The e-commerce dilemma

Searching for fulfilment when all you have is blue sky

By Katherine Henry

When people talk about the promise of electronic commerce, they often refer to "blue sky". This is the potential for businesses to fly into new territories and scale heights they never dreamed of before. This optimism is all very well, but it has to be backed with sound business practices and, most importantly, a business which is responsive to customers' needs.

The need for workflow management is being more clearly realised and understood by businesses as their maturity and knowledge in the e-commerce space grows. Corporations are trying to electronically connect themselves to their customers and other businesses. In so doing, they are realising not only the need for workflow over the Web, but also the weaknesses of their existing business practices and internal technical strategies.

Vendors of workflow solutions have seen a tremendous increase in activity over the past month. Coming out of Australia's first real online Christmas and the defeat of Y2K bugs, companies are now ready to move forward with e-commerce strategies.

Despite the promise of a seemingly electronic age to the Web surfer, the reality of the manual back office or unstable back end is clear. This is reflected in December statistics that show a lack of delivery and reflect a high level of frustration for the e-customer (see table this page).

Different challenges are being faced by all businesses wanting to be in the e-commerce space, new and old. While it is initially easy to see benefits to both existing business models, traditional and electronic retailers have lots of work to do before they will win the wallets of their e-customers.

BRICKS AND MORTAR

David Lenz, marketing director of Hewlett-Packard's Enterprise Computing division, said that corporations trying to establish an e-commerce strategy "are surprised by the reality of their existing environment". Traditional bricks and mortar companies are realising that their back office environments do not lend themselves to simply building a Web page with a few hooks to existing systems.

They are also realising that they have cultural, procedural and system roadblocks to overcome before they will be able to successfully satisfy the e-customer's demands. After all, e-customers hardly wait for service delivery levels of a few seconds, let alone a few days. Responses to their inquiries must be instant or the fickle shopper goes elsewhere. Very few traditional companies are currently in operation with a back office environment that can perform to that level.

"This is why straight-through workflow is so important," said Ian Parker of Staffware. Companies trying to attack an e-commerce solution will need to push transaction processing "straight through" the environment without any manual pitstops or human decision making, he said.

Workflow software vendors such as Staffware have been moving their existing client base to these concepts. New clients of workflow software have been automating more workflow decisions as their budgets and systems will allow.

However, older legacy systems are a major financial concern for traditional companies.

Julian Quinn, Australian MD of BEA Systems, said "The CEOs of most companies understand these new technologies and are involved". Furthermore, Y2K investments have solidified the position of legacy systems for another few years. BEA, a middleware provider, is reaping the rewards from this predicament by offering CEOs a more cost effective solution than "system replacement", allowing companies to have their cake and eat e-cake, too.

Furthermore, work-arounds for system down time have become a way of life for many traditional work environments. Even the rare Australian company that runs a 24 hour call centre does not have a continuous, fully functional system. Instead most offer access to a skeletal system or batch loaded platform that supplies data while the online environment is "maintained".

The e-commerce environment will require competitive companies to have system availability in a 24x7 matrix. Anything less will risk loss of business.

CLICKS AND ORDER

The new "e-commerce" entries that were celebrated as being ready to overtake the traditional businesses are finding the road a bit harder than anticipated.

A heavy dose of failed deliveries during Christmas trading has shown that the companies focussed on B2C (business to consumer) need help as well.

Many of the first generation sites have been labelled by analysts as "immature". The sites were precisely that - sites - with nothing behind them but air and traditional supply chains as support. The companies that really want to make it work are now looking at solutions to improve order fulfilment reliability to ensure repeat business.

Since most of the companies that represented this first generation use traditional companies as suppliers, they suffer from the same maladies that affect the traditional corporations. The effect is similar, but indirect and less controllable. As soon as an e-customer places an electronic order, it is turned into a manual request via phone, fax or paper and sent to the supplier. The automated, electronic tracking of the order is immediately lost and all fulfilment follow up must be manual. The e-tailer's ability to get follow on information on a request or delivery is compounded by not "owning" the supplier.

It is here where emphasis on workflow over the Web will be implemented to automate requests, delivery and confirmation of supplies via traditional chains.

So what will companies find when they go looking for a solution today? Companies that have already invested in a workflow technology will be pleased to know that the players in the workflow arena have remained basically the same.

But changes to workflow products have been predicated by the trend to e-commerce. These changes include the way work is routed, the "type" of work that is routed and who (or, more likely, what) receives the work transaction.

Some vendors have rewritten their systems to ensure compliance to these new criteria (see table next page). Workflow products have been enhanced to accept transaction levels likely in an e-commerce environment.

"Staffware is now industrial strength," said Charles Brown from Staffware. "It has been rewritten to handle the work volumes associated with e-commerce, even a thousand transactions an hour." Workflow designed for use in a manual or user-based environment would never have required this throughput from one entity, according to Mr Brown.

BLURRY LINES

The introduction of a standard workflow interface has taken a back seat. The Workflow Management Coalition (WfMC) seems to have lost momentum as the inertia of the "middleware" market grows. Relationships are being redefined as companies seek to to develop strength and position in the marketplace. The past few months has seen relationships being solidified by BEA, HP, Staffware, IBM and others. This will enhance the customer's ability to get a reliable, cost reduced, end-to-end solution for transaction data sharing.

Some of these partnerships being developed between workflow vendors and middleware providers will challenge the clear delineation of workflow versus middleware. In the past, workflow vendors have provided software that delivered work items to users. The user made decisions on the work item and sent it back into the workflow system to be routed accordingly. Middleware was only used by the workflow vendor to pull data from various systems and then present it to the user. A user had to see the data to make a decision on the work. The workflow software managed the presentation of that data.

In the past, much of the appeal of a workflow offering was derived from the GUI presentation of all the associated information: documents, folders, emails, and system data. Workflow systems could manage many different formats of information and present them in an orderly fashion to the naked eye. While every workflow system has programming to make it easy to design workflow, this is usually still done by "specialists" or the vendor at the customer site. The biggest investment in a workflow product has been made in creating a human "user" interface. Much of the cost to develop and maintain workflow products went into the pretty front end.

The line becomes blurry when the work is being delivered from one system as a data stream to another system. The work is bits and bytes of understandable data. No fancy GUI user interface is required. Instead, the concentration is on massaging the data for presentation to another system. This is what middleware products do. Middleware products are completely able to manage these types of transactions without any support from a workflow system. And while a workflow system could be used to deliver the message, the simple decision process could also be easily built into the middleware data transaction. Middleware has the tools to handle this transaction from end to end.

When asked about the overlap of the two product sets in the new electronic transaction environment, Julian Quinn, managing director of BEA Systems, sidestepped by saying, "We are simply interested in ensuring that deployment of these new environments uses BEA technology in some way".

Quinn should feel secure. Regardless of the redundancy of the roles of the two platforms in some arenas, middleware software like BEA's is assured a place in the new e-workflow world. The future requirement of traditional workflow products is less certain.

Katherine Henry is the director of IMc Professional Services, specialising in developing business strategy and defining supporting services.