When President Tom Sincharge spent some real time with the three proposals to move Yesterday Corp. into e-commerce, he found that each addressed the companys needs from a different perspective.
All three warned against simply throwing money at technology for technologys sake and recommended that any solution must be able to grow as the company grows.
But thats where the similarities ended. Heres how Sincharge categorized the differences.
One piece at a time
Arif Cubukcu, president of Beachwood-based Innovative Organization Systems Ltd. (IOS), suggests that Yesterday Corp. design a sophisticated system one piece at a time, eventually tying them all together.
That would include a first phase investment in hardware, such as the main and back-up serversto run all computer operations and handle the Web site. That would coincide with development of a Local Area Network so Yesterdays employees could share data and software, and installation of a dedicated Internet connection to support the company Web site and carry EDI (electronic data interchange) transactions.
After that, Yesterday could add operational and e-commerce softwareCubukcu cites specific off-the-shelf products that handle general business functions, such as Gentran, Maccola, Solomon, UA Accounting and Microsoft Back Officewhich would be shared through the network.
You want to be able to enter data once and make it available to anybody who needs it, explains Cubukcu. The last thing you should do is duplicate your efforts.
A main concern with this approach, warns Cubukcu, is that when you begin writing code to tie software together, you increase the chance of problems. I believe in buying components that are already designed, he says. But its a big puzzle and you have to find a way to put everything together.
Based on data provided to Cubukcu about Yesterday Corp., he believes it would also have to invest in about 20 PCs for its three locations16 for the main offices and two each for the manufacturing facilities. Eventually, each of its 10 inside salespeople would need a laptop computer, too.
The main component of the approach Cubukcu recommends is a comprehensive Web site that would:
- provide customers and prospects with information about Yesterday Corp. products;
- accept orders;
- accept payment or generate an invoice for established clients such as Grande (see previous article: The Ultimatum).
Eventually, Cubukcu says, the entire operation could be integrated, so a new order on the Web site generates a shipping label in the warehouse, an entry in the inventory system, a receivable in the main office and a detailed report to the sales team. But he considers those to be second phase.
The first phasebasic hardware, software and setting up the Web sitewould cost $125,000 to $175,000, based on Cubukcus estimates.
Putting the catalog online is something that can be done immediately, he says. But you haveto leave it open in its design so that you can expand it to become part of an accounting or inventory system later.
To demonstrate the capabilities that Yesterday Corp. would have, Cubukcus team at IOS Ltd. designed a model Web site, which you can find at yesterdaycorp.cyberorg.com.
The turnkey solution
Mark Geyman, director of marketing for NetForce Development, in Woodmere Village on Clevelands East Side, prefers to reduce the risk that comes with tying together varied computer applications. To do that, he recommends installation of a turnkey system that satisfies Yesterday Corp.s short-term needs and long-range goals.
After a series of meetings with key management to determine exactly what those needs and goals are, the first decision is whether to use a PC-based (Windows) network server or a substantially more costly Unix-based platform, says NetForce President Lauren Patrick.
Patrick suspects a Unix-based server is probably more powerful than what Yesterday needs.
A second issue in the turnkey approach is whether to write custom softwaremore costly than off-the-shelf products, Geyman says. He figures Yesterday would be best served in its Internet needs with a product from Microsoft or Netscapeboth affordable and capable of being customized to a degree.
Next, the company would need to establish a LAN for each of its locations and connect the LANs with a virtual private networkan Internet-based means of connecting remote locations. Patrick would recommend using a national Internet Service Provider such as UUNet or Digex rather than a local provider for the simple reason that sales people or executives who are traveling will find it easier to connect with the office.
However, with all of its operations anchored in Northeast Ohio, there are local providers that could do the job.
Because of Yesterday Corp.s four-month deadline, the heart of the turnkey approach would focus on the infrastructure first, then make EDI and e-commerce the top priorities.
After that, the other applications can be phased in, with the companys existing database being converted to fit those packages.
The best option would be to start with accounting and inventory now, then bring in sales in six months, says Patrick That type of phased-in approach would allow Yesterday to grow.
Such a solution would cost between $125,000 and $200,000.
One project and one goal at a time
Its difficult to anticipate changes or problems that might pop up in the future, says Joseph LaMantia, vice president of DeCarlo, Paternite & Associates Inc. in Independence. Thats why he favors tackling the challenge as a series of small projects.
LaMantia says a quick evaluation of Yesterdays situation showed the company was in dire need of information system planning, hardware infrastructure, networking, data communication, business systems software (e.g., ERP), EDI, e-commerce and technology integration.
When we came in and looked at them, we saw they didnt have a strong MIS staff. No one understood technology, no one understood how to leverage technology for a solution, there was no consistent IS budget and no strategic plan, he says. The company was reactive, not proactive and considered Information Services a less important area in the company.
Yesterdays executive management, he continues, had no understanding between EDI and e-commerce.
In a typical project-by-project approach, the company starts with an extensive self-analysis (with help from consultants) to determine short- and long-term needsnot just what a CEO or board of directors thinks the company needs. Thats a two- to-four week process, followed by joint development sessions between consultants and management to write a long-range plan, or Information Systems Strategy Plan (ISSP).
According to DPAI Senior Consultant Brett Rabung, the resulting document contains many smaller projects over a period of one to three years. In a case like Yesterdays, those individual projects eventually add up to satisfy a companys larger goals.
Explains Maher Atwah, DPAIs technical manager, As an entire project, its too hard, but once you break it down project by project and goal by goal, its easy to accomplish.
This approach also calls for a Web site, which becomes the center of all communications. DPAI general manager Don Snyder says that probably means starting with a basic Web site that advertises Yesterdays products, tells a bit about the company and allows customers to place and pay for orders. Over time, a private portion o f the site could be developed for use by only those with access codes, to share private and timely information between locations, with traveling employees, and with customers and the external sales force.
Operations could be tied together gradually by implementing a phased modular ERP system, starting with a manufacturing module, says LaMantia. While this could result in a very expensive solution, it allows a company to add other modulessuch as accounting and sales packagesas it can afford to make that type of investment.
An immediate goal, explains LaMantia, is to integrate EDI capabilities into current infrastructure. In Yesterdays case, that allows the company to retain Grande as a customer. Such a project includes training Yesterdays work force about the differences between EDI and e-commerce.
The final part of a phased-in approach is to plot the next stage of technology integration, and consider any changes in the way a company may do business to satisfy its customers technological needs.
Such an approach, according to LaMantias estimate, would cost between $50,000 and $125,000 for the first stageEDI and e-commerceplus another $10,000 to $20,000 for development of a comprehensive Information Systems Strategic Plan.
The board decides
After Sincharge finished his presentation, two board members suggested Yesterday scrap the entire project and take its chances by losing Grande as a customer. Another demanded Yesterday choose the least expensive plan and build a skeleton system that only satisfied Grande.
There was agreement all around that Sincharges original plan was simply too large and expensive to implement all at once. We looked at the hard figures and realized that we couldnt just jump headfirst into this, Sincharge says. It wasnt cost effective.
Instead, the board decided the company needed to analyze its complete needs, develop an ISSP and move forward with the project in stages, beginning with Grandes EDI demands and installing a new network system and Web site. After that, says Sincharge, Yesterday would integrate software with greater interconnectability and develop an intranet.
We really wanted an efficient long-term solution, even if it cost more money up front. We didnt want to put all our efforts into a short-term solution only to find that we had to start from scratch the next time we had a new idea, he explains. We figured if we did it this way, as we grew wed save money on the back end as we started to see a return on our investment. Bottom line, we went with a plan we could swallow.
The company also called a recruiting firm to help hire an MIS director to oversee the companys network needs.
In early January, Yesterday took its EDI capabilities live, satisfying Grande and keeping it as a customer.
EDI vs. e-commerce
EDI is a method of ordering and payment through dedicated software programs specific to each customer. It is the favored means of exchanging money among large corporations, because it is secure and the ultimate in customer focused: Its customized to fit each companys own operating needs.
E-commerce, on the other hand, provides a one-stop electronic commercial outlet for multiple customers who log on and conduct business through a Web site. While security is no longer an issue, perception of security remains a barrier for some. While e-commerce aims for convenience to customers, its a one-size-fits-all solution designed by the seller rather than the buyer.
- Don't get overwhelmed; it starts with a phone call.
- Prepare to make an investment. It costs money, but returns are easy to come by.
- Staff up. You'll need to hire a dedicated in-house information systems specialist or pay an outside firm for ongoing help. Don't try sneak responsibility for information systems into the job description of an employee in another department.
- Plan for the long-term before buying for the short-term.
- Consider what technology might be used for:
- Exchange of money
- Customer service
- Inventory control
- Data collection and analysis
- Increased internal communication
- Joint venturing
- Sales and marketing
- Training and staff development
- Prioritize needs and address them in order.
- Let the business needs drive technology decisions-not the other way around.