For many organizations, e-commerce systems are not a nice-to-have but essential to their survival in the digital world. Nevertheless, our research shows that success with e-commerce is far from guaranteed.
E-commerce is a mature technology, with about half (49%) of companies that completed our annual Technology Trends survey using some form of an e-commerce system. However, e-commerce systems tend to carry more risk of cost overruns than other types of technology investment. Figure 6 from our full report, E-Commerce Adoption Trends and Customer Experience, shows that 21% of organizations exceeded budget projections for the cost of implementing and maintaining these systems, while only 18% were able to come in at less than budget. The majority (61%) find TCO predictable.
E-commerce systems are exactly as the name implies: systems that enable organizations to transact business electronically, primarily through the Internet. Although the Internet can and should be used in countless ways to develop and enrich the customer experience, it is business transactions that are the defining characteristic of e-commerce.
E-commerce has become increasingly complex as it has boomed. Moving beyond stand-alone web storefronts, e-commerce systems now must interface with CRM systems, supply chain management systems, and ERP to provide real-time data for managing inventory and forecasting customer demand. E-commerce systems also include the use of web APIs that allow buyer and seller systems to communicate directly. At the same time, older electronic data interchange (EDI) systems continue to be deployed and extended in B2B commerce. All of these—website commerce, web APIs, and EDI systems—fall under our definition of e-commerce systems.
“You can’t view e-commerce as just another sales channel,” said Tom Dunlap, director of research for Irvine, Calif.-based Computer Economics. “Unless an organization is purely a digital business, it will need to deal with customers who choose different modes for different parts of their relationship. Without fundamentally rethinking business processes around product data, pricing, order fulfilment, and returns, an e-commerce program will fail.”
The full report provides an overview of e-commerce adoption and investment trends, providing data on how many organizations have the technology in place, how many are in the process of implementing it, and how many are expanding implementations. We also look at the return on investment experience, total cost of ownership experience, and considered or planned uses for new e-commerce investment. We conclude with important principles to apply in planning and implementing e-commerce systems.
This Research Byte is a brief overview of our management advisory on this subject, E-Commerce Adoption Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).