Some organizations have such unique requirements that it may be impossible to outsource B2B (business-to-business) eCommerce websites. For the rest – including some control-oriented organizations – lingers the illusion that if you do it yourself, you're more in control, says Sam Bayer, founder and CEO of b2b2dot0.
“Never entering into their decision making process is the reality that with added control comes additional responsibilities and costs,” Bayer said. “Like anything else in life there are trade-offs and every situation is unique.”
Software as a service (SaaS) has gained traction in the CRM sector thanks to firms such as Salesforce.com and NetSuite, as well areas such as human resources, through SuccessFactors, and billing via the likes of Zuora, according to Stuart Lauchlan, news and analysis editor for MyCustomer.com. The overall message is that SaaS is spreading beyond its 'traditional' markets.
A good example is the ecommerce sector. According to research firm Gartner Group, by 2013, 40% of eCommerce deployments will use a complete SaaS ecommerce solution while 90% of eCommerce sites will subscribe to at least one SaaS-based service. These could include elements such as product reviews, product recommendations or social sales capabilities. Organizations that face challenges such as lack of budget for people, hardware and software – yet still want ecommerce capabilities – will find SaaS ecommerce appealing.
The conventional wisdom is that ecommerce SaaS solutions enable companies to compete online with live websites that even provide individual services, such as product reviews or click to call, that can be incorporated into eCommerce SaaS platforms, as well as on sites that are using licensed software.
Automation Considerations for Outsourcing an eCommerce website:
Time to value – When customer service representatives (CSRs) handle phone calls, faxes, and emails for routine orders, money and human capital are wasted. More importantly it prevents CSRs from performing critical customer-oriented activities such as up-selling, training, and troubleshooting. “If an SAP-based manufacturer has a B2B website, but for whatever reason it isn't connected to the SAP system, it is costing time and money to keep the two synchronized, so that customers at least have the impression of a real time integrated system,” b2b2dot0's Bayer said. “Either way, most firms grow tired of these inefficiencies and concomitant inferior customer service, and inevitably conclude that outsourcing an eCommerce website is the best solution.”
Personnel – Few companies are prepared to hire, train, and sustain the web developers and designers, network and system administrators, security analysts, ABAP (Advanced Business Application Programming) programmers, SD functional analysts, business analysts and project managers required to develop, integrate, and maintain a B2B website. Even fewer companies are prepared at the prospect of backfilling any one of these positions when personnel decide to take a job elsewhere. The reality of these internal personnel issues often makes outsourcing an eCommerce website quite appealing.
Cost – Beyond missing out on the value that could be provided to customers on a daily basis, cash is being allocated to buy hardware, software, and pay salaries that could be invested elsewhere in the business. Internal eCommerce websites often require firms to hire and retain at least one full-time web developer to maintain the website over time. The lowest total cost of ownership for many SAP users is to outsource the eCommerce website. “Every day past two months that a high volume eCommerce manufacturers is not in production, money is being wasted,” Bayer said.
Best of breed functionality – The best outsourcing eCommerce website firms are responsible for volumes of B2B implementations and are able to observe and correct countless of mistakes, solve for interesting and challenging eCommerce requirements and develop great ideas which benefit all their customers.
Lowest risk - Any IT project involves risk. Risks vary, but include technologies and designs that should have worked that do not, dependable key people that leave the project, committed funding sources that dry up in a changing economy. Reaping the rewards of a B2B project must trump the risks and exposure of IT projects risks; outsourcing eCommerce websites creates the immediate rewards without the IT project risks.
Project management – B2B website projects can be quite challenging to manage. Multiple parts of the organization from marketing, customer services, sales, IT infrastructure, SAP Management, operations (Fulfillment) and product management must all be engaged and involved in the process. Multiple technologies are utilized, each with their own language: SAP, networks and firewalls, application servers and web servers, web pages with html, css and javascript, databases and programming languages.
Focus – B2B eCommerce projects are never the only project on the business plate and no one in a successful organization has the luxury of dropping what they are doing just to work on the B2B project. Distractions are pervasive and many of them legitimate. “(We have) often observed that when the inevitable challenges surface on a B2B project, people seem to disappear to work on other priorities,” Bayer said. “Outsourcing eCommerce firms don't have that luxury and are extremely focused.”
Saugatuck Technology, a Westport, Connecticut-based research firm, found that between 2009 and 2012, at least 40 percent of mid-to-large enterprises will seriously evaluate SaaS-based "core" financial systems of record, as well as broader operational requirements (such as order management, procurement, ERP, HR). Of these, approximately a third will choose a new next-gen SaaS solution provider, a third will migrate to newer SOA and SaaS-based versions from their existing software vendor and a third will postpone making a decision.
Since outsourced B2B eCommerce firms do only one thing, there are no distractions from ensuring that firms succeed with their B2B eCommerce project.
Author Profile:
Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc, (www.trcutlerinc.com). Cutler is the founder of the Manufacturing Media Consortium of three thousand journalists and editors writing about trends in manufacturing. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, Committee of Concerned Journalists, Society of American Business Editors and Writers, as well as author of more than 300 feature articles annually regarding the manufacturing sector. Cutler can be contacted at trcutler@trcutlerinc.com.
Sources for this article include:
*Sam Bayer, b2b2dot0, www.b2b2dot0.com
*William S. McNee, Saugatuck Technology, www.saugatech.com
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