InformationWeek

June 28, 1999

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The Next Level For Emerging Enterprises

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Since January, WestCon has been using the Web to sell to resellers and provide them with product training, as well as conduct many of its transactions with manufacturers. The company says it's using the Internet to resist disintermediation and increase its value as a distributor to both manufacturers and resellers. "As a distributor, we have to add value, and the way we do that is by really knowing our products and helping both the resellers and manufacturers understand and serve the market better," says MIS director Bob Barnes. For example, WestCon provides extensive marketing data on where products end up and how they're used to the group of manufacturers it works with, Barnes says.

Tom Beuhrer, president of E-Valuation Research, says smaller companies are more likely to get pulled into a supply-chain relationship by their bigger partners, but the reverse seems to be true at WestCon: It's working on a shopping-cart system that would let manufacturers pass on customer orders for fulfillment, says Gino Cotignola, WestCon's manager of development services. "That way, a customer could visit a manufacturer's Web site [to place an order], but we'd still be involved in the transaction," he says.

WestCon looked around for packaged E-commerce solutions, but it wanted a system that could interface with the ERP system from J.D. Edwards & Co. that forms the backbone of its IT infrastructure. Finally, the company decided to use an outside firm to develop a custom solution, and then brought that system in-house where the IT staff continues to modify it and integrate it with existing systems. The E-commerce system is based on Microsoft's Active Server Pages.

With an IT group of about 35 people, however, WestCon has limited resources to devote to E-commerce. Cotignola admits that it's time-consuming to keep up with everything that arises. "But we do it, because this segment is always evolving," he says. For instance, a new browser might come along that could force WestCon to redesign its site.

While the company can't put a price tag on its E-business efforts so far, Barnes says that businesses have to budget for the long haul. "You can get something up fairly cheaply," Barnes says. "The real commitment comes later, when you're responding to changing needs and trying to enhance your site to show you take E-commerce seriously."

To help it successfully meet new challenges, WestCon says it's looking into Web-ready versions of J.D. Edwards' ERP modules. "This might provide an easy way to migrate from our current solution to one that's more robust and well-integrated," Barnes says.

Recognizing that the first version of an E-business site is just the beginning and that there will be constant pressure to refresh it is a big challenge for midsize companies, agrees Perry Thorndike, VP of business development at BroadVision. While midsize companies often have an advantage over larger rivals in being more nimble, maintaining this advantage on the Web depends on designing and managing a site in such a way that it can be quickly extended and enhanced.

Move Quickly
Powell's Books in Portland, Ore., learned that lesson. The nine-store chain, with 325 employees and $35 million in revenue, beat Amazon.com to the electronic frontier. The company was selling products via E-mail in 1993 and jumped to the Web in 1995. Online sales now account for 10% of the company's revenue, and the number's growing says Frank Walsh, Powell's business technology manager.

To maintain growth, the book seller has retooled its site a couple of times, relying on a local ISP for the job. "We're always trying, in part, to become more integrated with the systems that provide the backbone for the retail operations," says Walsh. "It's very much a learn-as-you-go process, not just for us but for many businesses."

The need to continually upgrade a Web site to better support E-commerce activities is certainly on the minds of the people at Franklin Covey. "We have a list of things we want to add that's already way too long," says VP Smith. "But as soon as we see that the infrastructure is sound, we're going to plunge in with many new features." That's E-commerce today, particularly for emerging enterprises: ambition, excitement--and a little trepidation about how it's all going to play out.