Taking the Broad View of e-Business

As BroadVision marks its tenth year, we ask the company's Richard Hughes about where e-commerce has been and where it's headed

As BroadVision marks its tenth year, we ask the company's Richard Hughes about where e-commerce has been and where it's headed

Mesa, AZ — October 13, 2003 — BroadVision, the Redwood City, Calif.-based provider of enterprise portal and e-commerce applications, recently marked the ten-year anniversary of its founding, and Supply & Demand Chain Executive took advantage of this occasion to speak with Richard Hughes, senior director for product strategy at the provider, and to reflect on where e-commerce has been over the past decade and where it is heading in the years to come.

Originally focused on business-to-consumer (B2C) commerce, BroadVision has supplied solutions for some of the world's top retailers, including Wal-Mart, The Home Depot, Sears and Circuit City. But the company also has come to provide solutions for the business-to-business world (B2B), too, drawing such customers as Aviall, the world's largest independent distributor of new aviation parts, with annual revenue of approximately $1 billion, including some $62 million generated through online sales on a BroadVision-powered e-commerce site.

While he hasn't been with BroadVision since the very beginning, the U.K.-based Hughes has spent the past five-and-a-half years with the solution provider and was a BroadVision customer for about a year prior to that. We started our conversation by asking Hughes how attitudes toward B2B e-business have changed during his tenure with the company.

Hughes: When I started with BroadVision back in 1997 and 1998, e-business was new and interesting, and no one really had any idea what they were trying to achieve. Then, of course, we went the crazy years of 1999, 2000 and 2001, which shook things up. What we're beginning to see now, specifically around commerce, is that those companies that survived those years or that took their time in getting online are really seeing the benefits of it and are investing more in it. Companies are starting to invest in e-business again.

SDCE: How has the market for e-commerce solutions changed over that time?

Hughes: Customers now are a lot better educated about what they want. When I first joined BroadVision, we would ask people, "What do you want to do?" And they'd tell us: "I don't know. You're the expert. You tell me." Now, we don't get that anymore. We're finding that companies often already have experience building their sites and are interested in expanding their capabilities. They're saying that they have a clear idea of what they want.

So we've got a much better educated customer base, which is very positive because we have people who are not making crazy estimates about the amount of money they are going to put through this [online] channel. They've got realistic estimates about what they're going to do. People being realistic about the growth and use of the online channel and how it supports their business, rather than panicking and doing something quickly that never made business sense.

Obviously there's not so much money flying around and into the pockets of software companies, but in many ways it's a much more enjoyable environment to do business in because it's a great deal more sensible these days.

The irony is that back in 1999 and 2000, everybody wanted to be online in four weeks, whereas now that's far more realistic because there's been so much effort and investment that we've made in our product. It is much quicker to deploy it now.

SDCE: What has happened to the cost of an implementation in that time?

Hughes: It's stayed roughly the same, because if you tried to do a 1998 site with 2003 technology, it would be much, much cheaper. In 1998 and 1999, people were looking at just getting shopping cart and checkout technology in place. But as the Web has grown, people have tried to do more and more ambitious things and moving more processes online.

We're dealing with some fairly complex purchasing models today: the use of purchase orders, requests for quotes, pre-sales collaboration, standing orders, replenishment orders, a whole variety of different purchasing mechanisms that are pretty essential to B2B commerce. That's why I think a lot of the business commerce sites didn't take off until a little later that the retail sites, because they had more complex models that required more complex software to address it.

SDCE: What are you seeing as the current trend in how e-commerce applications are evolving on the B2B side?

Hughes: We're seeing more of the sales cycle and more of the overall cost of owning a product moving online. Before you saw a lot of people who maybe just looked up a product in a catalog and then went online purely to order it. Now you're seeing a lot more information offered before the sale. You see a lot more reviews, ratings and other offers in there. And now we're seeing people want to service the product online, so the post-sales support is there, too. Companies are putting online more of the operations that previously they would have done through a call center or through direct contact.

SDCE: What is BroadVision's vision for personalization in its solutions?

Hughes: We've always centered everything we've done around personalization. Over the years, we've thought, "Is this the right thing to be doing? Is personalization just becoming another tick in the box and a commodity?" And we don't believe it is.

What we're trying to do with personalization is different for different audiences. In a business commerce scenario, the personalization is really about making it easier for the supplier and the buyer to transact, making it easier and cheaper. One of the best ROI statistics I've ever seen was from back in 1998 or 1999, when one of our customers, by moving their ordering online, not only saved $15 million in printing costs for their catalog but also managed to save $50 per order for their customers. By reducing the amount of paperwork that their customers had to create, they were actually able to make it easier for their customers to buy from them. That's an example of how personalization — giving people the right information they need to make their purchase — cuts cost for supplier and buyer.

Personalization in business commerce is not really about the "cool offer of the week." As a business user, you don't buy the product on a whim, you buy it because your business needs it. Personalization in business commerce is about understanding the roles of the different people in the purchasing organization. The guy who's buying your product in a business transaction probably couldn't care less about your product. It's just his job to go and make the transaction. The guy that cares about it is not the one making the transaction, so you need to understand the "user-chooser" of the product and the transaction and accounting roles as well. Targeting the right information at the different people involved in that sort of transaction is a lot more sophisticated.

SDCE: What are the trends that you see coming down the pike in your space?

Hughes: What we have always said is that we're trying to move traffic away from fairly expensive and inconvenient people-to-people channels like call centers and stores, and move that traffic into the self-service channel. We're looking into the possibilities of configurable process management, putting more processes online. So, for example, once you've bought the product online, the ability to go and service it, find parts for it, make warranty claims on it and these sorts of things — some processes that can be reasonably ad hoc and company-specific, that need some configuration to the exact way that your company does them.

What people have tended to do in the past was to invest a whole load into custom code to do this, which can blow away the return because the investment is so high. Or they've realized the investment is so high that they just haven't done it. We're looking at ways to add configurable process management into the commerce and portal applications, to be able to deliver these sorts of processes in a self-service channel really quickly so people can change the processes, for instance, around returns without having to do a major software effort to do it.

There is still a huge potential for cost savings by pushing traffic away from expensive, people-intensive channels and onto the Web.

SDCE: What's the biggest challenge that BroadVision faces as a company now?

Hughes: I would say that customers are much sharper about what they want now. They're much more demanding in their requirements. People ask questions that they know matter, rather than questions that they think might matter, and they're very precise about what they want out of a piece of software. That's a good sign that the market is maturing, but of course it's a challenge as well. The challenge for us is to be able to respond to that, to be able to deliver the applications they want, and to show how BroadVision's solution is going to be able to give them the return that they want with a lower investment.

SDCE: Are your customers becoming more demanding in terms of the return that they want to see from your solutions?

Hughes: I think what they're looking for is more help in measuring the return, so we are seeing increased interest in some of our business consulting services around measuring how effective a commerce site is and how well that site is delivering a return on the investment that the customer has made in it. Measuring the return is always fairly difficult, because you need to be very clear about the total of your investment and operation costs, and you really need to measure the return quite carefully.

SDCE: And that contrasts with what you saw back during the Internet boom?

Hughes: In the past, people would make any kind of investment because they felt that the return was going to be huge. Now people have got a realistic idea of the return, and the amount of money that they're going to put into the investment is a factor of that. People are predicting 50 and 60 percent growth per year rather than 2,000 percent growth rates.

SDCE: So BroadVision is ten years old now. If we were to get together in ten years to mark the 20-year anniversary, do you think that the company is going to be selling the same types of products?

Hughes: If you look at all the technologies that people are selling, there is definitely a commoditization of certain applications. When we started, there was no such thing as a standard application service, so a lot of our engineering effort went into that. Now, as that has become commoditized and easily available from all sorts of people, we've been able to move up the stack and focus on higher-level applications, addressing the business problems directly rather than dealing with technical plumbing issues.

I hope that continues to happen — it's to our benefit that commoditization of the technology continues, because that allows us to move up, to give more power to business users, to cut the cost of deployment and reduce the IT cost of owning an e-commerce or portal site. I would expect that trend to continue over the next ten years, and [in the future] we'll be focused on higher-level applications that allow faster development, provide more control to business users and give better return on investment because people are going to be able to realize the full power of the self-service channel without having to make so much technical investment in doing so. We certainly intend to be here in 10 years time.