eBusiness — today and tomorrow

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  • eBusiness - today and tomorrow

    Customers need assistance on the ground as well as an online presence from their suppliers

    W eb access at work has grown to a staggering 70% of busi- ness employees, and busi-

    ness-to-business ecommerce is projec, ted to reach $6.3 trillion by 2005. What does this mean for the pump industry? At the moment, probably, not very much.

    A recent report claimed that

    industrial, shopping cart, on-line

    transactions accounts, at best, for only

    2% of total sales. In the US, the

    much-vaunted Grainger - distributor

    of maintenance, repair and operating

    supplies - only managed 5% of its

    sales through the Internet. The

    experience of the worlds first AC

    drives on-line purchasing tool -

    www.comp-ac.com from ABB, also

    shows similar figures.

    Great revolution

    But it would be a mistake to believe

    that this means ecommerce has been a

    failure. The introduction of the Inter-

    net is one of the great revolutions of

    our time and its importance can only

    grow. What must be appreciated is that

    it is a new innovation. The recent

    bursting of the dotcom bubble merely

    represented a shakeout of the market,

    30 WORLD PUMPS November ZXI 0262 1762/01/$ - see front matte1

    not a failure of the technology or its


    One of the shortcomings of the dotcom

    companies was a failure to realise that

    people do not want a pure electronic

    relationship with their suppliers.

    People, is what drives business and the

    [nternet can only be a tool, among

    others, to bring people and products

    together. What customers really want

    is help in choosing the right products

    for their applications and delivery in as

    short a time as possible. They want a

    personal relationship, in which techni-

    cally competent personnel is available

    to help. Clicks-and-mortar, i.e. com-

    panies with a presence on the web as

    well as on the ground, are the winners

    of the future. This should come as no

    surprise; customers want options.

    There is no single way of ordering that

    will satisfy a customer all the time.

    ABB Camp-AC ecommerce site is

    based around a network of suppliers,

    ensuring that the customer always has

    help within approximately 50 miles of

    his plant.

    Intermediary role

    While many industry pundits and

    government reports were proclaiming

    the death of the middleman, as a

    result of the Internet, ABB believes

    that the role of the intermediary - or

    distributor -will play an even greater

    0 2001 Elsevier Science Ltd. All rights reserved

  • part in delivering to the customers

    precisely what they needed. To

    reinforce this belief the company has

    invested heavily in building what is

    arguably the strongest, most technically

    competent distributor network for AC

    drives and motors on the ground.

    With such a network in place, the role

    of the manufacturer becomes that of

    the facilitator, helping the chosen

    distributors and channel partners with

    technology and ensuring that the

    appropriate infrastructure is in place.

    This is the principle of wwwcomp-

    ac.com: the product master is generated

    and managed by ABB, freeing the

    distributors business system to plug in

    to ABBs back office for the required


    For many, access to this technology

    may still be some way off. But that

    should not stop distributors from taking

    action today to harness the technology

    to maximise customer relationships and

    lowering the cost of doing business.

    Serving the customer better

    While customers may nor be ready to

    buy online, because, for example, fax,

    ing is easier, there are always ways to

    streamline other kinds of transactions

    or communications. For example, can

    customers sign up to attend training

    courses on-line or answer a customer,

    satisfaction survey? The point is that

    manufacturers should use all e-comm,

    unication tools to serve customers

    better, not necessarily taking the

    experience all the way to an order.

    The Internet also provides directories

    of products from different manufac-

    turers, on third party sites. For instance,

    the European Commissions provides a

    database of manufacturers of high

    efficiency motors at http://iamest.jrc.it/

    projects/eem/eurodeem.htm. It is im-

    portant for manufacturers to ensure

    their products feature on such sites, to

    maximise customer choice.

    Another reason why industrial BZB

    sites, in general, may attract only 2% of

    sales is, very often, due to their poor

    design and user-unfriendliness. Compa-

    nies need to ensure that product


    categories are how the customer

    perceives them, not how your company

    understands them. Again, the customer

    needs to be in focus. Extensive type

    codes are of no use unless you have

    been working with that manufacturer

    for 10 years.

    Industrial companies need to take a

    look at the sites of some leading PC

    companies. Looking at these sites re-

    veal a few basic elements that are sim-

    ply missing from many of the

    industrial sites. Compared with these,

    many industrial sites tend to be slow to

    respond; product descriptions revolve

    around convoluted type codes, often

    with no photos; there is no additional

    product information; and easy-access

    hotlines are generally non-existent.

    Now we start to answer why many

    industrial sites make very few sales on-


    Simple test

    Like it or not, electrical and

    mechanical products tend to be very

    unglamorous - unlike books, CDs and

    PCs - and as such the customer wants

    to get the purchase over with quickly.

    So with this in mind, try a simple test.

    Is it quicker to order your components

    by telephone or fax or is it quicker by

    Internet? Therefore, to attract custo-

    mers to your site it needs to contain

    great information about all aspects of

    products and applications. This will

    prime the customer so that they can

    order by phone and fax.

    The signs for eBusiness are certainly

    encouraging. Three million people

    used the Internet in 1994. Now over

    377 million worldwide use it. We are at

    risk of drowning in email - 6.1 billion

    electronic messages are sent daily.

    While on-line sales are 2% in the

    electrical channel today, they could be

    over 24% by 2005. For distributors

    selling to large, technical customers it

    could be well over 50% when ED1 is

    considered as well. Ebusiness has a real

    future. Do not be caught off guard by

    shelving your eBusiness initiatives.

    Stick with it. n

    CONTACT ABB Automation Ltd 9 The Towers Wilmslow Road Didsbury Manchester M20 2AB Tel: 0161 445 5555; Fax: 0161 434 9317

    Email: enquiries@gb.abb.com; Web: www.abb.com/motors&drives

    ABEs Comp-AC ecommerce site is

    based around a network of suppliers,

    ensuring the customer always has help

    within approximately 50 miles.

    WORLD PUMPS November 2001 3l