A few weeks ago I had the pleasure of kicking off an SAP Integrated B2B eCommerce project for our newest client. (They’re staying anonymous for now since they don’t want to tip off their competitors). This isn’t going to be one of our simpler projects for several reasons, not the least of which is that they are in a regulated industry and we’ll have to validate our work (yet again) against FDA 21 CFR Part 11. Yet I’m really confident that this project will be one of our best. Why? Because they’ve been thinking and planning for this project for the better part of a year.
A few weeks ago we launched yet another successful SAP Integrated B2B eCommerce website project. This project was uniquely challenging in that before we could go into production, the system had to be validated to adhere to the US Federal Drug Administration’s (FDA) 21 CFR Part 11 Regulations for electronic records and signatures. Culturally, FDA validation is about as far away from our Agile DNA as you can get, so we had a lot to learn and adjust to.
While not explicitly written for a hybris, Magento or Shopify integration to SAP, I just came across this project description on Freelancer.com that really jolted me:
“Hello, can anyone my WordPress Webshop connecting with a SAP/ERP System?” (sic).
As of this writing there are 18 bidders, with bids ranging from $144 to $777…with no clarifying questions asked!
My first reaction was “this is nonsense”, which quickly escalated to an outraged “who are these Freelancer.com guys anyway?“. (For the record, they are an Australian publicly traded company valued at over $500M. They generated close to $20M in revenue last year, (nice 25X valuation huh?) and posted over 5M projects). After a little while I settled in on rationalizing that the person posting that poorly specified project was probably getting what he/she deserved…maybe a single hyperlink from a WordPress page navigating to an SAP ERP login page. Could that be what “connecting” actually meant?
And then I got to thinking.
The story about Avon’s $125M write off of their B2B eCommerce project in Canada was all over the press last month as 2013 was coming to a close. It’s a beastly ending to a project that got started in 2009.
For me, the Avon story started in May of 2011 at the SAPPHIRE show in Orlando. I was one of 100,000 people who saw Bill McDermott, SAP co-CEO, proudly strut on stage with an iPad in hand to lavish praise on Avon’s vision. His key message was that mobile access to SAP would dramatically transform Avon’s business model. (Little did he know how prescient he was…but not in a positive way).
As SAPInsider Dave Hannon reported, Bill demoed a world where:
“…when the Avon lady rings your bell, she’s going to be holding a tablet computer to show you the vivid colors of their products on screen and placing orders and showing you delivery dates. It really is an effective business case. It blows your mind!”
I was sitting there having just signed our fourth client, Office Relief, and laboring to launch our first SAP/Magento integrated B2B eCommerce website with them. Bill’s demo simultaneously validated our market and proclaimed that SAP was vigorously pursuing it.
I felt like David must have felt in the presence of Goliath. (We all know how that turned out :-0)
Fast forward 31 months to December of 2013 and the Wall Street Journal prints the news that Avon was canceling their SAP eCommerce rollout.
The final project scorecard? A $125M write-off and about 16,000 Canadian Avon reps quit.
Ouch! Big ouch.
According to InformationWeek, it was a beautiful website, but it simply couldn’t get the job done. It was unusable.
- You couldn’t login reliably.
- You couldn’t get real time inventory information.
- You couldn’t place real time orders that reserved your inventory.
- It did not support both low and high volume ordering sales reps.
Why didn’t it work?
All the signs were pointing to a mismanaged project with an overly complex architecture.
SAP seems to have upheld their end of the bargain. The SAP implementation appears to be working fine and is able to manage the Avon business well. But Avon decided to bolt on a custom IBM Websphere based eCommerce front end that turned out to be the boat anchor that sank the ship. If you’re not going to go after SAP information in real time, EVERYTHING has to be duplicated in the front end. EVERYTHING. Customer, product, pricing, inventory, delivery, payment rules and data all have to be replicated. EVERYTHING.
That’s complicated. $125M worth of complicated. 16K lost customers complicated. 55 months complicated. How many people got fired complicated?
This project also clearly suffered from a classic case of IT hubris. The project team believed that they knew better than their users…who were hinting at the fact that the website was unusable just as the pressure to launch was mounting. One senior Avon representative was quoted as saying “…the head office kept insisting that the system was working, but it was not. The sales leaders here in Canada feel that Avon is trying to portray the representatives as too stupid to use the technology.”
Bill McDermott was right in 2011. B2B eCommerce websites do indeed have an “effective business case”. Mobile access clearly has its place for certain business scenarios. But one thing is for sure. If a website is launched and no one uses it, you really don’t have a website.
The moral of the story?
Vision is nothing without execution.
There are thousands of SAP ERP implementations all over the world that are ready for B2B eCommerce. I hope they learn from the Avon experience and look for solutions that:
- leverage their SAP investments,
- don’t inject unnecessary technical risk into their projects with complicated (duplicating data and rules) architectures,
- listen to user feedback that is gathered early and often,
- solve real business problems for real business users…don’t just look flashy,
- get into production quickly…3 months versus 55 months, and
- save millions and millions and millions of dollars by eliminating the need for complicated and expensive software and armies of consultants
Hmmmm. I wonder who can offer them that?
Earlier this year, I wrote about how we increased traffic to 3A Composites’ SAP Integrated B2B eCommerce Webshop by over 850%. We did it by simply “coaxing” SAP to send hyperlink embedded Order Confirmation emails upon receipt of a faxed order from Esker’s Sales Order Processing service.
That increased the value of customer self service activity on the 3A Composites’ website by over 1400%!
Dramatic results for little effort.
Inspired by those results, we embarked on a similar effort for another one of our clients, PARI Respiratory Equipment. On this project, we helped them send a hyperlink embedded email to their customers upon what SAP calls a “Post Goods Issue”. This essentially became an Advanced Shipment Notification (ASN) when part, or all, of an order had left the warehouse.
And I thought 3A Composites’ results were dramatic.
I must admit that we’ve never been successful in convincing manufacturers to invest in their very first B2B eCommerce project. In our early days, we would spend inordinate amounts of time trying to get some companies to see the light.
Cost savings. Increased Revenue. Better customer service. Blah. Blah. Blah.
It mostly ended in the same place…”We don’t need no stinkin’ website“…or some thinly disguised variation thereof. (I published that post almost exactly 5 years ago to the day. Wow!) None of those conversations turned into business for us at the time***. Eventually I came to the realization that as much as I’d like to educate the industry about how great B2B eCommerce is and help those “on the fence” companies get into the game…I really can’t afford to do that. That simply can’t be my job.
It turns out that my job is to make heroes out of those CIOs of SAP Manufacturers who have already decided that they need an SAP integrated B2B eCommerce website and are overwhelmed by the complexity and cost of implementing and supporting a workable solution.
I simply help them get it done.
I love kicking off new B2B eCommerce projects. There is nothing more exhilarating than helping a project team kick off, and plan, their journey to the web. Actually, I lie. There is one thing as exhilarating… and that is sharing in the joy of their GoLive. This week I got to do both!
The mark of a great company isn’t how big they are, how many people they employ or how much money they’ve raised. Nor is the mark of a great company the sheer number of clients they have, how much revenue they generate or how much profit they make. Although if I had to lean in any one direction I’d say revenue and profits are pretty important. Read the rest of this entry »
There is no doubt that 2013 has been the year to pour gasoline on the red hot B2B eCommerce fire. A few weeks ago Forrester Research released yet another B2B eCommerce relevant study entitled “Online And Mobile Are Transforming B2B Commerce”. This one was commissioned by hybris and is available for free on their website.
A few weeks back I received some really disappointing news.
After a protracted evaluation process, one of our prospective clients (I’ll call them PlumCo) informed us that they couldn’t do business with us because of the risks associated with our size. In spite of the fact that they loved our solution, and were unable to find a more suitable solution in the market, PlumCo is going to build their own SAP Integrated B2B webshop in house. As if that’s a less risky proposition :-).