This article deals with some old familiar basics but with the e-commerce, Internet, and information systems theme. Why? Because all the "dot commery" is really confusing some people… and confusion leads to inaction… and inaction is going to hurt some companies… badly. In fact, it already has.

By the time you finish reading this, you will know what to look for in a new kind of information partner--one who will help you use these new technologies and keep up with the rate of change occurring in most supply chains.

What's Happening?

No one can say that not getting involved with e-commerce, and the computer capabilities it enables, will put you out of business in a year. But it can be said that if your competitor (a newcomer or rejuvenated old timer) uses these technologies, he or she will be a lot more profitable (see companies mentioned below). Two or three years down the road, they will be in a position to buy you at a distressed value or let you limp along at low profit with so little market share that you just won't matter any more.

You are not going to be put out of business because competitive products can be purchased through some internet shopping mall. Instead, bad things will happen because of your competitor's ability to use the Internet to order, check stock and even bid on the products that you buy as well as sell. They will reduce costs by paying bills, supporting customers and sales staff, over the Internet. And in fact, they will prospect for new customers with the Internet. Your competitor will be able to spot buying trends and respond more quickly so they will not buy or build stock that is soon to be obsolete. They will be able to source, stock or build new products that will approach new lucrative high-margin markets. Finally, they will be able to attract the best product lines or the best distribution channel because they are, or will be, the kind of partner that the best companies want to deal with.

Is it really happening? I can only tell you this: The IBM Global Supply Chain Executive Management Conference held in March 2000 was attended by about 1,500 executives, not "techies." That is up 600 from 1999. They didn't even have a conference in 1998 because there wasn't enough interest. Things are happening and they are happening fast. The functions identified below are Internet-enabled. It took EDI 20 years to get less than 5% company participation. The Internet version of the same activities happened in less than 20 months! And it's a lot more than 5%.

At the IBM conference, I surveyed the 240 or so people who attended my session. Of those, 94% had Internet access now. In addition, 75% said that management (mostly the execs that were in the room) was pushing for e-commerce activities now. But how serious are they? When it comes to a pretty sophisticated thing, like online inventory inquiry, 35% said they either had it now or would be offering it within 12 months. Within 24 months, about 58% will offer it. What about electronic ordering? Already, 47% of the group said they do it now and within 12 months that will grow to 68%.

Is it any good? OrthoLogic, a $77 million manufacturing company which took three months to install an ERP system, increased on time delivery from 70% to 90% and cut manufacturing cycles from 22 hours to five. They did this while increasing inventory turns from two to six times a year. What about distributors? CH Briggs of Reading PA, selling hardware for cabinetry, tells how they increased from $24 to $40 million in about three years and actually has two less people. They also expect that over $1 million of additional sales will come from Internet-based electronic ordering.

What's It Really About?

So, back to the basics. You are going to have to commit to this technology leap and you must figure out how. Basically, it is and always has been about finding the right people. Another basic is that you always have to start where you are and move forward one step at a time. The basics are still valid. The real problem is finding the right people to shorten the time it takes to formulate and deploy new ideas and new ways of conducting business. The people you need must be able to show you how to use the information that e-commerce enabled computer systems provide. Plain and simple, e-commerce is all about the speed of electronic communication and the value of information. It is less about getting new computer systems than it is about getting more information into and out of whatever you have. It is about continuous improvement and that may lead to a new computer system but you can't afford to wait and there is a lot that you can do now. The great thing about these technologies is that you can improve things now.

What Do You Need?

Basically, you need a technology provider/ teacher/ partner who, frankly, can make you or break you. Although you may add some skills to your staff, you will find that you need outside help too. You need to find the people (company - ies) who can help you. Basically, you say to a prospective partner, "Your company says it can help companies like mine. Tell me what you can do." But everyone has the same concerns:

Again, it's basics. It is not how well someone can explain the Internet, data mining, or the differences between EDI X.12 and HTML or XML documents. It is how well they can explain ways to use this new stuff to:

There is nothing new about these three business basics. So the person representing the company that is going to be your information partner better be able to tell you what they can do to address these three areas in profitability terms that you can understand.

Your New Partner

To get started, you need to talk to a technology provider who will define a solution, design it to fit into your business, develop the necessary business and human interfaces and deploy the new information-based capability throughout your company. They better be able to integrate into your entire supply chain. They will have to integrate information from a variety of sources and digest it just for you and your needs.

The new partner must start with an understanding of the dynamics found in your supply chain. They must explain how you can reduce your overhead, increase your margin, and attract and hold customers by using e-commerce-based information systems, including internet ordering, data mining, electronic payment, routing and scheduling, etc. In order to do this, you're going to have to invest your cash assets, but more importantly, your management time assets. So selecting a partner that will not waste time or money but rather leverage both with their knowledge, will be critical.

How do you know if this new partner really knows this stuff? Again, it is pretty basic. Look at the management of the company. Do they only know technology? Or do they have the business knowledge that only comes from business experience. Do they understand the implications of the new way of conducting business from the manufacturer to the distributor -- and to the supplier and the customer?

Where the Rubber Meets the Road

But that experience is not enough. Even if they are eminently qualified, they need to explain the method they use to translate what they (their company) know about using technology into what you know about your business.

Getting back to basics, they should know a lot about your industry but not the details of your business. They need to show a method to teach you how better information and communications can improve your business. They must be able to show you where improvements can be made.

The most successful implementations like C.A. Briggs and OrthoLogic, used a team within the company. You will want to do the same thing. You'll need people to address executive issues, operating issues and technical issues. You will also want to make sure that your information partner has the same kind of people on its team that will work with you.

Will the magic they are showing you really work? It's pretty basic… just say, "Show me. I want to see what they are selling actually at work, not in a lab and not a simulation on their laptop. I want to see it at a customer's site or running on my system. If it is supposed to pass files, I want to see them passed. If they are going to collect and then digest information, I want to see a report. I want to see the one that is the one that I will get; not a mock-up or a similar type."

What do you do when you want a feature and they say, "Oh yes, that feature will be out in the next release," or "It will be ready by the time you install." If the feature is the main reason to buy what they are selling, then wait. That response can be legitimate and in fact, you want to know that the company is developing new capabilities, but they should have a full-featured, robust core on which to expand. Whatever the feature, remember that the question is how will it reduce costs, increase margins and attract or hold customers?

Next, you need to know what it will it take to modify your system. What does your information partner provide to make startup fast and easy? What about training? Remember, this is more about using information than it is learning what button to push. The training is to enable executives and managers to use the system to buy smarter and sell smarter. Operations people need to learn how the new highly available information can be used to drive down costs by simplifying processes. Rethink the basics.

Finally, and perhaps most basically, expect cost. But, rather than looking for the least cost, look for the most cost-effective solution for the greatest return within your company. How much should you pay for the value that the new capabilities and new information provide? Your information partner should be able to show you the cost of not using the information, not eliminating steps in the processes and not eliminating delays and errors. Then, you could base what you would invest on what you would earn or save. This is not a simple ROI formula. This business analysis may uncover a new way of thinking about your business. It can lead to repositioning the company, its products, and its services.

You may find a partner who has business analysis software or you may find that your existing management software can report specific activities to help in this effort. In any event, be aware that there is business analysis software that you and your partner can use to identify activities that the new capabilities could eliminate. The point of the exercise is to find the gemstones that information can polish into real jewels.