The e-commerce phenomenon continues unabated, in spite of the current negative investment environment (a recent cover of Time Magazine dolefully announced the Death of the Dot Com). Mergers and acquisitions focusing on internet technology and related business applications have declined but are still viable as are B2B portals. Read the print media and you will find no shortage of businesses announcing that they have reinvented themselves to join the e-commerce world. One good example, the weekly journal PC Week recently transformed itself into “eWeek - Building The .Com Enterprise.”

Marketing cynics may suspect that there is an awful lot of “me too” going on as everyone rushes to cash in on the latest and greatest management panacea. Remember the paperless office? How about Continuous Improvement, Customer Service, Benchmarking or Empowered Teams?. I mention them not because they don’t serve a valuable role in organizations if properly implemented but because of the hype that accompanied them as they became the latest management issue that in their day, seemed to occupy all the print space.

Similarly, e-commerce has a valuable role to play in some organizations if properly implemented. E-commerce initiatives must be effectively managed like any other management initiative since it is an investment in a business process. Senior management should not be put off because it may involve technology they don’t understand: it just happens to be project management that involves technology --- all the same basic rules still apply. Learning the basics of e-commerce really only requires moderate effort, most of which revolves around learning the jargon of the industry.

If you think that e-commerce may have a role to play in your business, do the homework: a needs assessment (does the concept fit your business), a business case or model (how will it work in your business), a cost-benefits analysis (what’s the ‘bang for buck’ ratio), a project plan, implementation, training etc. etc. Above all, ensure that there is a valid return on investment.  As a side note, it seems that the term “value proposition” is more popular now than the old-fashioned term of ROI (go figure).

If you have decided that some form of e-commerce makes sense for your business, what next? Well, the options are as varied as the needs of businesses. If you only want to be able to accept orders over the internet, you can buy off-the-shelf or “shrinkwrapped” solutions for under $1000.  If you want to create a multimediary global portal and exchange site however, you can literally invest tens of millions of dollars. It may be wise to get an independent review if the potential costs are high.  All of the big accounting/consulting firms are heavily involved in e-commerce and have competent staff to guide you through the maze of e-commerce offerings. A number of Systems Integration firms can offer ‘turnkey’ solutions, from conceptual design through proof of concept to implementation. Choosing an e-commerce solution provider can be a daunting task, as there are hundreds to choose from but the task can be made easier by falling back on those good old project management tools that you’ve used in the past: define your criteria in detail then investigate and evaluate the vendors as you  would if you were buying anything else (but with a technology twist). Some of the issues:  how does the vendor’s product rate in terms of your business, technical and functional requirements?  How do they rate in terms of professional services, support and maintenance? What about upgrades?  Who owns the source code? Can they meet your cost requirements? How many staff will you have to hire to run the darn thing anyway? What about all the hardware you’ll have to buy or should you pay someone to host it?  How will your site and your business be protected from hackers? Plus about fourteen gazillion other things to think of that may be unique to your business --- remember that in project management, the devil is in the details.

Let’s assume that you’ve taken the plunge and bitten the e-commerce bullet. Now, how do you let the world know that you’re up and running, open for business on the web? If you’re a large manufacturing organization, heavily into supply chain logistics integration then it’s not much of a problem since your suppliers will be highly motivated to come to your e-commerce table. Cisco and Intel are leaders in this area and have been extremely successful in reducing procurement costs and improving cycle times. But if you’re a small business enterprise hoping to grow your B2B sales over the web, how do you attract (the first part of the equation) then keep (the second and to some, the most important part) a customer?  Unfortunately, the philosophy of “Build It and They Will Come” just doesn’t seem to work all that well in the e-commerce world.

These questions have spawned a completely new industry in the last couple of years.  Witness the rise of the Internet Marketing specialist. The most surprising thing to learn is that the pioneers of successful web e-marketing were the porn sites. Now, I’m not suggesting that everyone immediately fire up their browsers and head for ‘http://www.somesite.com/’ under the guise of marketing research!

Internet marketing techniques have been translated into squeaky-clean marketing texts which are available at your favorite bookstore or can be purchased online. It is interesting to note however, that the biggest advertising expense item for the leading Dot Com’s is print media followed by radio and television.  Be aware that e-marketing is still very much in its infancy and there are competing schools of thought, not all of which may suit your corporate philosophy or budget.

Customer Retention is an area of some considerable concern which itself has spawned another e-commerce sub-industry that revolves around Customer Relationship Management (CRM) as applied to internet marketing. Measuring and managing your customers’ satisfaction is not an issue to be taken lightly as web users are notoriously fickle. A website should be ‘fast,’ clear, scroll-free, concise, uncluttered yet visually attractive and above all, easy to use as in “make it easy for the customer to do business with you”. Incentives or rewards of some sort may come into play here as well as business strategies where the lowest price really is online. Lowest price online strategies however, may cause some companies difficulty if they have standing distribution and discount agreements.

So what does all this e-commerce stuff mean? Is it just the latest in a seemingly endless series of business fads or is it really the beginning of a new and lasting trend?  All indications are that it is the beginning of a significant change in business process methodology. The ultimate goal is to use technology to provide competitive advantage. While it may not apply immediately in some sectors, manufacturing (procurement), warehousing and distribution (logistics) will be witness to significant changes in the very near future.

Don McDonald is a Principal with The Osborne Group in Vancouver, B.C. He can be reached at (604) 688-4960 or mailto:vancouver@osborne-group.com. Also visit the Osborne website www.osborne-group.com