Guess goes B2B e-Commerce

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 business communications.

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.

Reality Check

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 practices.

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.