It seems evident that the market has embraced eCommerce as the new means to drive down costs associated with Frame Relay, T1 and the use of EDI VANS by using the broad band functionality of the Internet. A strong Internet strategy will also increase competitive value by providing better access and real
time services to various customers regardless of geography. No longer is it a vision of what is to become, rather, it’s a present day reality and here to stay. Despite all the reasons for staying in the comfort zone of yesterday’s technology, IT strategists are forced to consider the impact of adopting new Internet technologies as a means of reducing operating costs.
The theme of corporate Internet use can be split into two camps based on the strategic value of adaptation. Some organizations look to provide a vehicle for business to consumer transactions, (B2C) while others look to streamline existing business-to-business processes, (B2B).
As I see it, there is much risk associated with the investment into B2C eCommerce as many Internet storefronts need the proper branding that this service requires, a very robust marketing effort is also needed to educate and cultivate consumers making everyday purchases over the Web.
On the other hand, B2B commerce is an everyday occurrence as organizations business people are continuously in contact with both suppliers and customers. In a recent Gartner Group report, they estimate that in 2004, eCommerce B2B transactions will be in excess of $7 trillion, while in 2002 this figure was only $145 billion. This figure is astounding, but not when you consider that worldwide B2B in 2004 is estimated at over $107 trillion per year. …..and things are busy now!
Understandably, every company wants to participate in this surge toward the Internet functionality. Before starting, it is essential to qualify, quantify and confirm corporate vision at ground zero before making any commitments. The secret to success for every IT budget proposal is to include some cost savings or rationale for process and quality improvement.
Ultimately, the goal is to link customer Internet access in conjunction with a company’s core business systems. If this is accomplished, it can reduce the infrastructure required to provide functionality and create a huge opportunity to reduce cost. It also represents a vehicle to provide better services to current customers by making your business processes and value available on a 24x7x365 basis at a reduced cost than building new customers.
Of course, skills required to accomplish this adoption and implementation are rare, but the stakes are high and traditional processes are under great pressure to evolve. My experience in implementing Web based access to our company’s SAP system made us rely on developing our own resources.
This is the opportunity for IT to make a leveraged difference between being a cost centre and being an innovative profit (enabling) centre. In addition, using the power of the Internet by building B2B functionality over wide band Internet will decrease the reliance for point-to-point infrastructure and accommodate the scrutiny of the toughest IT opponent.
Many eCommerce development companies have the ability to host and build content into a Web based presence, but very few have an intimate understanding of both core systems and Internet based transactions. A significant contributor to your successful planning, adoption and implementation of this enabling technology rests with the selection of your business partner. The appropriate partner would be capable of providing production references and display the knowledge skills, methodology and long term commitment necessary to provide your organization with a secure and complex solution for future business and profit.