. The process of making these strategic decisions isn't aided by the claims of software vendors which have converged around the same insipid messaging and phraseology ("robust, scalable and extensible solution for 7x24 interactivity") making them all sound surprisingly similar.
Most businesses can discern the high-level strategic implications of eCommerce decisions but lack the empirical data upon which to make simple assumptions necessary in preferred metrics like return-on-investment (ROI). How many potential customers will visit my site? How many of those will buy? What services will they expect? How long will the average session be? How many pages will be served per visit? Will my site require advertising to build traffic? How often should my content be changed? Do I need to be integrated to an exchange or marketplace? What is the optimal server and technology configuration? Many companies also recognize that deployment of online initiatives without back-of-house system integration means scaling their system with bodies instead of machines further complicating the decision. Guidance can be gleaned from the likes of Forrester, Gartner and AMR, but for the most part this analysis only covers fortune 2500 companies and leaves the rest of the market to vendor claims and anecdotes. Inevitably all decisions regarding technology, hardware, software and services come down to the assumed return to the business. The assumed return to the business rides on the assumed traffic and transactions derived from the site and the assumed behavior of customers, partners and competitors. Many small and mid-tier businesses have postponed deployment decisions until the uncertainty in the balance between costs and benefits becomes clearer. This presents a significant opportunity to vendors who engage the customer throughout the eCommerce discovery process.
Top-tier developers and integrators, now more than ever, couple their client development activities with strategic and business process consulting engagements. These engagements are often mutually exclusive from the development project and serve the purpose of influencing the customer's decision and developing ironclad requirements for any ensuing initiative. Far from the relatively straight forward ROI calculations involved in a ERP, CRM, database or SFA decision, eCommerce opportunities must be measured with far more qualitative data. Mid and low-tier developers must now more than ever couple their services with upfront consulting engagements to solidify their position in an account and better adapt their products services and partners to a customers requirements.
