Will we ever hit zero cost for integration?
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.
What if, as far-fetched as it sounds today, we could evolve the state of the art to the point where the initial implementation of an SAP integrated eCommerce Webshop could actually approach a zero cost? Would more B2B manufacturers get off the eCommerce sidelines?
Today, we regularly come up against competitive proposals for B2B eCommerce websites that come close to asking for a $1M investment in order to place the first online order, and that’s just for consulting services! Software, hardware and ongoing support costs usually double the required investment. Apparently, those prices are acceptable to Manufacturers who consider themselves “Brand Merchants” who sell consumer recognizable products like clothing, food, jewelry, sporting goods etc.. Unfortunately, that’s too high a hurdle for most “Industrial” Manufacturers who sell things like pumps, wheelchairs and repair/replacement parts who simply want to improve their customer services by getting rid of routine phone/fax/email interactions. On the other end of the cost spectrum, we’ve had the “IT allergic” marketing departments of major Manufacturers ask us why we’re more expensive than a Shopify or YahooStore implementation. They cost from $149 – $299 per month respectively, with $50 one time initiation fees. (hint: read my post on B2C versus B2B .)
Compared to those $1M/1 year projects, our clients don’t think we’re expensive at all. But we’re not quite at that $50 one time initiation fee stage yet either. 🙂
So why do these SAP Integrated B2B eCommerce projects cost so much?
It’s simply a matter of supply and demand and the complexities of integrating into the existing business processes and rules of a production SAP system.
There is a reason that SAP is the #1 business software supplier in the world. In large part, it’s because they have a very flexible platform that can be bent and twisted in all sorts of directions to fit individual businesses’ needs. There are very few people in the world who know how to bring all of that complexity to the web in a friendly, scalable and maintainable manner. Simultaneously, there is a growing demand for manufacturers to support their customers with a web order-to-cash experience. The economists will tell you where there is growing demand and scarce supply, prices are sure to go up.
But what if?
What if we could lower the initial implementation of an SAP integrated eCommerce webshop to zero?
At the very least, I think that the ~50% of Manufacturers who are still sitting on the internet sidelines will join the party. I know that for a fact because we’re now winning deals at companies that have been looking for an affordable solution for years. They went to the “big guys” and were overwhelmed by their prices and underwhelmed by their expertise. Then they met us. “Near zero” (at least when you compare it to those $1M price tags) implementation costs and GoLives within 90 days and they’re voting with their dollars. Our business grew almost 80% last year!
For example, a couple of weeks ago, as part of a Conference Room Pilot exercise with a prospective Client (who has been looking for years to replace their home grown under-featured system), we were given VPN (virtual private network) access to their SAP landscape on Monday morning and were demonstrating a live B2B eCommerce portal (their data, business rules and output documents) on Tuesday.
That’s almost a zero cost and a benchmark that no one else in the industry can even come close to!
To be totally transparent though, after facilitating two days of our “threaten to put it into production” workshop, we uncovered our “normal” punch list of 80+ change requests that were standing in the way of putting that demonstration system into production. Most of those change requests will be fairly simple to implement, yet a few of them will require a bit more effort on our part…and that’s where the rub comes in. So while the initial implementation to get to the first working model took relatively little effort, there will be a finite (non-zero) amount of effort required to get Phase 1 live in 30 days after kickoff and Phase 2 live 60 days thereafter.
What if we could reduce the amount of effort required to implement those 80+ change requests to near zero?
When we started this business over 6 years ago, we felt as if that was an impossible goal. There was too much variability amongst how SAP clients implemented their SAP systems and it would be prohibitive to architect a solution to accommodate that variability. Well, six years have passed, we’ve implemented over 30 SAP Integrated B2B eCommerce websites and we’re starting to think differently.
We’re in the midst of analyzing all of those change requests that we’ve implemented, as well as our backlog of feature requests, and we’re going to invest in making them easier to implement on behalf of our clients. We’re going to be working smarter…not harder…so we can continue to lower our implementation and support costs because we want to further lower the barrier of entry into B2B eCommerce for the SAP ecosystem.
Why? Because it’s 2014 and we love making the real value of B2B eCommerce more accessible in the marketplace. As an example, we LOVE the fact that our website is servicing 14,000 routine client interactions per month for Drive Medical. Those interactions used to be serviced by Customer Service Representatives (aka human beings) by phone, fax and email. It’s not only a more efficient way of doing business, but it’s more humane for everyone. We want to do more of that for the industry.
So, what happens when we reduce the implementation costs for SAP B2B eCommerce websites to zero? I think we’ll expose the real B2B eCommerce investment barriers that Manufacturers have: the lack of Executive Sponsorship and the leadership to overcome the inertia of changing the way corporations do business.
But that’s a whole other topic of discussion 🙂
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