Best Practices in E-Commerce

Too many companies seem to believe that the right technology is the key to e-commerce success.

But the firms that really make e-commerce pay off don’t simply hand over their e-commerce destinies to consultants, system integrators or vendors.

Instead, they undertake the hard work of self-examination. They realize that streamlining processes is the key to success. And only internal effort can deliver that — it can’t be bought.

Many of the world’s largest companies are now on their fourth or fifth e-commerce strategy. But just because these global corporations change e-commerce strategies faster than some of us change cell-phone plans doesn’t mean your company has to keep up. In fact, some of the most successful manufacturers are still on version 1.0 of their e-commerce plans.

Winning Strategies

A look at successful e-commerce firms shows the path to follow:

• Turn e-commerce into a utility. In the ’90s many companies turned their e-commerce strategies into protected silos, and the people running them were seen as high priests of all things Web-enabled. All of that is gone now. Smart companies have turned e-commerce into a utility that any department can plug into and use. Expect to see IBM, Microsoft, Oracle and SAP battle it out to provide the transaction dial tone for small and midsize businesses.
• Pay attention to the life of an order first and to multiple channels second. At first glance this may seem unrelated, but even Amazon struggles on this point. Following an order from the time it’s placed on the Web site to the point where it’s reported back to a publisher takes a lot more effort than people realize. Contrary to legend, Amazon is not perfect in its order capture and order management systems. What’s reassuring is that for Amazon making sure these systems work is a higher priority than spinning out another channel.
• Consolidate portals and content management systems. It’s astounding how portals have proliferated at some of the world’s largest manufacturers. One global auto manufacturer has over 65 portals in its design division alone. It takes one of the e-commerce team members one day a month just to update the roadmap for the portals. Cutting back on portals for channel partners is also a great idea, and the companies that are getting the best results are discontinuing legacy portals in favor of new ones that have the functionality to support lead management and escalation, order capture, order management, fulfillment options and service requests.
• Realize that swivel-chair integration is the Achilles’ heel of any e-commerce strategy. With an average deal size in the five figures, one systems manufacturer had until 2004 relied on the swivel under the seat of its production scheduler to move orders from the order capture system to the ERP system. This production scheduler then created the bills of materials and scheduled a production line sequence to fulfill demand. This is worst practices in action. Even the smallest amount of investment in integration would free production schedulers to do what they do best: get on top of assemblies forecasting, work to resolve bottlenecks on the production floor, and generate ideas on how to streamline fulfillment.
• Target the installed base. During the last economic downturn, many manufacturers clung to viability by relying on purchases from their installed base. Build strategies for selling into your installed base with a goal of growing this revenue stream. Revenue from your customer base is no longer a divine right: You will have to fight to keep it.

Bottom Line

Delivering best or worst practices in e-commerce strategies has nothing to do with company size or even the size of IT budgets. It has everything to do with realizing that your order capture, management and fulfillment systems still confuse customers; that integration is worth the cost; that your company could do with fewer portals; and that your installed base and service life cycle management is worth paying attention to.