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  Who's Minding the Store? Before You Choose a CSP, It Pays To Investigate December 15, 1998 | ||||
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By Christy Hudgins-Bonafield If e-commerce is a windfall for some, it's already knocking the wind out of others. In a monumental rush to mine e-commerce gold, merchants are opening stores on the Internet without first educating themselves about the risks, hard work and staffing nightmares that await them. That's a big reason we examined the infrastructures and services of those who represent the quickest route to online commerce--the outsourcing businesses increasingly known as commerce service providers (CSPs). Tapping into full-service CSPs to build and maintain commerce sites may be a great way for businesses to build new revenue streams--but e-commerce provisioning currently resembles an entrepreneurial Wild West. Garage operations may have Web pages that rival huge CSP organizations in professionalism. Resellers abound--from the one-man design shop to huge operations co-located at the sites of even larger CSPs. There are CSPs that say they can meet your every need, without knowing if the consultant they have in mind is available or knowledgeable enough to handle your business. There are pricing models with so many hidden charges they give new meaning to the notion of being "pecked to death by ducks." We found CSPs without firewalls that think nothing of running commerce servers--with credit-card information--alongside all their other servers, rather than in a locked room (see "Is the Mine Safe?" page 70). We also found CSPs that are appalled when they hear about such security practices, that always have at least twice the bandwidth available as their latest bandwidth peak, that maintain adequate support staffs and hours, and that possess a wealth of programming expertise. Many of these are represented in the CSP profiles that follow. To succeed at outsourcing your e-commerce service, it helps to remember a few key points: · Partner with a conscientious CSP. You may have to look further than your local ISP or telco to get the kind of expertise and value you desire from a CSP. You should approach e-commerce outsourcing as you would any new business launch: Have a business plan, find the right location (perhaps a portal), promote the new business, change your storefront window regularly, and offer discounts, coupons, personalized service or whatever it takes to get customers in the door and leave them satisfied so they want to come back. · Don't expect overnight success. Michelle Ruyle, director of marketing at Concentric's AnaServe, estimates that a small business can recoup a minimum investment (say, $50 a month for service, $500 for Unix-based commerce software, $100 for payment processing systems, plus transactions fees) in about four to six months. Of course, a lot depends on whether the items sold cost $500 apiece or $5. Either way, it takes time to build a business, whether your shop is on the corner or on the Net. For some businesses it makes sense to start small--maybe even go to a prefab CSP shop, where you can design your own commerce page using simple templates and a browser. · Don't forget that the back end of the business is just as important as your window to the world. Many businesses, for example, invest in the front end only to find that there's no easy way to integrate that front end with their back-end business systems. They also discover that the data entry otherwise required to make the systems mesh often negates the expected economies of handling business online.
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How We Profiled CSP Services" CSPs:Who, What, Where and How They're Networked Cashing In on E-Commerce "The Electronic Crane: E-Commerce Infrastructure Builds Upward," "Rushing Headlong After E-Commerce Gold: Is the Mine Safe?" "Four Solutions To Rev Up Your E-Commerce Business," Breadth of Service Survey Infrastructure Survey Small Merchant Services
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