It's not just about success,
it's about survival.
By Frank J. Derfler, Jr.
Adding more dollars to the bottom line, increasing your
company's revenue opportunities, and capturing and maintaining an
edge over your competitors—these are what e-business and
business-to-business (B2B) e-commerce are all about.
Whether you're dealing with marketing, customer contacts,
purchasing, or any other part of your business, the theory is
simple: The Internet enables new ways of doing business that
are faster, simpler, and more efficient. If you make the
most of technology and the Internet, you can gain a competitive
advantage by improving the efficiency and effectiveness of your
That's all well and good, but where should you begin? There
are certainly dozens of vendors offering hundreds of products and
tools that promise they will magically turn your business into a
lean, mean e-machine. As you begin to research B2B, you'll
quickly find that to accomplish this task, you ultimately have to
integrate every part of your organization, including wholesale e-purchase
and retail customer relationship management (CRM) systems, as
well as internal enterprise resource management (ERM) systems
including accounting and manufacturing control, to name just two.
Many companies have found that the first essential step in
this process is to add the power of "e" to the supply
chain. One company that has realized this fact - and is acting
upon it by partnering with Commerce One and PeopleSoft to create
a vertical portal for employees, suppliers, and retail partners
around the globe, is the apparel vendor Guess?.
The vice president and CIO of Guess?, Bryan Timm, considers
the move crucial to his company's future: "We believe that
in order for Guess? to be successful in the future, not only must
Guess? apply technology effectively, but so must our supply chain."
For Guess?—a company that employs over 3,000 people
worldwide and sells its products through more than 3,000
retailers in the U.S. and hundreds more elsewhere—the
diversified nature of its business is what's driving the company
toward B2B, because it has to balance suppliers at different
levels with retail outlets around the world. The same challenges
face companies of all sizes today as they move into the new world
of B2B e-systems. The challenges are very real, but they're not
insurmountable. The reality is: The sooner your company realizes
that the Internet is revolutionizing the way every business does
business, the sooner you can craft your plan of attack.
B2B can provide competitive advantages, but it has to be right
for your organization.
A supply-chain management system has the most
value when integrated with accounting and manufacturing
applications, but custom integration isn't cheap. Six- and seven-
figure budgets are common.
Money draws flies. You'll need both electronic
safeguards—in terms of certificate servers and
proper authentication—and strong administrative security
Many suppliers of equipment and consumable products (like
Cisco and Grainger) have established CRM systems.
In many cases, you're better off going to the suppliers rather
than making the suppliers come to you.
Adopting e-purchasing brings corporate cultural changes for
both consumers and suppliers. When technology changes people's
jobs, you need to give as much attention to the people as
to the systems—or the systems will fail.
The road to e-supply...