Web Commerce Partners

It seems the path to instant millions these days is to put a ".com" suffix on your company name and find an underwriter to take you public. Internet companies that employ maybe dozens and make no profit suddenly find themselves with million or even billion dollar market valuations.

This is a nutty situation that is heading for a precipitous fall. These Internet companies are not worth that kind of money. Note: A newspaper recently reported that much of Yahoo’s income in the last quarter was derived from interest it earned from the run-up in its stock price.

All the incomprehensible stock market activity notwithstanding, the growth of Web-based business is destined to proceed quickly. As I noted in my last column (March 10, 1999), the eventual public availability of affordable broadband network access will unleash a new wave of Web commerce applications.

But how quickly? Recent data from International Data Corp. (IDC) is revealing. According to IDC, global spending on Web commerce site development will grow from $12 billion this year to nearly $44 billion in 2002. That’s huge growth.

Because of the specialized nature of Web commerce site development, much of those billions will flow to various service firms, offering everything from site-development services to operations and maintenance. Because Web commerce systems will eventually tie into just about every business-critical system in a company, IT management will be brought into the middle of this scramble for the billions.

There is one thing you can bet on: A lot of fly-by-night service companies are going to be springing up. Do you have a plan or strategy to hook up with a reputable one?

I posed this question to some consultants that I trust. They listed some criteria that should be on your list of requirements as you hunt for a Web commerce development partner. A lot of what they said is common sense, but you’d be surprised at how fast common sense evaporates when exposed to the heat of a fast-talking sales person.

Demand a plausible ROI strategy. Untold billions have been spent on various ERP implementations with questionable returns on investment. That’s because much of the ERP outlays were made with an ROI assumption. Web commerce site development plans should include a specific return on investment. Ask a potential partner for proof of these returns from previous jobs.

Does a potential partner think local, but act global? No matter what business your company is in, the Web enables globalization of sales and marketing. If your company’s intention is to remain locally focused for now, your partner should demonstrate an ability to build your site to accommodate both nationwide and international business. Going global means being able to build in different currency-handling capabilities as well as acknowledging global trading rules and customs. If a potential partner doesn’t have this experience, you don’t want them learning on your dime.

Do they provide womb-to-tomb or point solutions? In a rapidly developing market, you’ll find many service companies that claim to offer end-to-end solutions. In reality they offer point solutions augmented by the point solutions of various partners. It’s similar to a general contractor who builds an addition with the aid of subcontractors. You need a long-term partner that that can provide all elements of an end-to-end Web commerce solution. Think of your own experiences with data systems integrators in the past, and you’ll quickly agree with the need to avoid point solutions providers in favor of a partner that can do it all.

Some people argue that it is critical for a Web development partner to have a detailed understanding of your business. If this were true, service companies would be lined up along vertical market lines.

They’re not. The core competencies of Web commerce development transcend the nuances of most vertical businesses. While it is difficult to find very experienced partners in a nascent business, some past performance can help you determine what the partner can do for you. --Bill Laberis is president of Bill Laberis Associates Inc. (Holliston, Mass.) and former editor-in-chief of Computerworld. Contact him at bill@laberis.com.