INDUSTRY ANALYSIS

Is Your E-Commerce Strategy an Asset or a Liability?

It’s time for a reality check: When it comes to managing e-commerce strategies in your company, how do results line up with expectations?

Too many companies hold on to incredibly inefficient Web sites chock full of order capture systems that lead nowhere except to someone’s Outlook folders, or catalogs that were last refreshed in 2001. There are even customer service links into general mailboxes not cleaned out before the start of this century, and quoting systems that have multiplied over the years with no common strategy.

In short, many companies have e-commerce chaos on their hands and just live with it, content with the 5 percent or less of revenues these systems generate even when they had expected to be earning 30 percent by this point.

It’s time to evaluate your applications: Is e-commerce an asset or liability for your company?

E-Commerce Assets

  • A solid integration strategy should synchronize lead management, order capture, order status, inventory positions, pricing, fulfillment and service across all channels. Having this asset pays off where it matters most: consistency and responsiveness to your customers. Without it, your company looks untrustworthy and scattered, out of touch with what’s going on in other channels.
  • The best lead-management strategies have the ability to automatically date-stamp leads and escalate them depending on previous activity. Coupling this with analytics is essential. BlueRoads is one company that offers this unique combination of features. Siebel’s strength in analytics shows up in this area, as does its dominance of the PRM market.
  • Order capture applications should feed orders directly into ERP scheduling systems for order validation. Instead of having someone swivel her chair from the order capture screen to the ERP system on the other side of her cubicle to key in the order — this happens even today in one major PC manufacturer for special orders — the orders once captured need to be automated to the point of being scheduled in the ERP system for production. Swivel chair integration kills productivity.
  • Content management systems should be designed for mere mortals. There are over 260 different companies serving the content management arena — this includes search, taxonomy creation, portals and structured content — yet only a few companies have all content unified in a single repository. The best e-commerce strategies have consistency of product taxonomies across all structured content and strategies for capturing unstructured content as well.
  • Customer service is not an oxymoron. What’s impressive about the companies excelling at e-commerce is this: They selectively choose customer service applications to increase response speed and accuracy, and the processes in their services strategies are easy to use, understand and execute. Oriental Trading Company, a specialist in party supplies, has taken this approach and executes flawlessly because it layered in self-service on what was already a strong customer service organization.
  • No quoting system is an island, it’s a peninsula. Using scalable integration platforms to deliver consistent channel, partner, service center and a direct sales quotes that reflect what your company can deliver is a strong competitive advantage.

E-Commerce Liabilities

  • More hand-built adapters than a holiday craft show. Sure, they’re convenient and easy to make, but are they useful? Too often adapters that get hand-coded give a false sense of scalability to any company using them, and often they break down when they are needed most. For consumer-focused businesses, that would be now.
  • Lead management doesn’t have the ability to rank-and-spank. If you can’t rank your leads and provide positive and negative incentives to channel partners or your own direct sales force, your lead management approach is a liability. When you see companies taking nine months to close out a lead, it’s time for a change.
  • Order capture systems that capture little more than customer data. Ugly as it sounds, some company’s order capture systems are nothing more than manual screen scrapes of what a customer wants, and the only “live” data is the contact information. When it comes to worst practices in e-commerce, this deserves the Oscar for worst performance by an application that could deliver revenue. Welcome to the dollar drain if this is broken in your company.
  • Customer disservice. There’s nothing more maddening than a Web site that has the friendly fill-in-the-blanks customer satisfaction forms that promptly take your responses to either a phantom e-mail box or, worse, into a database created when Steve Ballmer had hair. It is amazing how many companies ask for feedback from customers and never acknowledge it when it arrives.
  • So many portals, so little time. With the proliferation of portals and their surprising sexiness earlier in the year, it’s a wonder my dog doesn’t have his own portal around what build-to-order dog food he wants for the holidays. Seriously, in the companies I’ve visited and worked with, portal mania has set in. Microsoft’s SharePoint is the Kleenex of this arena, inexpensive, trustworthy and easy to use. Portal proliferation should continue into 2005, unabated, but the lack of strategy of these proliferating portals is worst practices in action.
  • Order mismanagement. Right up there with order capture, order management systems are top contenders for any Oscar for worst performance by an application that could deliver revenue. This is where many of the failed e-commerce implementations are happening today.

Bottom Line

First, dissect the business processes that support your e-commerce strategies. No sense giving an e-commerce vendor hundreds of thousands or even millions of dollars to get you to chaos faster.

Take stock of where you are today and build selectively, tallying up your e-commerce balance sheet as you go. The best performing e-commerce companies have figured out how to speed up the iterations of their strategies, arriving at a set of applications that really does deliver on the promises of e-commerce. Never a one-and-done proposition, it’s a continuing strategy that pays off.


Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research. He currently works in the software industry and recently published the e-book Best Practices in Industry Analyst Relations, which is available on Amazon.com.


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