"It is impossible for ideas to compete in the marketplace if no forum for
  their presentation is provided or available."           Thomas Mann, 1896

The Internet economy is outpacing even the most optimistic projections of a year ago. The majority of e-commerce activity to date has been focused on the business-to-consumer (B2C) market.  However, today most analysts view business-to-business (B2B) e-commerce as the fastest-growing e-commerce sector. In April 1999, Forrester Research reported that B2B e-commerce sales reached $43.1 billion in 1998 and they expected them to leap to $109.3 billion by the end of 1999. By 2003, Forrester predicts that worldwide Internet sales will reach $3.2 trillion—an annual growth rate of 99%.

The first phase of e-commerce has been characterized by the purchase of relatively simple products bought through what might be referred to as a "pick and pay" paradigm: buyers browse a catalog, pick a product, put it in a shopping cart, and pay. This approach works well when the product is easy to select (such as books, CDs, and software) or when products from different sources are identical (such as stock trades and commodities). Consequently, these have been the e-commerce success stories that we have heard most about (Amazon.com, eToys, Chemdex, and so on).

There’s no question that pick-and-pay e-commerce is big business. Nevertheless, tapping the full potential of the $3.2 trillion e-commerce market will take more. What if your company makes or sells products that require buyers to assess their needs, evaluate combinations of features and options, and make informed decisions? A huge gap exists between the complexity of your selling process and the simple service that e-commerce based on shopping carts supports. In fact, recent market research from Biz Rate/NPD Group indicates that 75% of all e-commerce shopping carts are abandoned—and this is up from 67% one year ago. This statistic highlights that even in the pick-and-pay environment, Internet selling is failing to convert most shoppers to buyers. This gap, if not addressed, could spell failure for any e-commerce initiative.

Selling complex products on the Internet requires dealing with two different types of complexity: 

Another development has paralleled the growth of e-commerce: The Internet is quickly becoming the technology platform of choice for developing many kinds of business software. Traditionally, companies have implemented applications such as enterprise resource planning (ERP) or sales force automation (SFA) software on client-server architectures. These require loading a significant part of the application on each user’s computer. However, companies have found that the high cost of distributing and maintaining these applications makes it unattractive to provide them to all the users who could benefit such as employees, distributors and even customers. This ultimately limits the effectiveness of these applications.

With the emergence of the Internet as a platform, companies now have a cost-effective way to provide current applications and information immediately to anyone using an Internet-enabled device. This improved communication and information flow can enable:

Smart companies are discovering that the power of Internet technology is as enabling as the Internet itself.

How do you help buyers complete the purchase of complex products over the Internet?

Companies such as Dell and Cisco have invested heavily in custom-built systems that deliver a competitive advantage. As a result, each of these companies sells millions of dollars worth of products a day via the Internet. Now, however, a market is emerging for commercial software platforms that deliver this kind of customized selling experience without investing millions on in-house development. These platforms effectively leverage the power of the Internet to make selling assistance available not only to prospects over the Internet, but also to direct salespeople with notebook computers, call center telesales personnel and distributors worldwide.

Today companies such as BMW, 3Com, and Fujitsu are using these Internet Selling Systems (ISS) to change their business models, open new e-sales channels, and radically improve the efficiency of their selling processes.

By assisting at every step of the selling process, Internet Selling Systems make buying a complex product or service as easy as buying a simple one. An ISS can take the knowledge and experience of your best salesperson and product manager and use it to guide the customer to the right selection. Using an ISS, you can increase sales, reduce cost of sales, greatly improve customer satisfaction, and launch entirely new business models rapidly.

The major components of an Internet Selling System are:

• Support electronic exchanges that link buyers and sellers.

• Enable Internet-based auctions and other dynamic pricing approaches.

• Give your selling efforts a global reach that you can support efficiently.

• Empower you to change almost every facet of how you sell.

An ISS can do more than help you sell more and sell better—it can help you reinvent what selling means to your company.

Your Internet selling strategy and your ISS do not have to compete with your existing sales channels.  In fact, as the story of Aspect Communications demonstrates, you can use Internet technology to enable your existing sales channel to operate more effectively. The current trend in e-business is to blend virtual and physical channels—often referred to as "clicks and mortar." Physical channels give you points of presence and touch that you can use to complement the e-channel’s 24x7 availability and expanded reach. For example, customers can order via the Internet and then choose shipping and delivery options or, if they prefer, be advised of physical points at which they may pick up their products. Offices or stores can act as easy return locations, minimizing the hassle of returning products by mail or courier. This makes it easier to buy from you in the first place.

Interactive kiosks can be another channel in a well-executed Internet sales strategy, providing a relatively inexpensive way to expand your market presence. A kiosk implementation can act as a virtual sales assistant with in-depth product information and configuration capability. When linked via the Internet to a company’s sales, distribution, and manufacturing processes, kiosks can provide a fast and convenient way for a customer to purchase your products and services in markets and locations that you otherwise could not reach. When you place a kiosk in a store that stocks products from multiple manufacturers, you showcase relevant product features and differentiate your product from the competition. You can link the kiosk to the store’s inventory system. Then, if the item is not in stock, the ISS can tap into your distribution network to have one shipped directly to the customer. For distributors, an ISS can help sell complex products that they may find intimidating or that they have not been effectively trained to sell. The ISS can make your product line stand out as easier to sell than competing lines, earning you valuable mind share with your distribution channel.

How you deploy your system is dependent on many factors, including the specific physical distribution mechanisms you use today.  No one strategy is right in every situation. In fact, most companies blend elements of the two to fit their specific needs. The most important thing to keep in mind is that eventually an ISS can, and must, impact all sales channels in order to be most effective. To make this happen, you should build your ISS on a technology platform that lets you deploy it efficiently to internal sales people, to outside salespeople using laptop computers, and to distributors and end users over the Internet, in-store kiosks, PDAs, cell phones—any Internet-enabled device.

Simplification is the essence of Internet selling success. In 1998, a Forrester Research study showed that 68% of Internet shopping carts were abandoned, meaning that two-thirds of all Internet shoppers—even with simple products—found the process too complex and unconvincing to buy. In 1999, an updated study by Biz Rate/NPD Group showed that the abandonment rate had actually increased to 75%. Of those who abandoned the process, 31% cited changing their minds as the reason, 26% bought from a competitor, and 18% bought the product offline.

To enable your ISS to convert prospects to customers, you must provide an experience that helps customers or salespeople navigate through complex needs or products with ease. Moreover, your ISS must compel users to move from one step to the next in a seamless flow. At the same time, this flow must be customized to incorporate decisions and preferences that users express at each step in the process.

To accomplish this, your ISS effort should focus on simplifying the entire sales process—from needs analysis to product configuration, pricing, financing, and order creation. Even if you do not implement all of these capabilities initially, you should choose an ISS platform that supports them all. You may not be able to foresee how your needs may evolve, or where your customers or sales force will lead you once you have deployed the system.

A well-designed ISS will seamlessly leverage a single KnowledgeBase or repository across all steps in the selling process. Simplifying the entire process often requires a robust and comprehensive system—much more than just a "wizard" that provides relatively simple guidance through a linear process. Remember: your site competes with all the other sites on the Internet—your competition is always just a mouse click away. Thus, you must make the user experience as interactive, engaging, and simple as possible.

Along with comprehensive functionality and a compelling user interface, a key ISS requirement is to let your users move through the process in any order they choose, while at the same time guiding them to a valid and successful order. Without prior training, visitors to your e-commerce site should find it intuitive, easy to use, logical, and interesting. They should be able to move through the buying process and get the information they need to make a purchase decision. In addition, you should let your visitors roam. They should be able to start navigating from almost any point in the buying process. Too rigid a process may not appeal to many of your visitors. Let them change their minds and back up at any time without having to re-enter screens of information. Give them visual cues that tell them where they are in the process at all times. Provide instant access to any additional information they need. Make sure that the information you provide is precise and accurate.

Traditionally, systems designed for selling complex products have focused on creating and constructing one path through the process. This linear approach was specifically due to limitations in the underlying technology: many systems were built on rules-based configuration engines. You can think of a rules-based system as a series of steps that define what can or must occur as a result of each choice users make in the buying process. In other words, if you choose A, you can only choose B or C. If you model your buying process like this, you can see how rigid and deterministic the associated online experience can be for users.

In recent years, newer technologies have emerged that address the issue of inflexibility. These constraint-based technologies model your complex product and buying environment as a combination of rules and constraints. In other words, the modeling is done not just in terms of what must happen, but also in terms of what cannot happen. Thus, the buyer using a constraint-based system can explore alternatives within a range of options. For example, each time the user makes a new decision, a constraint-based system eliminates invalid alternatives from future consideration. The resulting experience lets users roam through only the set of valid options in any sequence. Another inherent advantage in constraint-based systems is that the user may begin the process of feature selection with any feature. This is unlike a rules-based approach, which typically requires that users begin with a particular feature and proceed through the selection process in a specific order.

In addition to considering the type of reasoning used to guide users, it is important to understand how that reasoning is implemented. Many simple systems require users to select a series of questions or product selections and then submit them in a "batch" to the system for evaluation. This approach, while simpler for programmers to deal with, frequently leads to user frustration. How many times have you filled out an online form, or answered a whole series of questions online, only to be told that one of the first items was invalid or unavailable? This is the result of batch submission. Newer systems are based on engines that run in the background and evaluate each selection as it is made, dynamically updating options and providing user feedback at each step. Immediate and continuous feedback ensures less user frustration—and to more completed transactions.

In summary, a constraint-based system, built on an interactive engine, will steer users away from invalid choices and lead them to a valid solution faster than rules-based systems. This interactive design adapts instantly to users’ choices, tailoring the solution with each click of the mouse. It tactfully informs them when a product configuration is not feasible and guides them to a valid alternative. The result is a more intuitive and engaging experience that converts more prospects to customers.

One approach to e-commerce is to buy your ISS from a sales force automation or ERP vendor who already powers a part of your business. The usual argument for this approach is that the integration between ISS functionality and the other functionality will be seamless. Although this argument has its merits, the ISS component of most integrated systems cannot match the current best-of-breed ISS products in performance. In addition, the architecture of most current SFA and ERP platforms is too client-server-centric to provide the scalability and reliability that you will need for Internet deployment.

Integration issues were a factor in the 1980s. Today, significant advances in open systems standards (including ODBC, JDBC, and XML), coupled with enterprise-level software specifically designed to integrate disparate systems, make it possible to combine best-of-breed applications with legacy applications. The demands of an ISS application - broad functionality, interactive user experience, and Internet scalability - make a best-of-breed solution even more advantageous.

Of course, you need other partners in addition to a best-of-breed ISS vendor. If you need catalog and payment capabilities, you’ll want an e-commerce platform partner. If you need order management, you’ll want an ERP or supply-chain management system. In addition, you need an implementation partner who can support your customization, development, and deployment requirements and manage the project. You need internal experts to supply product and domain knowledge and manufacturability rules. Selecting partners wisely and defining roles carefully are keys to project success.

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