Outsourcing Leaves E-Commerce to the Experts

The increasingly complex nature of e-business, fueled by security concerns and the advent of the Internet as an avenue of trade, has placed greater demands on thinning IT departments. As a result, many vendors in the midrange market have devised e-commerce outsourcing programs for companies that do not have the experience or the resources to implement their own e-business solutions.

Outsourcing alleviates an IT staff’s burden of learning new technology in a rapidly changing market, according to Ron Rosenthal, head of corporate marketing and communications for Harbinger Corp. (Atlanta). For a lot of companies, using a third-party vendor as their network operator can turn the Internet into the equivalent of a VAN. "This is better than adding e-commerce responsibilities atop of IT’s existing infrastructure," he says.

Use of the Internet as a way of exchanging transactions also increases security risks, which create additional layers of responsibility. "Companies need to focus on their business strengths," adds John Wernke, Harbinger’s VP of enterprise product marketing.

"The Internet is still viewed as an unsecured environment in which to move transactions," says Martin Hensley, president of Omaha, Neb.-based ECom Inc., a developer of proprietary EDI services. "Once users begin to feel the Internet is reliable, it will become a viable transaction protocol."

Since e-commerce service providers specialize in that particular market and focus on the applicable technology, they offer a product that is seamless to the eventual end user. "One of the strengths of our business is we connect our customers to anything," Hensley says. "We have completely diverse communications capabilities."

Recently the beneficiary of strong financial backing, ECom has reached a point of financial stability that enables it to increase personnel and handle larger quantities of business, explains Hensley. The increased support also enables ECom to launch outsourcing service via the Internet, in addition the company’s FTP, VAN and VPN protocol services. Pricing for services consists of a membership fee for the Internet service, which provides ECom’s clients access to e-forms that can be sent to their business partners. ECom provides the Web server and translator needed to transfer the information.

When confidence in the Internet’s security grows, the cost structure of doing business via the Internet is likely to change, Hensley adds. "ISPs will start charging Internet fees once the Internet is on a level playing field with other transfer protocols."

Harbinger’s own Trading Partner Certification (TPC) services are designed to manage the entire process of trading partner installation, testing and certification. TPC analysts are trained to develop program goals and objectives for Harbinger clients, establish an actual certification process, develop data validation criteria and establish rules for assimilating trading partners.

Other e-commerce service vendors relevant to the AS/400 market include Sterling Commerce Inc. (Columbus, Ohio) and Extol Inc. (Franklin Lakes, N.J.).

Sterling Commerce ramped up its e-commerce outsourcing efforts on a global scale in June with the acquisition of the Surrey, England-based Electronic Data Exchange Service Ltd. (EDES). Sterling will now provide EDES customers with a range of e-commerce solutions on a local, regional and global basis, according to Warner Blow, Sterling’s president and CEO.

For the past year, Extol has offered its Expert EDI solution, which provides the features of a fully-staffed EDI department and includes VAN connectivity, communications and mapping. Expert EDI also controls the data, information flow and staff that manage transactions, enabling companies to save money by not having to employ EDI technicians.

The different e-commerce outsourcing programs exist because the market for such services seems to be growing and because different companies have different outsourcing needs, according to Harbinger’s Rosenthal. No offering will fit the needs of the entire market and flexibility is important, particularly because some customers may "already have some thoughts as to what they’d like to accomplish," he says.