2001: The Year of E-Commerce - Taking the Plunge

Managing a successful conversion to e-commerce has variously been portrayed as an emergency, pure mayhem or the inscrutable magic of ultra-technicians (as in kids, don't try this at home). Recently, however, the truth has begun leaking out. Implementing an e-business solution is essentially like managing any other big project, with the addition of some new risks and expanded opportunities.

Classic project management methodologies begin with defining the goal, and this is the starting point for successful e-business initiatives as well. The most successful e-business implementations are with customers who know what they want to achieve before they begin work, says Erik Bleyl, vice president of the Logistics Div. of Aether Systems, Richmond, Va. They've identified a problem or an opportunity and they want to take action.

In the case of e-business, however, recognizing those problems or opportunities can be tougher than it sounds. For starters, the solutions, like the problems, are sure to involve your customers or your suppliers, or both.

When you're considering an e-business solution, it's important to stay very focused on your customers, says Daniel Bentzinger, senior vice president, information technology for Transportation.com, a joint venture between Yellow Corp. and the venture capital firms TL Ventures and EnerTech Capital Partners. Headquartered in Kansas, Transportation.com offers a suite of Internet-based transportation management and logistics services.

Try to see your business through your customers' eyes, he says. Thank them for complaints, for example, because complaints uncover opportunities. Look for problems you can solve or headaches you can eliminate for them. Look for ways to add value. Companies often talk about listening to the customer, Benzinger adds, but it's really much more of a collaborative effort a matter of discovery together.

In their article, A Blueprint for Bricks to Clicks, (Strategic Finance, November 2000), Cindy Lerouge and Angela Picard offer some useful questions to help structure this discovery phase:

How will e-commerce impact customers, business channels, and market segments?
Can e-business solutions reduce dissatisfaction with our products and services?
How do our e-commerce initiatives compare to those of our competitors?
Can e-commerce attract customers from our competitors and/or generate new customers?
Can e-commerce technologies change or remove barriers to doing business with our company?

Michael Blystone, an e-business leader for GE Capital IT Solutions Managed Services Div., also stresses the pivotal role of the customer. In his white paper, Dot.Bam: Moving from Bricks to Clicks, Preparing your company for the world of e-business, Blystone cautions against getting too caught up in technology instead of zeroing in on customer needs and gives practical recommendations for learning more about just what those needs are.

Understanding customer needs is a key driver for a successful online strategy, he notes. What is important to your customer? How do you know?

You can ask them directly through response cards, user forums and surveys, he suggests. Surprisingly, this alone isn't as successful as one might think. What people say they want and what they actually buy are not always the same.

The most effective method for understanding your customer is to take a multi-pronged approach. This includes surveys; focus groups; customer interviews; interviews with frontline customer contacts, including sales, call center personnel and service staff; and interviews with industry experts and visionaries, customer advocates and partners.

Being customer-focused is essential, but it's equally important to make sure that any e-business initiative be firmly rooted in your fleet's total business plan, notes Tom McLeod, president of McLeod Software. The Alabama-based company a long-time provider of dispatch, billing and payroll software is rolling out web-based (ASP) versions of their systems.

We try to get people to back up and think about what they are trying to do in terms of their total business plan, McLeod says. Fleets need a strategic technology plan, but it should exist within that larger, comprehensive plan for the company.

DEVELOP A PROJECT PLAN

Once companies establish their goals, the next step in managing a project is to define and get agreement on exactly what the project will deliver, including the acceptance criteria for those deliverables. Not laying out project expectations clearly and fully is one of the biggest causes of failure, observes Erik Bleyl. Everyone involved in an e-business implementation has to be aiming at precisely the same target.

E-business is very complex today. You need the right hardware, the right network, the right economics, the right partners, he adds. This complexity makes project clarity absolutely essential.

Developing a project plan also includes defining the specific tasks in detail and then assigning responsibility and accountability for each task. In the case of e-business projects, this step has to involve identifying someone who will champion the project.

Most experts agree that if the project is to succeed, the champion should either be a top company executive or someone who has the strongest possible support from the top. Somebody has to personally own it, to have responsibility for its successful completion, says McLeod. And the higher up they are in the organization, the better.

Lerouge and Picard agree. The [e-business] management game is difficult to play without a fixer, a person or group with the prestige, visibility and legitimacy to facilitate, deter, bargain and negotiate effectively, they say. A lead executive must champion the e-transformation process.

A leader alone can't drive an e-business project to successful completion, however. The impact of an e-business implementation is felt throughout an organization, cautions Tom Weisz, president and CEO of TMW Systems. The Ohio-based software supplier is making many of their fleet management solutions also available via the Internet. Therefore, you have to allow adequate time to train everyone. You can't just say, Joe is my technology manager. He'll handle everything.

The main thing we try to emphasize is to allow more time for training than you think you'll need before you go live, agrees McLeod. Sometimes customers will say, Well, our people are already computer-literate. This won't be a problem for them to handle. Management should insist on dedicated training time, away from regular duties, for everyone impacted by a new system.

If you have a customer or customers who are especially important to your business, it might be prudent to also meet with them and tell them about the changes you are making, when you hope to implement the new systems and what to expect. Then, if you do happen to hit a problem or have a disruption, they will be more likely to be understanding, he notes.

We tell our fleet customers to look at this step as another opportunity to call on their own customers, to improve and deepen working relationships.

In addition to the challenge of automating processes, you'll need to manage change as people react to having their roles, functions and even their compensation affected by the introduction of e-commerce initiatives, note Lerouge and Picard. That's a critical factor, so be sure to mobilize and motivate employees so you'll all be onboard your e-business initiative together.

THE VENDOR

The other critical member of your project team, of course, is the vendor, who may play a very big role in everything from helping you to calculate the ROI to training your staff. Your choice of vendor and your working relationship may vary, however, depending upon the urgency attached to the e-business project, says Weisz.

If a fleet is not already in trouble, then it has the luxury of time to get to know the various vendors and experiment with the various solutions available, he explains. However, if competitive pressures, service issues or other problems make implementing an IT or e-business solution a matter of immediate concern, then the first project is really, stop the pain now.

In this case, the choice of solution provider becomes especially critical. You need a vendor partner to help you through the current situation first, but you also want to be able to grow from there once the crisis has passed, Weisz adds.

To do this successfully requires more flexibility. You have to realize that you are probably not going to get a 100% right away. In an emergency mode, you'll also be more dependent upon vendor references from others you trust, because you won't have the time to do all the research yourself. Factors like options and scalability also become more important concerns, he says. You will need to have the discipline, even under considerable pressure, to make a decision you can still live with 18 months from now.

Herbert Schmidt, president of Contract Freighters Inc., is a strong proponent of the planned versus the crisis approach to implementing e-business solutions. I think the right approach is to be fast when you're learning and experimenting, and slow when you're implementing, he offers. At CFI, we are always testing new solutions, but we take a cautious and well-considered approach to implementing something company-wide.

If you keep informed and stay current on what's available, you can implement rather quickly, based upon actual customer demand, he explains. The availability of ASP solutions has also shortened the e-business start-up time period and reduced cost of entry for fleets.

READY FOR SUCCESS

The real beauty of the Internet is that companies don't have to do so much to enter the e-business arena, agrees Dan Bentzinger. Today, more and more of the collaboration is being done by vendors themselves working together to offer already-integrated solutions to fleets, shippers and third-party logistics providers.

Fleets that have not begun exploring what e-business can mean for their own operations should begin that process, he says, and it is certainly not too late to get into the game. I don't buy that. Companies should jump in when led by customer demand, by new opportunities. The Internet was tailor-made for trucking. It will help take us to the next levels of productivity and success.

WHAT IS A PROJECT?

Odd as it may sound, one of the biggest problems managers have with e-business projects is distinguishing them from ongoing business activities or processes. All projects:

Are unique, one-time events
Have clearly stated objectives
Have a defined beginning and end date

For example, dispatching trucks is a process, but implementing a new dispatch and online load-tracking system is a project. Once the new system is in place, it becomes a process. If you decide to upgrade the system, you're launching another project.

PROJECT MANAGEMENT BASICS

All project lifecycles, including e-business initiatives, should follow basically the same course, according to Michael R. Berry, a project management trainer and consultant in Learning and Education Development for The Boeing Co.'s Shared Services Group. Managers from all facets of the organization from IT to engineering and human resources go through our training program, he says.

Boeing's program is based on the Project Management Body of Knowledge Guide from the Project Management Institute. Good project management practices can not only save companies time and resources, but they can also help to assure success, he notes.

Here's a quick overview of the key project management steps. Additional information and training is available trough the Institute at www.pmi.org.

Define the goal, or what you want the project to accomplish. In other words, answer the why are we doing this? question.
Develop a project plan
1. Define and get agreement on what the project will actually deliver, including the acceptance criteria for these deliverables.
2. Create a work breakdown to identify the various tasks and activities involved with the project.
3. Do a task analysis and description, defining the work in detail.
4. Assign responsibility and accountability for each task.
5. Estimate the time, cost, labor and other resources required.
6. Sequence the project activities, organizing the flow of the work and identifying tasks that are dependent on other tasks.
7. Assemble or load all the resources for the tasks, according to the work sequence schedule. Do you have everything you need, including enough people with the particular skills/expertise each step of the project requires? Will they be available when you need them?
Implement the project
1. Decide how you will provide visibility to the project, keeping everyone involved or impacted by the project informed
2. Determine how you will control the project and monitor progress
Complete the project. The point of closure must be clearly defined to keep projects from dragging out indefinitely or from growing as they proceed along.

It's also important to do ongoing risk analyses and risk abatement throughout all stages of the project, says Berry. Managers need to keep asking, Where is the risk? What's the probability of these risk factors actually occurring? What would be the impact of a failure of this task in terms of time and cost on the total project? Looking ahead for risks allows you to put safeguards in place against potential problems or to make contingency plans.

YOU KNOW YOU NEED TECHNOLOGY WHEN

It's one thing to talk about implementing an e-business solution, but how do you know when the timing is right for your fleet? According to Tom Weisz, president and CEO of TMW Systems, there are some symptoms that signal the need to stop discussing and start doing:

It is time to get serious about e-business, Weisz says, when:

You're working too many hours and asking your staff to put in too much routine overtime.
Errors and problems are increasing.
The need for information is outpacing your ability to deliver it, even though you have the data somewhere within your system.
You can see the potential for growth, but you're not in the middle of it yet.
Customers are asking for services you can't deliver.

Is there also a way to tell if you don't need technology? Certainly, says Weisz. If you ask yourself, what will we be doing next year? and the answer is, just exactly what we're doing now, exactly the way we're doing it, then your fleet can just relax and forget about e-business projects.

HITTING THE TARGET

The Anderson Logistics Group, Inc. administers the backhaul program for Godfrey Transport, a wholly owned subsidiary of The Keebler Company. The private fleet has 700 trucks located in over 50 cities across the country. According to Anderson president Doug Anderson, the opportunity to reduce empty backhaul miles is what made the fleet decide to implement an e-business solution.

Godfrey Transport is a private fleet, and their number-one responsibility is to get Keebler products on the shelves for customers to buy, Anderson explains. The result is that we have 3,500 backhaul opportunities per week. In the past, we tried to find backhauls manually, but it was a huge administrative burden, and we calculated that it would take a sales force of at least 12 people just to sell it. We needed access to hundreds of shippers, so an Internet-based freight exchange seemed like the best solution.

According to Anderson, his company has followed traditional project management practices to implement their automated backhaul management system, from goal setting through developing a project plan. We all agreed on the problem we wanted to solve and on what we'd consider success, he says. One of the things that impressed us about Transportation.com was that they understood the job we do and what we wanted to implement, right from the first meeting. Instead of saying they wanted to learn more about our business, they said, Here's how we can help you to achieve your business goals, and here's how we'll do it.

As the company reviewed potential e-business partners, they developed other criteria, Anderson notes. His short checklist can be of use to any fleet ready to begin an e-business project:

Know exactly what you want to accomplish and what will equal success.
Choose a stable supplier partner with the expertise and products to deliver what you need.
Look for a partner who is also willing and able to help with project management and training.
Check to see if the company is doing any marketing. The level of marketing a trading exchange does is actually a big concern, says Anderson. If they're not aggressive about getting their name out there in the marketplace, they won't have the customer base to work with.

We are still in the process of our project implementation with Transportation.com, Anderson says, but I feel very good about where we are now. Even if we begin by filling only 15 trucks per week, we'll be making progress. And we're learning, building our knowledge base as we go along. Within five years, we'll be out there fully functioning.

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