Companies today realize that if they want to stay in business they will have to enter the e-commerce fray. Specifically, they must embrace Internet Protocol (IP) based technologies. "If you want to be in business, you need to be in e-business," says Elena Christopher, senior analyst at Gartner DataQuest in Egham, England.
The radical change in the way commerce can be transacted has created a fertile marketplace for outsourcing suppliers who are experienced with ecommerce solutions. Their first market consists of the pillars of the old economy. These existing companies must reorganize and learn to do business in the new paradigm. The other sizable market is the dotcom start-ups that are poised for launch. They are conversant with the new economy but need to learn how to do business the old fashioned way, too.
Both kinds of companies have substantial IT requirements to achieve their new economy missions. Most firms are finding they don't have the skills to accomplish this massive transition in-house. Or, if they do, "they don't have enough of them," says Christopher.
For example, retailers realize they must offer their goods on line, too. But few have the programmers to design an e-commerce site or the back end to monitor all sales and customer information. And can they handle the holiday crush? Managing order fulfillment is a crucial part of the e-commerce equation.
The e-commerce boom has created a business climate where outsourcing suppliers are the best way to get this job done. Providers are now specializing in designing and hosting Web sites as well as integrating the Web into supply chain management or catalogue systems.
Selecting a Single Source Approach
During the first phase, many companies opted for a piecemeal approach to enter the e-commerce fray. Now, some of these customers are recognizing that they are not enjoying any economies of scales that are the hallmark of an outsourcing agreement. Even more critical, they did not develop strategic relationships with their providers.
Christopher says the trend now is for old world companies to use just one provider to create a strategic outsourcing engagement. Customers have realized the value an outsourcing supplier can provide is not just consulting. She says an experienced provider can design the objectives of an e-business initiative before designing the Web architecture. This singular approach is one of the most reliable ways to create an e-business solution, in her opinion.
The analyst says the partnership aspect of the singular solution can be invaluable because the consultants are intimately familiar with all phases of the buyer's modus operandi. "They know your existing applications. They know all the components of your business," she points out. This detailed description can make it easier to manage the technical infrastructure required to support vigorous on-line commerce. "This type of knowledge helps you do an effective job of running your e-business," she adds.
In Europe there's another requirement. Companies eager to operate an e-business now have to design their architecture to accommodate the wireless craze, too. Christopher calls it "the mobile revolution."
In Europe and especially in Scandinavia Wireless Application Protocol (WAP) enabled cell phones are becoming ubiquitous. Service providers are continually investing in wireless applications.
The Power Of Wireless Technology
Currently there is a dearth of service offerings for wireless phones. But Christopher says the travel industry, stock brokerages and financial services firms are working on enhancements to a medium with two problems: a small patch of real estate for a monitor and a key pad that is hard to work with. She says the companies are perfecting voice recognition technology to remove the frustrations of the current key pad.
She predicts there will be a day when busy executives will be able to access key business applications through their cell phones or their Internet servers. "Every employee will be able to get better information when they are out and about," she says.
Lessons from the Outsourcing Journal:
- Today a business must have e-business abilities if it is to survive in the millennium's business world.
- Large companies are choosing one outsourcing provider to craft their e-business initiatives because they need a partner to develop strategies as well as Web sites. A strategic outsourcing partner is already familiar with your current business practices.
- Cell phones are another new economy frontier. With voice recognition, busy executives will be able to access their key applications from their cell phones.