Moving Your Company Online (Part 1)

Electronic commerce has the potential to change your company’s balance sheet dramatically. Think of the possibilities, the sheer numbers of potential customers, when your company’s products and services are accessible at an electronic storefront. You’ll be part of an electronic community, and you’ll be providing one for your clients. You can provide greater customer service, immediate product and account information, and the ability to take customers’ orders as quickly as they can click a mouse. You’ll be automating essential business functions and increasing productivity and customer satisfaction. You might say you don’t have enough people or money to implement such technology, but the benefits will far outweigh the costs if you approach the initiative after doing all your homework. The best place to begin is by examining your company’s goals and objectives. That’s what we will cover here. Ask yourself the question, “How do I get my company into this new world of electronic commerce and allow my customers to enter transactions electronically, all at a lower cost?”

Companies with successful Web sites have used a number of techniques and processes to make their electronic business efforts a success. We’ve outlined some of the techniques and processes that should provide you with a solid starting point for developing your company’s Web business strategy. It will be important to address each of these topics as you begin to build your electronic commerce site. Electronic commerce-enabled Web development issues are often interconnected, much like your company’s balance sheet and income statement. For example, how can you turn customer traffic to a simple Web site into revenue you can recognize at month-end? By starting with these issues you will undoubtedly uncover other areas in your company that need attention, such as your company’s marketing strategy and how you may need to modify it to include electronic sales.

When you start a Web business initiative you will need to review your business processes that impact customers. This is a great time to determine how you can simplify those processes or interactions and at the same time provide new services over the Web. This could include incorporating one-to-one marketing programs and other customer-focused initiatives. The Internet lends itself to direct interaction with each and every customer. As your Web site design and development evolve, you will be continually refining them, expanding the programs that have been successful and curtailing your efforts regarding the ones that have generated little bottom-line revenue.

Planning your site
Begin the venture by examining your objectives and options. If you’re contemplating bringing your business to the Internet, first identify what you want to accomplish. If you’re there already, it isn’t too late to reevaluate. Regardless of your success so far, it’s a good idea to ensure that your company’s Web site is becoming integral, rather than supplemental, to your business and revenue goals. To generate new customer traffic and maintain the loyalty of your existing customer base, you’ll have to constantly reevaluate and improve your customer-based Web site. Talk to your customers and uncover unique ways you can add value to their experience. Define the scope the Internet will play in achieving those objectives. The key is to develop a site that not only meets customer needs today but is continually responsive to their changing expectations.

Your Web site can provide you a number of unique opportunities to expand your customer offerings. You can give your customers the ability to order products, request a service call, research the latest product information, and check on the status of an order. Each of these interactions lets you capture information about your customers and expand their profiles. The ability to continually add value to a customer’s experience is the cornerstone to a long-term business relationship. Why would they want go anywhere else?

But as with any new company-wide initiative, you’ll need the right people, approvals, and money to develop your Web site. Great Web sites often are created and then die on the vine because of upper management’s unrealistic expectations. When you approach your company’s executive management team, outline the benefits of a strong Web presence. These benefits extend far beyond providing company and product information. You need to paint the vision for a Web site that is based on providing new and improved customer service at a lower cost. Conduct research on success stories of electronic commerce sites, and try to determine the figures regarding these companies’ return on investment. You also need to explore the sales opportunities with your sales and marketing teams. These departments can be strong allies when you’re developing your approach to your Web initiatives.

Ask yourself the following questions:

–  What are our near-term goals? Do we want to reduce costs? Improve customer service?
–  What are our long-term objectives? Do we want the Internet to become a mission-critical component of our revenue base?

These questions are important because their answers will determine your company’s financial success on the Internet. The investment your company will need to make directly correlates to your goals and strategy. For example, to create an electronic commerce site that is fully integrated to your back office business applications, you can plan on earmarking about $150,000 and going up from there. That might sound like a very significant investment, and it is, but the stakes are high. One successful site reported that by allowing customers to purchase over the Web, it reduced the cost of order processing by more than $7 per order. Take time to find the right strategy, then secure management’s ongoing commitment to the evolution of Internet capabilities and periodic reevaluation of your objectives.

The process of site planning can be broken into a number of sections. Depending on you or your business, you may want to add even more.

Who are your customers?
Know your audience, and focus your message to them and only them. We all learned about segmentation and selection in Marketing 101, yet we often forget those principles when we’re brainstorming about Web presence. This is the point where all key areas within your company (marketing, sales, management, operations, and customer service) need to pinpoint departmental objectives for the Web site.

The brainstorming process should be free-form with significant time spent sharing ideas, concerns, fears, and objectives. Everyone within the company’s sales, marketing, operations, and support areas � and any other group that interacts with the customer � should participate. Develop a Web mission statement for each department, then spend time on the Internet looking for sites and companies that have achieved results. Take their ideas and adapt them to your site. The marketing team has to consider how it will deliver value to each individual at an adequate budget on the Web. Examine the budget carefully, and be realistic about what you can afford to do. It’s better to scale back the grand vision for your site and do an initial implementation well than to try and create an award-winning site immediately. And keep in mind that you will need to budget for ongoing maintenance and the evolution of your site.

What corporate image do you project?
What type of global image do you want to present? Do you want to be a Land’s End or L.L. Bean or an Etcetera Caf�? As you develop your Web commerce site, you’ll be forming or revising your corporate image depending on the progress you’ve already made with your Web presence. It’s important to convey consistent corporate images across the company–both online and offline. Be aware that the World Wide Web is truly worldwide, allowing for the creation of thousands of first impressions. Your company’s values, culture, and product should ring through clearly in any language or culture.

You’re going global
Your Web site will reach an international audience. You must be prepared to deal with the complexities and legal requirements involved with shipping your products overseas. For example, one manufacturer of aromatic oils couldn’t ship its product into the United States because it had the word “therapeutic” printed on the label.

As you approach the global market of the World Wide Web you’ll need to determine in which countries you want to do business and which ones you’ll skip. Your answers will affect your accounts receivable and accounts payable, as well. Your company needs to develop policies regarding how it will address these issues in advance. International commerce issues may impact other areas of planning, too, including product selection, design, development, and testing.

Selecting products for a global customer base may be new for your company. You need to determine whether your product will appeal to global customers. Once you offer your products for sale on the Web, you’ll be competing in a unique, demanding, worldwide marketplace. To be successful in this market, you must be able to ship your product with minimal effort. That means a solid understanding of international shipping and local product requirements is critical. If international customers weren’t important to your company in the past, they will be in the future. With a global presence you’ll have an opportunity to reach new markets and introduce your company to a new customer base, increasing awareness of your company’s products and services beyond your wildest dreams.

How to deploy: To host or not to host?
Hosting services vs. in-house development. This is an important question to consider as you move forward with Web-based projects. To implement your own Web site within your company will require a significant investment in infrastructure. This investment includes bandwidth, hardware, and, more important, personnel to maintain and update the site. View these resources as a strategic investment. If you view Internet technology as core to your entire business process and subsequently choose to develop your electronic commerce site in-house, you’ll have greater flexibility. People often think it’s cheaper to have someone else host their site. That may be an effective first step, but soon you may want other options.

Deploying your Web site from your company’s physical location may be advantageous because you’ll have the ability to:

–  Maintain direct control,
–  Make changes easily,
–  Respond quickly to market trends, and
–  Enjoy greater overall flexibility.

If you’re successful, your Web site will become a competitive advantage and you will, over time, migrate mission critical applications and processes to your site. When this happens, you may want to have direct control self-hosting provides.

Conversely, there are a number of reasons you might want to have your site hosted by an Internet service provider. Typical benefits include:

ISP hosting costs less
You won’t have to develop technological skills related to the Internet
It is easy to maintain a fairly robust solution
It is easier to get scalability in both bandwidth and computing power
The key to a successful hosted solution is in picking a partner that can offer all of the above at a reasonable cost. The biggest benefit in a hosted solution is that it costs less upfront for the necessary Internet infrastructure, and personnel costs are lower.

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