The Nuts and Bolts of Business-to-Business E-Commerce

Cynthia Pearce, PhotoDisc's online design director, says, "It's a myth to assume that you build it once and you're done. Build, rebuild and improve by adding functionality and listening to the customer."

www.musicnewswire.com A new breed of Internet entrepreneur uses e-commerce to create opportunities for middlemen where none existed before. MischiefNewMedia, for example, has taken the elusive concept of online community and turned it into hard cash. It has created several sites, like Music News Wire, which it bills as a music news resource, that generate revenue from music CD sales--without taking payment for anything or shipping any product.

How is this possible? MischiefNewMedia's business is great content. It draws customers to its site, and once they select a CD, customers are then linked to a CD club's site for purchase and fulfillment. MischiefNewMedia collects a royalty for its efforts. Jason Hirshorn, president of MischiefNewMedia, says, "I'm in the content business. If I can attract people and make them want to sign on and check out what's new with the music scene everyday before they leave work, I've added value."

This business model is comparable to one where the mall owner and anchor tenant are one. Hirshorn's content draws the "foot traffic" of the Internet and makes a business of selling the prospect to CD fulfillment sites. The traffic on the site and the volume of content forced migration from static HTML pages to database-driven pages. Development and hosting were outsourced to Semaphore, a Seattle-based collocation facility. The sites are driven by a large Oracle Corp. back end hosted on Sun servers supported by multiple PC-based Web server front ends. The facility shares real estate with several carriers and provides redundancy on Internet con ductivity and fault-tolerant servers. It is hardened to environmental, carrier and electrical outages.

www.mediapassage.com MediaPassage has built a business around the notion of the broker as expert. Its founder, Carl Bryant, explains, "We use technology to make ad agencies more efficient. We make one of their most labor-intensive processes more efficient." Simply stated, MediaPassage knows everything there is to know about newspaper advertisement. Ever wonder how the same ad makes it into every paper in the country on the same day, positioned correctly? Well, that's MediaPassage's niche.

The ad agency simply uploads its copy and its requirements for placement to MediaPassage's site. Using an extensive database of information on every paper that's hosted by SQL Server and Microsoft's IIS (Internet Information Server), MediaPassage jumps into action. It places the order, delivers the artwork, takes care of quality control and handles the billing as well. As an incentive, MediaPassage offers its advert ising placement planner for free on the Web site. This expert knowledge legitimizes the site for the prospective client ad agency.

Measure Twice, Cut Once
E-commerce sites fundamentally are not about technology; they are about understanding users' needs, successful implementation and ongoing improvement. Successful sites emphasize comprehensive and realistic project plans, as opposed to technology evaluations.

There is no such thing as a typical e-commerce site. However, all good sites have two things in common--they feature great integration with the back-end databases and systems, and they make it easy for people to do business with them. Neither happens by accident; both require a realistic and achievable project approach.

For example, FoodService Purchasing Cooperative ran into obstacles. "Right away we ran into some roadblocks, and they weren't at the executive level," Lewis says. "The roadblocks were put up by the computer departments in our prospective trad ing partners. What they would do when approached is they would tell their management that 'Oh, we got to find out what kind of hardware, what kind of software, we don't have translations software, we don't know what a VAN is, there are lots of them out there, etc., etc.'

"So what we immediately did is we prepared about a 60-page book that I entitled "The Says Here" book," Lewis adds. "It has all the record layouts and also has a signed purchase order for an EDI software package from Supply Tech, which we think was the best value, as well as a signed order form for an AS/400 package from Premenos. It has a signed order form from [VAN] AT&T to hook up to the AT&T network that requires no more than simply an authorized signature. And these things can be faxed in, then the software comes, AT&T hooks you up and you're in business."

The lesson learned from FoodService's experience is simple: Approach your trading partners with a solution, not a problem. For an ally, target management, not IS, withi n your prospective partner's organization. This canned project plan approach worked for the FoodService Cooperative, enabling it to start doing business with an average of eight new trading partners a month over the past three years.

In a similar vein, the EUA's plan zeroed in on policy issues, business relationships, transactions definitions, database schema, network requirements, technical and business operations, training, testing and ongoing improvement.


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