Industry viewpoint: get on to the web and streets ahead

Graham Sadd, chief executive of Infobank Electronic Commerce Systems, explains the benefits to the channel of ecommerce.

The fruiterers of old stood on the pavement, shouting out their wares, a tradition that continues in the street markets of London and elsewhere.

But businesses generally don't rely on such haphazard communications and most resellers would agree the channel is much more sophisticated than that.

At all points in the supply chain a range of tools are used to communicate information between trading partners. Parts lists, catalogues, brochures, adverts, direct mail, telesales, faxes, and so on. All these are geared towards either reaching a larger or target audience at the lowest possible cost.

Websites, ecommerce, emails, catalogues, eprocurement and community sites extend the media available for this communication but, crucially, it allows the channel to reach a target group.

Those who remain unconvinced about the electronic bandwagon as anything more than a simple marketing gimmick, will have to learn a few hard and cold cash facts.

If a large organisation is buying an item, the average cost to manually process a purchase order is £80, even if the item is a padlock worth 75p.

And yet web-based or electronic purchasing is 65 per cent cheaper.

The average time from identifying a need to receiving the order is eight days. The average corporate maverick purchasing (where employees buy items themselves to avoid delays, submitting expenses later) is 20 per cent and growing.

The time in administration by the purchasing department is 80 per cent.

And repetitive, routine purchases from known suppliers is also 80 per cent.

The inevitability of adopting ecommerce to exploit these benefits by purchasing managers is now more than 50 per cent.

Total financial savings to UK businesses, if ecommerce was adopted for routine purchasing, is a mammoth £100bn per annum.

For a distributor or reseller in the IT industry, ecommerce is no longer a tactic. Sooner or later, customers will prefer to buy electronically.

It's imperative to be able to communicate in the way that customers prefer, or they'll find someone else that can.

But the benefits apply not only to the desktop user and the central purchasing department. Suppliers that can deliver specific information (pricing, stock levels, availability, order status, and so on) to a target audience at little or no cost, can reduce their own sales cost.

The first step to take is a good, well-promoted website, as this is a very competitive sector. Second step is to catalogue products and services personalised to individual customer needs. It's a simple procedure to create an electronic catalogue of products, but it has to be able to take orders and process payments. The real benefits are when this is integrated with back-office financial and stock control systems.

Smaller firms that don't have the resources to maintain this dynamic sales and marketing channel, can join any one of the hosted buyer/supplier communities being provided by a growing number of telcos and network providers.

Ever been to Petticoat Lane market to listen to the shouting? Anyone unconvinced about ecommerce will find themselves still having to shout their wares.