Success Stories to Overcome Real-Life Pitfalls of E-Commerce - Sponsored by the E-Commerce Group


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86th Annual International Purchasing Conference & Educational Exhibit

April 2001

Author(s):

Roberta J. Duffy

Sunday, April 29
Workshop SD
Moderator:
Brian G. Long, Ph.D., C.P.M.
President, Marketing & Management Institute, Inc.

Panelists:
Louise Herfel, C.P.M., A.P.P.
Director Corporate Purchasing
Neiman Marcus

Roy Anderson
Director of Corporate Purchasing
John Hancock Mutual Life Insurance Company

Sponsored by the E-Commerce Group

Nothing can help supply management professionals more when it comes to e-commerce implementation than hearing the real-life trials and lessons learned from fellow practitioners. Two such examples were presented in this Sunday afternoon session and while the approaches were different, the impacts and returns on investment have shared a common theme: success.

Louise Herfel, C.P.M., A.P.P., told the story of how her purchasing department wanted to create a Web site for internal customers to access for ordering supplies, furnishings, printing, capital items, and "just about everything in our stores that doesn't have a price tag on it."

However, in addition, the Web site was to serve some other important functions. It would inform internal customers who the purchasing department was. As she mentions, in the world of retail, the term "buyer" has special connotations, so for purchasing/supply management to make a name for itself was important. The site would also aid in budget forecasting and be used as a vehicle to disseminate information to customers and stores, such as product info and new contracts.

One of the first challenges to this project came when Herfel presented the idea to senior management. While they loved the idea, they told her there were no resources to support it. She would have to fund the operation, figure out the technical details, and implement the project through her own department's resources. In true Neiman Marcus fashion, which thrives in an entrepreneurial culture, Herfel took the challenge.

They followed these steps:

  1. Developed a prototype
  2. Created focus group from the stores and support groups
  3. Hired an outside company to produce the Web site
  4. Tested the Web site for about 6 months
  5. Rolled it out to the company

Over the course of these steps, Herfel ran into many potential pitfalls, but fortunately, many solutions as well.

Potential Pitfall: In terms of security, the Web site required users to input several IDs along the way-too many in fact.

Solution: The solution was to use a portal, which led to….

Potential Pitfall: Portal companies were determined to be too expensive.

Solution: Herfel returned to the Web site designer and found that they were able to develop the portal.

Potential Pitfall: Not all suppliers are ready for B2B, in terms of content management.

Solution: Again, the group went back to the Web/portal company for help. However, in some instances, the solution was to realize that not all contracts need to be executed through electronic B2B. Part of Neiman Marcus's lessons learned was that Internet tools can be just part of a total strategy.

Where does Herfel and Neiman Marcus go from here? Well, this year, the site is being used more extensively than ever. In addition to garment labels, hangers, packaging supplies, and lightbulbs, it also has a feature by which employees can donate to a designated charity, keeping in line with the retailer's strong community- and socially responsible culture. Next year, there's even more in store, including the ability to purchase travel, corporate housing, and alternation supplies and perform online requests for proposals. Throughout the entire process, they'll continue to work with focus groups for feedback and constant improvement.

By Roberta J. Duffy, editor of Purchasing Today® magazine.

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