First steps

Your first e-business steps are the most important. Six e-business pioneers share their experiences with Mark Vernon

Your first e-business steps are the most important. Six e-business pioneers share their experiences with Mark Vernon

The experience of many organisations looking to move in on e-business is one of near panic. There seem to be so many questions to formulate, let alone ask, that they end up wishing the impossible - to start from a different place.

Typically a company might begin by launching a Web site in relative isolation to other channels. But even that can quickly run out of control. "An out-of-the-box product for an online shop can be set up within days, but that does not enable 'proper' e-commerce," says Christian Denning, software development manager at e-Net Software. "Most companies face the task of having to organise their product data. Even though there might be existing lists of products in some format, they normally have to be revised, pictures of the products have to be taken, the product info has to be updated, the prices verified."

This is trickier than most people expect and, financially, the danger is that it only generates a loss. "It's hard to believe that organisations are literally throwing billions of pounds down the drain every year," says Mark Hallett, UK managing director of Vitria Technology. And this is in spite of the availability of completee-bus- iness infrastructure products. "Instead of taking the necessary steps to facilitate successful e-business, companies seem content to continually patch-up critical systems for short-term gain," he adds.

Not that it is easy, for all the packaged help. "Setting an e-business project up and running is difficult," says Steve Vaughan, marketing manager at Symix UK. "However, if a company approaches it by using a comprehensive "roadmap", or a step-by-step plan, it will at least be more straightforward, and so less haphazard and less likely to go wrong." Another issue is that many companies have developed impressive Web sites, only to realise that they lack the IT and distribution infrastructure to back it up and fulfil orders.

Ironside's CEO Bill Lipsin points out that first questions in e-business actually have nothing to do with computer hardware, middleware or networks. "An organisation's e-business strategy must support the corporation's business objectives. That's where the discussion should start. The technical questions come later."

Typically consultants agree on four critical steps before deploying an e-business site.

Create a cross-functional team, bringing together sales, marketing, customer service, IT and the chief executive to drive the project. The point here is that even with an evolutionary approach, e-business changes the processes that deal with customers, channels, and internal groups.

Examining business objectives helps to bring focus. For example, a cost-cutting exercise will look different from one that seeks to find competitive edge. Note that this is the role of business decision makers, preferably on the board, not a matter for the IT department.

Focus on some quickly-achievable targets that can help win support within a sceptical, conservative or hesitant organisation. Quick wins are also good because they help to identify viable first steps so that toes dipped into the water don't get burnt.

Marketing the site is also critical. This does not just mean an advertising campaign but reacting to feedback from customers. Even the most carefully planned project will be experimental and so pilots and a reflexive approach once launched provide invaluable information.

One2One

(mobile phone operator)

System 21 development manager

Annu Uberoi

Why e-business? In short, because everyone was talking about it. One2One realised that e-business could do something for the company and there were many workshops running throughout the organisation, looking at EDI, the Web and so on. The only question was what to do?

What was the first project? Software supplier JBA approached One2One with an application that would allow dealers to order equipment directly online. Called Internet Stock Order Processing (ISOP), it seemed like something to try. A pilot was put together, an invaluable learning experience, and 10 months later the full solution was rolled out.

What were the technical challenges? ISOP was a new application for JBA too. Technical issues included developing the screens, enhancing ease of use, minimising roll-out costs and complexity for the end users. But most importantly was understanding the strategy for using it. Customer feedback in the pilot stage was vital for getting it right since dealers are typically technology-shy. E-business has to be a bridge to them.

What were the cultural challenges? It was a very new kind of project. One issue was simply communicating across the company, telling our business development people what we were doing. Many people were sceptical about the capabilities of the solution. They asked whether it was a real B2B solution or just a Web page. It is the former and so has initiated changes to order processes too.

Was it worth it? Yes. We can realise ROI by cost cutting. By 2001 it will be the dominant channel for dealers to relate to One2One.

Sainsbury (Retailer)

Program manager in supply chain systems

Jerry Bridson

Why e-business? Sainsbury saw that it made commercial sense in the supply chain. On the one hand it would reduce inefficiencies, notably by reducing paper costs and calls. And it would also reduce inaccuracies in data capture and make that data more widely available.

What was the first project? The firm had been using e-commerce in the guise of EDI since 1987 and this provided something of a role model. But EDI is expensive for SME suppliers and so the idea was to use the Internet to reach them cheaply. Kewill Electronic Commerce provides an intermediary solution to do this.

What were the technical challenges? Finding the right partner. When Sainsbury started looking there were many solutions out there. Now there are more, although the marketplace is more organised.

What were the cultural challenges? The firm required the new initiative to fit with existing business processes. Why fix what isn't broken, at least in relation to larger suppliers, was the attitude. Big changes to EDI-type processes would mean compromising existing supply chain data. Not that there isn't room for improvement, and so processes have been changed to some degree.

Was it worth it? Yes, and the message is: e-business need not upset everything, if it is kept simple. There are clear gains in certain areas, and less obvious ones too.

Bidabike

(Online bike auction shop)

Proprietor of DJ Cycles and Gary Latchen, technical director

Julian Chappell

Why e-business? Latchen persuaded Chappell that there was a future in using e-business to sell cycles and accessories. This led them to seek out a local Web development firm that claimed to specialise in e-business. After months of supplying content, it became apparent that the project was not moving any further forward. The original plans had to be discarded and a new approach developed.

What was the first project? A short time after this, in February 1999, Chappell contacted one of the large business-to-consumer online auction providers, his interest prompted by successfully selling bikes through traditional auction channels. However, the large commissions required tempted them to investigate setting up their own online auction.

What were the technical challenges? Latchen realised that it made sense to outsource the site, but having had a bad experience in the past, an area of high importance was the choice of development partner. Several OpenSite partners were vetted. They were particularly impressed with the services offered by Terra Nova Media, who could offer the whole solution - from branding, development, marketing, hosting to hardware solution.

What were the cultural challenges? An average visit to the Amazon Web site lasts four minutes, while visits to eBay lasts 144 minutes. The power of online auctions, as with traditional auctions, is in keeping people watching, playing on natural human emotions such as a desire for a bargain and also pure curiosity. The Bidabike Web site must do this.

Was it worth it? Bidabike went live in November. Typically it gets over 1,000 hits a week. It is clearly gaining momentum.

Fabulous Bakin' Boys

(Muffin manufacturers)

UK Marketing Manager

Tom Russell

Why e-business? This muffin manufacturer was a traditional business with a dusty, baker's image. The company wanted to develop more relevant offerings that could be related to by a younger consumer, which meant getting onto the Web. A dull product site had gone online but it was virtually worthless.

What was the first project? This old Web site was completely reworked. The idea was not only to sell muffins as quirky gifts, adding value in order to increase margins and make it viable but to also encourage customers back again and again. This has been achieved by putting a 1,000 joke database online as well as downloadable games.

What were the technical challenges? The company went straight to an agency, realising that the kind of thing they wanted to do required pretty advanced Web programming. "We make muffins and can marketing them, but although we can see how to apply technology, we do not do technology," says Russell. Skills were easy to find because the company knew what it wanted.

What were the cultural challenges? At first the IT director did not understand the role the Web had. It was a classic case of resistance to change. He thought that the Internet was a waste of time and a distraction, an unnecessary marketing tool that kept crashing.

Was it worth it? The new design saw a tremendous upsurge in traffic. It is spreading the word about the company and selling muffins. We now have three different Web sites for three different channels to market.

Sage Group

(Accounting software supplier)

business development manager

Andrew Buckley

Why e-business? Demand came from our customers. Sage had been looking at what e-business could do for some time and issued a strategy document in the middle of 1999. Formulating and implementing this has focused on helping customers to the Web and developing their own Web strategies.

What was the first project? The idea was to take desktop products, embed Internet functionality, and add value. Features to date include online credit checking, tracking parcels and address verification. A second strand has been to develop Web-based applications to help customers get online.

What were the technical challenges? With e-business everything goes much faster. The level of uncertainty is greater. Upgrades have to be on a regular cycle. Services have to be more customer focused and improve content. To do this the new facilities are provided by a single Internet link to the customer's desktop so that what is on offer can be changed centrally and frequently.

What were the cultural challenges? The speed of change, again. Sage has adopted an evolutionary model, beginning with products as they are and moving them forward, in order to keep control of the business implications. In this way their credibility, particularly with SMEs, can be preserved.

Was it worth it? The next stage is for Sage to become an applications service provider in its own right. This is a big change since it requires a new modular approach to products.

Stralfors

(Office suppliers)

IT development manager

Magnus Lindberg

Why e-business? Customers said they wanted it. This was timely in as much as the office supplier was looking to develop a new business system and so e-business functionality could be added from the start.

What was the first project? Developed with Intentia, the project was driven by customer needs. The idea was to mirror purchasing behaviour and add value. The solution is an online procurement system but it required new business logic too, so that customers, for example, could configure products themselves as they wished.

What were the technical challenges? Stralfors put four months aside in order to get all the parties who would be impacted by the project together. This included logistics, customer service, suppliers as well as IT. The solution took six months to develop and a two month pilot was also important in getting it right.

What were the cultural challenges? E-business means process change. Stralfors thought hard about how to make the channel easy for customers. It also suggested internal changes since systems were being opened up to customers for the first time, with various security implications.

Was it worth it? The project has improved processes and information flows, leading to significant cost reductions. After nine months, 12% of orders are being taken online. being taken

This was last published in April 2000

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