Relationships Can Flourish by Going Online
Wakefied stressed that it is the overall business strategy more than a specific technical solution that allows e-commerce to streamline business, cut costs, accelerate turnaround and expand markets. "I'm not saying distributors have to invest millions," he continued, "but they shouldn't build a house without a foundation. E-business is more like the bricks and mortar, or the fixtures, rather than the foundation."
So just how much should companies expect to invest in e-commerce? Wakefield responded that cost is determined by many factors, such as the size of the company and the customer base, the number and complexity of transactions, types of services offered on an e-commerce site and the internal integration necessary.
"For a mid-sized distributor, the price could range from $10,000 to more than $100,000 including software, setup, training, implementation and integration services. I know of large manufacturers whose systems range from a couple hundred thousand to more than $2 million," he said.
He added that additional costs may be required for hosting, maintenance and support, transaction or other fee-based costs, credit-card processing and data extraction fees.
Wakefield advised companies to make sure the e-commerce solution is an integral part of the business, enabling customers and their data to be securely locked in. "E-commerce is meant to increase cost savings. If the e-commerce provider ceases operations, distributors don't want their profits jeopardized," he said.
While e-commerce can offer major benefits, implementing it involves a great deal of teaching and some major adjustments for everyone. Cutler warned that people will be resistant, adding that it's important to logically anticipate this reaction and figure out how to get past it. "Make sure the new system doesn't take the company from inefficiency to harried and crazy," he cautioned.
A well-executed rollout takes an average of 90 to 180 days. "It's very similar to a political campaign," Cutler explained, "with methodically planned-out periods of enthusiastic communication to circumvent ill will. Regularly communicating progress such as workflow improvements and increased profits promotes positive attitudes."