E-Commerce - More Than a Website

Today, even the smallest companies are expected to have a presence on the Internet. Just a few years ago, only the leading companies included on-line customer ordering as a part of their sales and marketing strategy. This gave those forward-looking companies a competitive advantage in the marketplace, in that they extended their presence and image to customers who they might otherwise not reach. These companies also catered to tech-savvy, homebound, or time-pressed shoppers. Today, with the widespread utilization of interactive, web-based storefronts, that competitive advantage has diminished. In fact, the lack of such capability is increasingly becoming a competitive disadvantage. It is relatively easy to set up and implement an e-Commerce website. There are many very competent web developers, consultants, and solution providers with the experience to get you up and running quickly. However, there is more to e-Commerce than just putting up a website.

The website is the front-end, the link to the customer and the display of the brand and image of the company. This is very important, and requires a great deal of thought and planning. At least as important, if not more so, is the back-end of the system, the link to the rest of the business. With all the excitement and activity associated with the website, the back-end systems often get overlooked. This is not just a mistake, it can be devastating to the company.

Many organizations are simply not prepared for the changes that will come with the advent of e-Commerce. This is disheartening because it is not necessary. With the proper thought, planning, and education, the website can link successfully with the back-end processes that are the heart of the business. The e-Commerce site must interface flawlessly with the fulfillment, accounting, and customer service systems if the e-Commerce initiative is to succeed, and this can be done. The website must link with the fulfillment system, so the products can be delivered to the customer. But a new demand stream may place unexpected burdens on the fulfillment system. This new demand stream must be taken into account so that all customer orders can be filled. One possibility is that the website will increase total demand, which affects inventory planning and management. For a manufacturer, this affects the entire production process from planning and purchasing to production scheduling and manpower. If total demand remains unchanged, but supply point changes, this presents different challenges. If you currently deliver large quantities of your products to distributors and wholesalers, or through a brick and mortar store, the change to many, small, daily deliveries direct to customers throughout the country, or world, is a significant change that must be addressed early.

Linkages to accounting include the collection of payments, processing of returns and refunds, and the tracking of the order-fulfillment-payment cycle. Many of the requirements associated with the e-Commerce activity may be significantly different than what you are used to. You don't want to wait until the transactions start hitting to figure out what to do with them. The customer service impacts of web based transactions are very different than the transactions related to institutional customers, face-to-face customer interactions, and even phone sales. Customers who utilize the internet to make purchases have different expectations than other customers. The needs of these customers must be met as soon as the first order is placed, which means designing the system with them in mind.

e-Commerce is more than a website, and requires significant planning, education, and training prior to being undertaken. e-Commerce can also be very successful and profitable when implemented correctly. When undertaking an e-Commerce initiative, don't get overly excited with the website itself and the technology so that you overlook the important back-end issues that must also be addressed.

Education and training are important elements of an e-Commerce initiative. The managers responsible for the success and ongoing support of the system need to be educated about the goals of the initiative. There should be a clear justification for undertaking the initiative, and management must understand the justification. Management must also be educated in, and understand, the implications and impact on the company's operations. Employees must be educated about the needs for the system and how it will fit into the overall operations. The employees must be trained in the use of the system, and any revised processes due to implementation of the system. Top management must understand that this education and training is an investment in the business, just as the hardware and software that is required is an investment.

Steve Novak is the founder and President of PPR Management Services. An independant consultant specializing in Business Operations and Strategic Planning, Steve helps organizations improve their performance by improving their operations. Working in a variety of industries, from manufacturing to non-profit, Steve helpls organizations define their goals, develop plans to reach those goals, and execute their plans and measure their progress. Find out more at http://www.pprmanagementservices.com

Steve is the author of the book The Small Manufacturer's Toolkit, and is a frequent speaker and seminar leader in a variety of Business Operations and Strategic Planning related topics. Steve is the host of the Let's Talk Business! podcast and Let's Talk Business! blog, which can be found on his website http://www.pprmanagementservices.com