Virtual Orders, Virtual Problems
Through their VirtualOrder system, FedEx offers a value-added service to direct sales companies by providing software for merchants to use in building their product catalogs. These catalogs then reside on FedEx servers. When an order is placed through the service, FedEx assigns order confirmation numbers and transmits them to a FedEx Merchant Access Unit (MAU) located at the seller''s site. Once these orders are received, the seller picks and packs the order (if stock is sufficient) for delivery via FedEx. Inventory may be kept within the cataloger''s warehouse or sent out from a central FedEx warehouse in Memphis.
When FedEx decided to create their VirtualOrder system, they evaluated several commerce solutions from various software developers. FedEx soon found out that the software they''d need for VirtualOrder was simply not available through commercial products. Instead, they wrote their own custom solutions. Explains Susan Goeldner, FedEx manager of Internet Technology, "We looked at a bunch of those packages a long time ago and tried to make a go with one of them, but we have such a customized way of doing things that none of the vendors were flexible enough. We needed picky little ''FedEx-isms.''"
No one would dare to claim that e-commerce processing is simple. The
work required to successfully implement catalog, shopping cart, and payment
processing software is tremendous enough, but when you add the integration
work to change-resistant legacy systems, the task becomes almost insurmountable. The fact remains however that 70% of the world''s information sits on mainframes and minicomputers that weren''t built with the demands of
client-server technology in mind. The choices for dealing with them include:
- Grow your own solution.
- Scrap your systems in favor of more Web-friendly systems.
- Wait until tools and middleware mature sufficiently to ease the integration tasks.
Growing Your Own Solutions
Like FedEx, if custom integration is your only viable choice, be
prepared for extensive work from your information systems staff throughout
all of your systems -- inventory management, order entry, order processing, order fulfillment, accounts receivable, purchasing and accounts payable systems, and then some. No area of existing processing will remain untouched, especially if you''re planning to use your Web-based commerce site to create what Zona Research Inc. calls the "smooth ripple." Starting with an order placed via the Web, the smooth ripple triggers a series of events to occur -- committing inventory, preparing shipping records, ordering or re-ordering from
suppliers, manufacturing preparation for custom products, updating sales records, updating customer information systems, updating product databases, and a myriad of other mission-critical processing that retailers and manufacturing firms require.
Scrap Your Old Systems
The new model of electronic commerce mandates the running of a tight
ship -- or you risk losing business in droves. If your existing back-office
processing is already a thorn in your side, you might take a lesson from
Recreational Equipment Inc. (REI). Their doctrine "Extreme sports call for
extreme measures" led them to rewrite several of their mission-critical
systems for the Web. Their online catalog and store went live in late-1997
at a cost of around $1 million, for both hardware and software. "We had to start over from scratch -- batch-oriented was not acceptable because of the
international business we are doing on-line, which is around the clock" claims Rod McLeod, vice-president of REI Information Systems.
In considering the rewrite of your applications, you might also
consider taking a hard and close look at your operational processing
overall. It might be a good time to commission a process reengineering project to help refine workflow and break out of the old mold of "that''s how things have always been done around here."
You may begin to find that the newest systems, like those from SAP and
Baan, make good sense for you. Since they''re already rooted in
object-oriented technology under client-server architectures, they fit
naturally into a Web-extended sales channel.
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