Michelle Delio
Smart Business, 11/2000, (Micron advertisement following
p. 168)
E-commerce is essential to any company that hopes to compete in the new economy. International Data Corporation (www.idc.com) has projected that 46 million Americans will buy $16 billion worth of goods annually on the Internet by next year, and $54 billion by 2002. Jupiter Communications (www.jup.com) predicts non-service B2B e-commerce in the U.S. will be worth $6.3 trillion, or 42 percent of the market, by 2005.
That's why e-business is so hot. Increasingly, business people can bring their goods and services to a global audience and connect directly with their clients and business partners. It's about eliminating the middleman. And that pays off for both suppliers and customers.
But businesses pursuing e-commerce realize that they're encountering entirely new technical, developmental and operational challenges. Suddenly the world of nerds has collided with the world of business -not just big business but every business -and it seems that no one is speaking your language anymore.
The simple truth that gets lost in the confusion is that the fundamentals of e-business are the very same basics that fuel any successful business. You need to figure out what you want to do, determine the appropriate business model and then create the physical and virtual infrastructure, the service and support resources and the operating partnerships that will enable you to succeed in this new world.
Most businesses get their start on the Web via the "content only approach" -- a website that houses what is essentially an electronic brochure. This gives you an online presence akin to having an ad in your local yellow pages. It's an essential way to advertise and a good first step -- but it's not an e-business.
The next step, for most companies, is tying their website to apart of their business, usually by establishing an electronic catalog that operates 24/7 and makes it easy for customers to order products online.
Once that system is up and running, companies typically begin to totally integrate all of the core business functions with the website -- allowing ordering and credit verification, fulfillment and order tracking, inventory control, customer service, and client interaction to happen online. The end result is an e-commerce-enabled Web presence that is a true electronic extension of your company.
But how do you get from here to there? Start by reviewing the basics and making sure the essential building blocks for e-commerce -- business PCs, Web-hosting services, e-commerce partners, e-service and support, and online training -- are in place and up to the task.
Hardware is a crucial consideration that's often neglected in the rush to "go live" with a website. Before you launch an e-commerce site or upgrade your existing site, do a hardware and systems inventory.
The equipment that you'll need is dependent on your business plan. One size doesn't fit all, which is why we recommend customizing hardware solutions to fit your needs. But of course, any e-business needs to be backed by high-performance desktop computers and servers.
The best advice is to plan as if you'll be opening anew branch of your business -- because that's exactly what your e-commerce site is. Will you need more computers? Faster ones? Will you need graphics tools like scanners or digital cameras to get images onto the Web?
You also need to make sure your Internet connection is up to the new demands that will be placed on it. Chances are you already have contracted for a leased line (T1) or other broadband service. Check with your provider and see if it can help you assess your new needs. Or, if you're starting from scratch with an e-business, research several Internet service providers and see what high-speed connection options they offer.
Make sure any hardware you buy or services you sign on for are scalable -- that they can easily be upgraded or adapted to suit your changing needs. With PCs this means making sure the machine has available slots for more RAM and add-ons like a new processor, networking cards or graphics accelerators.
Most business computers, except for those at the very lowest end, are scalable. Many home systems are not. So it is best to stick with hardware designed for business use.
There's a lot to learn about e-commerce, and you won't be able to grow your business unless you really understand the rules of the game. A good way to keep ahead of the curve is to sign up for online training by industry experts or advanced self-study tutorials. You can save thousands of dollars on computer training for staff or brush up your own skills as your schedule permits.
Once you've got your computer equipment and systems in place, you'll need a home for your website.
Web-hosting services house the data that will be served up to the visitors of your site. There are several websites that make it easier to evaluate the various Web-hosting services. TopHosts.Com has a monthly Top 25 list of the best hosts and an extensive, searchable database of e-commerce information. HostIndex lists and reviews Web hosts (www.Hostlndex.com). And c|net's Builder.com is an excellent and very impartial resource for gathering information on hosting services (www.builder.com/Servers/WebHosting). [Added by JFS: Finally, someone searching for ecommerce web-hosting alternatives should visit the Web Hosting Search website for options, rankings, etc.]
You should, of course, make sure your host offers e-commerce services. That sounds obvious, but some types of accounts, such as those offered with basic Internet accounts, are for personal use and cannot be used for e-commerce.
Some sites offer free Web hosting, but these often lock you into limited design templates and into displaying ads from other companies on your site. This is not an area where you want to scrimp.
Once you have narrowed the choices to a few select hosts, find out what their performance guarantees are -- what percentage of time do they guarantee your website will be live and operational? And is the service scalable? If customers complain that your website is inaccessible or slow at certain times of the day, will the hosting company work with you on increasing access levels?
Also ask about security: How is your data stored and protected? Who has access to it? How is the physical location secured against intruders and natural disasters? Is your data backed up?
Be sure to see what other benefits the host offers -- will they help you set up services that enable you to process electronic payments? Do they offer online access to software that will let you build your site?
Obviously, your Web host is a core part of your e-commerce venture. The service it provides will reflect directly on your company -- visitors to your site will assume slow load times or service outages are your fault. And if the Web host goes out of business, or even mishandles their business, your business may go right down with them.
Recently Creative Good, a research and consulting firm, conducted a test of e-commerce sites. Representatives of the company watched 45 "average" online shoppers as they attempted to locate and purchase items from various Internet sites. Thirty-nine percent of shoppers failed in their buying attempts because they found the sites too difficult to use. And 56 percent of the search attempts -- using the sites' own search engines -- also failed.
Creative Good's CEO Marc Hurst speculates that if just 25 percent of those misfired search attempts had succeeded, online retailers would have earned an additional $3 billion this year. And when you add the $3.7 billion lost from the 39 percent that failed in their initial shopping attempts -- Hurst claims the result is a total of more than $6 billion in unrealized sales.
As you may have discovered, getting a basic site onto the Web is easy -- but getting a full-fledged e-commerce site up and keeping it up and running all the time can be a challenge.
Unless you're a Fortune 500 company with a slew of highly paid rocket scientists on your payroll, piecing together the various parts of an e-solution for your business is a difficult proposition. You need the proper hardware; you may need a company to host your website, build the site, and other applications to handle business on your end.
Companies are increasingly choosing to free themselves to focus on their core business by aligning themselves with partners who have significant technological and Internet experience. This can take the form of outsourcing components, or the entire e-commerce side of your business, to providers who can supply and maintain the technical requirements of a vigorous e-business solution -- infrastructure that's robust and can grow with you, the backbone to host your website and support electronic payment and delivery systems, education to keep you competitive, service that will keep your computers up and running all the time, and total accountability for every single product and service offering.
Before contracting with a partner, ensure that it has a strong service reputation, and -- if applicable -- a solid network that is built to handle heavy, round-the-clock usage. All outsourcing contracts should always include service level agreements with guarantees for uptime -- guarantees that the system will be accessible by users as needed, easy-to-reach help desk assistance as necessary, and immediate one-point contact support if problems arise.
That's it. Once you know where to look for the proper building blocks, e-commerce becomes as straightforward and understandable as any other aspect of your business. Don't allow yourself to get lost in the jungle of tech-speak and killer-apps-of-the-week. The key is to remember to use what you already know to make your e-business grow and be willing to think beyond the box.