![]() Your E-Commerce Site: Build, Buy Or Rent? |
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All of a sudden it's not as simple as it seemed. But it's not rocket science, either.
Think you know more than the folks at MSN? Think you have more talented developers or more tools than they did? Think your track record is better than the industry average (to really find out go to www.standishgroup.com/chaos.html)? Even Microsoft has to banish the "not-invented-here mentality;" it's the only way to keep up with growth. The Checkbook View What does the bottom line on this venture look like for a Fortune 1,000 company? Well, prepare yourself for sticker price shock. See, the short history of the Web is unlike the even shorter history of e-commerce. Unlike HTTP servers and browsers that started for free, moved to inexpensive and are now practically free again, the birth of the e-commerce industry has brought with it some significant expenses. In many instances it's a case of: "If you need to ask how much it costs, then you can't afford it." Examine the Web sites of some of the leading Internet software companies. For example, Netscape provides the price, documentation and download image for most of its popular products and tools online. Now try to find out the same information for Netscape's CommerceXpert line of e-commerce solutions. The prices are missing. Take a hint; this ain't cheap. I recently spoke to Security-7 Software, which makes a buyer's side e-commerce product that is fairly complex, with lots of customizable features. The software installs in a flash, integrates at the hip with SAP R/3 and is implemented on BackOffice using Microsoft tools. It also addresses a pertinent area that's dear to most controllers' hearts--corporate procurement--and it has a demonstrable return on investment story. All this for only $250,000 to $500,000. However, the company promises to reduce the cost of an average corporate procurement from $150 to $7 per purchase order. Go ahead--do the math. Forrester Research recently published results of a survey that showed 30 percent of companies spent more than $500,000 on e-commerce implementations and 20 percent spent less than $100. As more midsized companies jump onboard, two things will happen: One, in the short term, the e-commerce software vendors' bottom lines will get a significant boost. And two, in the midterm, prices for this stuff will start to fall. It has to happen this way; it always does. But this is not an argument to wait on for an outcome. At this point, you will not be an early entry into this market. Rather, you'll probably be a cautious entry into a market that's still in its infancy. Sending Your Site South There is a new platform to consider. It's not another Unix versus Windows NT versus Macintosh debate. This new platform is simply "hosted off-site." E-commerce can be a subscription, rather than a product or an architecture. Really, who c ares how it gets done? Simply outsource it the same way you outsource remote access or legacy hardware. Yes, services are out there and more are on the way. Examine the cost for development versus the actual value to the corporation. Then compare that to the availability of talent and capital. What are your alternatives? You have none, other than to buy the best turnkey package you can afford and concentrate your development efforts on the things that truly make your organization stand out. What can you accomplish on your Web site that is too difficult for your competition to match? Most likely this will come in the areas that attract and retain visitors at the site, like creating some interest or need in the customer for your widget or service, and then convincing them to translate that need into an order. Susan Aragon-Stemel, manager of networked commerce IS at Cisco Systems sums it up in a nutshell, "Customers visit us and tell us how impressed they are regarding the functionality of the site and the amount of revenue and cost savings that flow from it. However, we started with very simple, small steps. We set a goal and identified the low hanging fruit. In our case, that was the order-status check. Delivery of routers and network components are critical to our customers and accounted for the majority of calls to our customer service representatives. Therefore, the status agent was our first commerce application. It provided the exact same information as our internal systems did, and it both pleased our customers and reduced the number of calls to our representatives." For those planning their foray into e-commerce she advises, "Identify who you are, what your goals are, what you are willing to invest, provide intermediate results and plan for success. Sites have a way of taking off and you want to start with the right solution in place." Brian Walsh is the founder of bwalsh.com, Portland, Ore., a networking and communications consulting firm specializing in Internet and client/server produ ct strategies, development and testing. He can be reached at www.bwalsh.com. |
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