Cash And Confidence On The Web

By Brian Walsh  You can roughly define electronic commerce as the transactions leading to the sale or other transfer of title for payment between producer and customer. Because e-commerce software has a spotty record for actually making money, financing for it seems to binary: Either you have a big customer that insists you implement a compatible system or your manager uses some form of black magic to justify the project. However, it's apparent that the Web has generated a great deal of enthusiasm for e-commerce. The questions now are who will be the winners and what's the winning strategy--not which vendors will succeed (unless you work for a vendor or own a lot of stock in a particular company). What opportunities does e-commerce create f or rank-and-file business organizations? How can companies that want to develop an e-commerce strategy approach the market with the right technology, make the best decisions and ultimately contribute to the bottom line? Opportunity Knocks First, you need to recognize the opportunity. If you find yourself in one of the two broad categories mentioned below, the decision to deploy an e-commerce strategy is a no-brainer. · Companies that purchase large amounts of nonproduction goods MRO (maintenance, repair and operations, in purchasing parlance). For those of you who fall into this category, Web-based e-commerce gives you an opportunity to reduce costs by pushing the buying function from the purchasing department to the requisitioner. E-commerce reduces the amount of time between need and delivery by streamlining the flow from approval to delivery. · Smaller producers seeking to gain market share from larger, more established competitors, particularly in the MRO market. For you, e-com merce presents a way to level the playing field. A competitor's size provides no advantage as organizations create an online presence. It's Not About Money The goals for either market segment are the same, though this may not be apparent. To the casual observer, e-commerce is obviously all about payment, and the most pressing concern is whether consumers will release credit-card information over the Internet. Well, the casual observer is wrong. There is a distinction between consumer e-commerce--where advertising, hit rates and getting paid are obsessions that vie with the customer's right to privacy--and business-to-business e-commerce. The media hype surrounding consumer e-commerce has focused on online electronic payment systems, such as SET (Secure Electronic Transaction), digicash, credit cards over the Internet and digital wallets. But most transactions happen between businesses that have an ongoing vendor-customer relationship. In these cases terms are "net 30 days," and much of the invoi cing and payment happens offline--or at least off the Internet. Clearly, in these instances payment systems do not occupy the leading role they do for consumer-oriented e-commerce applications. It's About Doing Other People's Work Drawing your customers or partners into a more tightly integrated relationship is your goal. Developing the most secure relationship possible with new customers and partners is the challenge you face. And once these relationships are established, the overhead in both time and money for establishing relationships may approach zero. Accomplishing these goals requires an understanding of your partner's projects. Your site should not overtly focus on selling products over the Internet. It should provide all of the information and tools you have at your disposal to help your partner get the job done. Your site should become part of your partner's working mind-set because every purchase is tied to some type of project or process in your customer's organization. Ask yourself how your site can facilitate the workings of your partner's team. How you answer that question, in large part, determines the draw to your site and, therefore, the likelihood of purchases. Accomplishing this requires a plethora of data and applications--not just the order and payment process.

Other Columnists In The Middle By Bruce Robertson On The Edge By Art Wittmann Other Articles by Brian Walsh Education And Replication: No Free Rides RFP: Corporate Intranets Becoming A Master Of The Obvious Frustration And Exposure In Corporate America Application Backlog? Call A Plumber The Nuts and Bolts of Business-to-Business E-Commerce