AV-18-1737 Whit Andrews

Article Top View 17 September 2002

E-Commerce: Real Strategies, Real Benefits E-commerce success may depend on your ability to understand the varieties of ecommerce, and the technologies and applications supporting each. Enterprises that do understand can better reap the benefits.

As the adoption of e-commerce increases, the definitions that surround it have settled into several predictable sets. The dominant definitions for e-commerce, as enterprises generally propose them, are B2B (business to business) and B2C (business to consumer). The critical factor in each definition is where customers originate. B2B is generally considered to mean that customers come from another business, on whose behalf they are buying goods and services. B2C means that buyers are consumers buying goods and services for their own use, with their own disposable income or credit. Occasionally, installations for e-commerce are said to represent both B2B and B2C. We believe these distinctions are of less value than many others that may be overlaid on the complexity of e-commerce, without necessarily creating greater confusion. And while simple alphanumeric labels such as B2B, B2C and application to application (A2A) will likely survive, we hope enterprises will also consider other definitions as a way to further establish internally where their e-commerce strategy will travel during its lifetime. Consequently, we lay out the following set of definitions, which correspond to the typical phases an enterprise pursues in establishing e-commerce: Phase One: E-Commerce-Enabled Portal. Gartner has previously examined the issues inherent in an enterprises understanding of the difference between its portal and e-commerce needs, and how the two perspectives may complement each other (see Portals and E-Commerce: Different Goals, Parallel Projects). An e-commerce portal is primarily concerned with providing a window (indeed, a portal) for buyers to see what they may buy, what they have bought, and their status as buyers with relevant sellers. The focus of such a portal is not, in fact, taking and fulfilling orders, or managing the data flow even though these are critical to commerce. An e-commerce portal does not act as the origination point for commerce syndication or for dealer storefronts. It is the very simplest beginning for e-commerce, as it requires only a presentation template, a security system that validates buyers and assigns them privileges, and, finally, links to catalog data. Phase Two: Browse and Buy. Users who arrive at a Web site, pick through its catalog, place items in a shopping cart and purchase the items are said to be engaging in browse and buy behavior. They may represent an enterprise and pay for items with a purchasing card, credit card, purchase order or other account vehicle, or they may be consumers (sitting in front of a computer at work or at home) using a credit card or other payment method to purchase goods or services for themselves. Browse-and-buy installations dominated the Web through 1999. Enterprises still cite browse-and-buy as the most important e-commerce capability they can provide, followed by e-commerce portal capabilities. Phase Three: Integrative. After enterprises provide a window into their products and their buyers accounts allowing users to search, assemble and place orders they sometimes discover that unserved constituencies remain. Major customers often require that an enterprise provide syndication to
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their e-procurement facilities, typically run via installations of software from e-procurement specialists, such as Ariba or CommerceOne, or enterprise resource planning (ERP) vendors. An enterprises dealer or agent base may require that catalog data be syndicated and incorporated into its online catalog operations. A captive dealer base that exclusively sells an enterprises goods may require that dealer storefronts be erected within the enterprises own system, without syndication taking place. An enterprise may also need to use syndication to enable liquidation methods, such as those offered by eBay or a Yahoo-Store-powered storefront, or to provide its dealers with integrative services, such as eprocurement. These perspectives on e-commerce demonstrate its real scope and flexibility, but also demand new commitments of resources. We believe the integrative level of e-commerce best fulfills the potential of the concept and that enterprises must ascend to it before they can gain the most out of their investments. To address these issues particularly phase two and three we have assembled a variety of case studies. Features How Syndication Saved an Office Supply Vendor Suppliers that expect to require integration to more than three buyers e-procurement systems should explore immediately the use of a commerce syndication vendor. By Whit Andrews Consolidating Portals and E-Commerce in One Site Enterprises with more than 20 percent of their call volume devoted to product availability and 20 percent on account or order status should immediately consider a basic e-commerce installation. By Whit Andrews Samsonite Syndicates to Online Auctions Enterprises that are losing money on out-of-prime-life-cycle merchandise should consider integration to alternative sales channels. By Whit Andrews DuPont Paints a Pretty Picture for an E-Commerce Portal Enterprises leaping from barely any Web presence to a transactional commerce platform face risks, but may also gain high rewards. By Larry Perlstein E-Commerce and Digital Asset Management Equal Success Enterprises should determine if they can leverage established architectures when enhancing their Web sites. By Garth Landers Software Licensing: A Supply Chain Success Story Enterprises can integrate their back-end systems with applications that serve their reseller base for real-time supply chain automation. By Charles Abrams Recommended Reading and Related Research Commerce Syndication: Add Indirect Sales to E-Commerce Enterprises must deploy shared commerce services and commerce syndication to support channel partners or face lost distribution channels and irritated customers. By Whit Andrews The Sell-Side E-Commerce Platform Adds Another Element Enterprises considering installations or improvements of sell-side functionality should expect to use multiple vendors to achieve full capability through 2003. By Whit Andrews and Larry Perlstein

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AV-18-1737 17 September 2002

Case Study: Selling Safety Gear in a B2B Installation Small and midsize businesses will find that online order capture, basic order status and other commercial fundamentals will justify e-commerce projects, and set the stage for more-sophisticated, transformational innovations. By Whit Andrews People, Process, Technology: In Search of CRM Excellence Enterprises that use a strategic CRM framework to plan and promote their CRM implementations are twice as likely to achieve planned business benefits as enterprises that dont. By Beth Eisenfeld and Claudio Marcus Eastman Chemical: A Formula for Web Services Success Enterprises can use Web services to creatively distribute their knowledge bases and strengthen major customer and channel relationships. By Robert Batchelder

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AV-18-1737 17 September 2002