What We've Got Here Is Failure to Manage Content
With such a webucopia of information to be wrangled about, it's obvious that getting and keeping a grasp on all this content is paramount if you're going to succeed with your B2B efforts. As Pierre Mitchell of AMR Research wrote in the white paper "The Report on E-Commerce Applications," "For buyers, the single largest reason for delays in e-procurement projects still continues to be catalog content management. Buyers such as retailers, distributors, manufacturers and trading exchanges demand suppliers offer not just tailored sell side functionality, but also the ability to publish on-demand content in various formats a challenge for even the most sophisticated suppliers." Anthony Tarantino of answerthink, an e-commerce consulting firm, says that if people can't find it, they can't buy it. And Pamela Dunn, product marketing manager with BroadVision, puts it this way: "You want to make content so simple that [users] don't go outside the process."
Ensuring that buyers find and buy with the appropriate e-procurement tools that are available hinges on the existence of everything from pleasing site layouts (no "angry fruit salads," as bad sites are sometimes called) to search engines that produce, rather than frustrate. When a user logs on to a B2B site, he'd better be able to find what he needs, and quickly, or he'll grab a catalog and start maverick spending, at an estimated premium of 10 to 25 percent more than items on long-term agreements, according to Tarantino.
Should I Make Or Should I Buy?
There are two different approaches to dealing with content management. One is the "make" approach, in which a company sets up and maintains its own e-procurement system. The second approach is the "buy" option, where an outside solutions provider establishes a system for your company. Both have their pros and cons, and deciding which system to implement takes some forethought and analysis. Herewith, some forethought and analysis.
While there is a segment of the B2B world that is well-served by a "make" system, it is a small one. From the buy side, Tarantino says make systems work best for very small catalogs, in environments with low maintenance requirements. On the sell side, he says, "If you have a handful of items from a few suppliers, it may make sense" to make your system. Companies using this approach include Dell and Compaq. Tarantino points out possible snags include the fact that buyers may have many suppliers, making it difficult for a buyer to choose the best company out of the pool; the lack of a consistent look or feel and the inability to search and compare across suppliers. Mitchell anticipates help is on the electronic horizon in this last area. "You're going to see some standard around classifying and cross-referencing. There's a broad effort called the ecology of collaboration, where an attempt is being made to define that type of standard. Right now, you can't search across catalogs; the tools around that will improve."
Terry Welty, vice president of marketing for TPN Register, a hosted service company that supplies complete turnkey applications for e-procurement systems, says the traditional approach of a supplier publishing a paper catalog to its customer base is becoming less of an option in the B2B environment because of the permutations of "the dozens and eventually hundreds of customers who'll be buying online." Added to that, he says, are the subsets of master catalogs and different price points. Handling such a hydra can lead to increased complexity, and ease of use is one of the main advantages of launching an e-procurement system in the first place.
BroadVision's Dunn says, "Today it takes from one to two weeks from the time you make your purchase request [for it to be filled], and you can cut that down to one to two days." This economy of time is a big selling point in e-procurement systems; if that benefit is smothered in user frustration, you've wasted your company's precious time and money. Let frustration reach a critical mass, and you'll be fighting the dual fires of maverick buying and errors due to data re-entry.
However, some companies are choosing the make approach. David Robb, vice president of sales and marketing at 58K.com, an auction site for the 58,000 printers in the United States (hence the name '58K"), gives his company's reasons for keeping it down home when it comes to content management. "First, we think our technology team we assembled is as good as anybody's out there because we had access to them and they have a stake in the company. If you outsource things you lose a lot of control. If something breaks, who's going to fix it? We can react much more quickly than if we outsource. At our site we make hundreds of small changes every week. That's very cumbersome to do if you're outsourcing your technology. We can see what our users like or don't like, and we can make these changes ourselves."
Sean Heenan, e-commerce manager at Olympic Steel, a major supplier of flat rolled steel, says his company takes a hybrid approach to content management in order to ensure that ERP needs are met. "We're doing a lot inhouse, but not everything. We are sending some stuff out to be done, but the meat and potatoes of everything you do is all dependent upon your ERP. You can have these neat Web sites, but if they don't map directly back to your ERP, you're really not getting any functionality out of it. You can pay all these millions of dollars for these really high-tech Web applications and software, but if it doesn't work into your back-end system, it doesn't do you any good. Where we have our talents, I'm utilizing the people I already have. But where I don't have the talent, or where I don't have the time, I'm going out to the specialist and asking them to help me out."
Portals and Aggregators
Beyond the Dell/Compaq approach are two other incarnations of the make system the vertical industry portal or aggregator, in which the content is handled by a portal with industry-specific knowledge (such as eSteel and Tradex); and the horizontal market/process suppliers, in which content is handled by a horizontal or process portal or aggregator with industry-specific knowledge (such as W.W. Grainger or Staples).
These approaches are good fits for spot buys or sourcing items unique to the aggregator, but there could be problems with the narrowness of the market, conflicting software and price points. According to Tarantino, spot buys can be anything from a trainer for a new software system to a prototype for a new product: "Even if you do buy another version of that prototype, it will be something different. It's a classic spot buy, but once you finalize it, it becomes a catalogable item."
The other approach to the content management issue is the "buy" model in which an organization outsources content management, although sometimes in varying degrees, as we shall see. And while the "make" side had only a few subcategories, there are a few more incarnations in this approach.
Static Content Providers
The first type of "buy" model is the use of a static content provider. Intermat, the materials-cataloging company (recently bought out by MRO.com), is one such static provider. Tarantino explains that, in this version, content is provided on an as-needed basis, and the company buying the system bears the personnel and infrastructure costs. This approach requires a large IT base in order to install and maintain data, and works best with low-volume catalogs that don't require frequent change. In a typical company's inventory, "You're looking at 20 to 30 percent of parts requiring maintenance," he says. If that's the case for your organization, chances are that a static system won't work.
The second type of buy system is a subscription service such as Requisite Technology or Harbinger. According to Tarantino, subscription services provide content on an annual subscription basis, and the company buying the subscription covers personnel and infrastructure costs (as with the static content provider). This type of installation fits the same criteria as the static content model, with the advantage that the annual subscription may cost less than the pay-as-you-go static content fees.
Hosted Service Providers
The third type of buy installation is the hosted service model, such as the one TPN Register provides. This is a complete installation, in which the hosted service provider handles every aspect of content management, from establishing the database to making the necessary changes as they arise. Advantages of this system include a standardized appearance, online content maintenance and regulation of price points for varied customers. Hosted service models are best suited to organizations with a myriad of suppliers and catalogs, and that value a uniform look and feel for their content.
Crunch the Numbers
Tarantino backs up the case for "buy" systems with some cold, hard numbers. After a study that took into account the installation and maintenance costs of the two approaches, answerthink found the average two-year cost per part for make systems was $29.94, while the buy systems averaged $7.74 a 387 percent difference. To paraphrase the old line about Congress, "A few hundred percentage points here and there, and pretty soon you're talking serious money." Produce savings like that in your company, and chances are your own personal stock will be upgraded to a "strong buy" rating.
Regardless of the type of system an organization implements, there are some common features that have to be present for a content management system to work. The first feature is a search engine with parametric, rather than hierarchical architecture. The difference between a hierarchical and a parametric search engine is the way in which they define items. Hierarchical systems can return faulty search results if an item's description is just a little off when the user types it in. Parametric search engines are more forgiving; they deal with the "human factor" more easily. Just as New Yorkers stand "on line" while the rest of the country stands "in line," and a "gum band" in Pittsburgh is a rubber band everywhere else, there is a wide variety of terms and their usage in the business world.
The example Tarantino uses is that of a garbage receptacle. Is it a waste basket? A wastepaper basket? A waste paper basket? What if the user is British and he needs a "dust bin?" (Or dustbin, for that matter?) English is a wonderfully malleable language, but this malleability can lead to a linguistic can of worms. Imagine turning off the translator earphones at the United Nations countless different words for the same thing, and every speaker convinced that he or she is correct. Parametric engines can handle these descriptive curve balls easily, since they don't depend on where an item is classified to produce accurate results.
Margin for Error
Tarantino goes on to state that this parametric engine should also include fuzzy logic and wild cards. Fuzzy logic deals more easily with imprecision, something computers usually don't handle very well. There's no room for fuzzy logic in number crunching, for example, because "almost right" is wrong three does not equal four. In a search engine, however, "printr" is almost printer, and fuzzy logic recognizes that fact. (Never underestimate users' ability to misspell.) Wild cards allow users to search for items that have certain characteristics in common. An industrial user who typed in ferro*, where the asterisk is a wild card, would be given all items that began with ferro (ferroalloy, ferromagnetic, etc.), regardless of the word ending. Just as most Web surfers have had the frustrating experience of using a search engine in an attempt to dredge up a particular site only to wind up with nothing to show for our efforts but a cramped mouse-clicking finger, users of e-procurement can find themselves unable to requisition the part they need, even if they know the part is in the catalog somewhere. Remember the maverick spending premium? Here's a more shocking statistic: Tarantino cites figures from the National Association of Purchasing Management that show when a user can't find the item she needs, even if it's in the catalog, she will fill out a special request for that item, which can result in as much as 50 to 90 percent more in processing costs.
Simply put, a parametric search engine, particularly one with fuzzy logic and wild cards, is able to handle errors in entry or lack of specificity. This is especially important when dealing with items such as industrial equipment, where a user might only type in individual attributes such as "sandpaper," or abbreviations such as "lbs." Remember: If they can't find it, they can't buy it.
But It's Not in Here!
Now that users can find what they need, due to your whizbang search engine, what else should your content management system do? Well, users need to be able to pop out, and not in an "I've got to get out of this cubicle" kind of way. No matter how thoroughly a catalog is prepared, or how well an inventory is stocked, there will be instances in which a user needs something the catalog isn't able to supply. Popping out is simply the ability to purchase items that are not in a catalog, or are out of stock. Tarantino says, "All the better solutions allow you to buy noncatalog items." The idea is to allow users to go outside the system without totally ditching the system. When they ditch, you pay. As in the special-order premium mentioned earlier.
After the search engine and punch-out capability, the next important feature is seamless integration. As Roger Murff, director of product management with Macromedia, puts it, "The B2B business is one of managing data between parties. You're moving content from one party to another party. I think the huge problem is, 'How do systems from one business integrate with other systems?''' Although Macromedia's main niche isn't B2B, there is a reason for the company to concern itself with B2B content. Murff says, "I think one of the reasons why Macromedia is interested in the content management space is that we have about one million customers, and a huge community of Dreamweaver and Flash users, and our customers are telling us that this [integration] is a problem. So it's an opportunity for Macromedia to help solve some of these problems."
Simply put, a content management system has to be intuitive enough that users are able to use it, contribute to it where necessary and embrace it as part of the software they must deal with on a daily basis. In addition, the system must dovetail with your existing software.
The General Services Administration is using BroadVision in their e-procurement efforts, where integration is a vital ability, as the GSA is the entity that is handling the four million SKUs and 100,000 buyers mentioned earlier. Those kinds of usage numbers can only be accomplished if employees are able to make a smooth shift into a system. According to Dunn, their installations "utilize a firm's employees' skills to contribute to content."
Dan Ryan, of IntraNet Solutions, another subscription service company, says the systems his company installs are also seamlessly integrated. "So, if you're putting up a new data sheet, somebody can submit that in whatever format they want, whether it's HTML or Word or Framemaker, and we'll convert it to the appropriate format. In a template links are automatically managed and will update to the site at the release time." Mitchell puts the need for this ability this way. "Once a company creates a catalog, they should make sure they have good workflow and are getting data updates.' Mitchell also points out that it in content management, it pays to be flexible particularly on the buy side of the equation. "I think that if you're a buyer, you will not be religious about any one type of content-hosting strategy. A buyer who does content management well uses all three types of supplier models."
Looking to the Horizon
What's in the future for content management? One of the most interesting developments, one that is actually already available, is wireless capability. Dunn points out that it's now possible for e-procurement professionals to manage their affairs when out of the office. "For instance, if you're an approver, and you're traveling and get stuck in an airport, you can log into your system, check your inbox and approve orders from there." So there is no waiting for the boss to electronically check off on an order. (See this month's "Net Best Thing" column for more on the wireless world.)
Mitchell believes that the content management systems of tomorrow will be even more adaptive in nature. "You're going to see better use of buyer profiling, so that when you punch out to a supplier site, they will have a standard mechanism of understanding who you are, what your role is in the organization and how the catalog should be customized for you. It's kind of like cookies, but it's more than that," he said. "As it is now, a buying organization has to go and redundantly do administration at different supplier sites so that those suppliers will be able to personalize the catalog for you in order for it to appear in a semi-consistent and contractually compliant format to you."
Murff is another believer in the customizing or tailoring of content. "One thing that you haven't seen a lot of is Web site analysis. You're not seeing that type of information being fed back into the information process. Wouldn't it be great if you could see some information on who looked at this page and how long they stayed?"
As with the rest of the Internet economy, Mitchell sees some wholesale changes ahead for content management. "You're going to continue to see content resellers be subsumed by B2B marketplaces. The reason is that reselling content for content's sake is not a very attractive business, with the advent of the Internet. Ultimately, the content will be published and subscribed more fluidly without needing an intermediary." As examples of this consolidation, Mitchell cites the recent purchase of Aspect by i2 and Partner buying a lot of content from HIS. "It's more profitable to use content to drive traffic to your marketplace and then make money off the commerce than to just resell the content itself."