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The explosion of e-business has opened a wide variety of new avenues for dealing more effectively with customers. Existing and emerging solutions cover the full spectrum from prospecting through after-sale customer service. Sell-side e-commerce opens up a new and innovative sales channel for many companies where customers make pur­chases and request delivery electronically. Manufactur­ers, wholesalers, retailers, and service organizations all make likely prospects for sell-side e-commerce.

Sell-side e-commerce is further subdivided into two sectors determined by type of customer—business-to-business (B2B) and business-to-consumer (B2C). Much caution must be exercised in positioning between these since they can differ dramatically. Some companies need one or the other, and some need both. Some software packages specialize in one or the other, and some spe­cialize in both. B2B buyers work in the customer's pur­chasing department, tend to be frequent repeat buyers, typically charge on a company account subject to credit limit, need hard product information instead of mar­keting material, and value transaction efficiency over presentation quality. B2C buyers tend to be periodic shoppers who purchase predominantly by credit card, are drawn to sites offering a "pleasant" shopping expe­rience through ease of use and presentation quality, and buy in much smaller quantities. The ability to attract new customers and build customer loyalty as a result of the shopping experience is a much higher priority in B2C than in B2B. B2C buyers expect more than just an online product catalog—"bonus" information (valuable advice, helpful hints, etc.) accessible on the storefront encourage repeat business. While B2C grabbed the e-commerce spotlight early, industry analysts predict that B2B will dwarf B2C in the coming years.

Companies selling products rather than services have greater challenges to face when implementing e-busi­ness, and manufacturers tend to face greater challenges than distributors. Most of the difficulty involves the need to integrate with a back-office enterprise resource planning (ERP) system that keeps track of inventories, production schedules, product movement, integrated financial record keeping, etc. While it's relatively easy to set up a simplistic electronic storefront, linking that selling mechanism with the rest of the company's core business applications can be extremely intricate and costly. While a simplistic message-based interface might be the fastest way to get to market, a true bi-directional integration mechanism is required for long-term effi­ciency and viability. Companies currently running an ERP system face a serious dilemma: having to choose between a stand-alone e-commerce package and new Web-enabled modules from their ERP vendor. The former tend to be far more robust from the sales per­spective, while the latter have the bulk of the integra­tion work already accomplished.

In addition to sell-side e-commerce, huge break­throughs have emerged in the customer relationship management (CRM) area, which includes sales force au­tomation (SFA), marketing automation, customer service, and customer support. Many application software pack­ages within this genre have overlapping functionalities, so due diligence in defining and prioritizing functional requirements for software selection is extremely impor­tant. Further complicating the software selection task in this area is the evolutionary nature of this software pack­age market. Vendor consolidation, vendor partnering, footprint expansion, and improved integrationware avail­ability have clouded the issue and will continue to do so for the foreseeable future. Of particular note is that while SFA and CRM packages emerged as separate entities, the trend is that these two are blending together. Since CRM has the broader scope, stand-alone SFA packages will not be much of a market factor going forward. At the upper end of the market, major ERP vendors are expanding their footprints into the CRM space either by internal devel­opment (SAP, Oracle) or through acquisition (Baan/Au-rum, PeopleSoft/Vantive).

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 12

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