The catchall “globalization” has become a misused word. It is one thing to evangelize that an organization has a global presence and quite another to satisfy customers in all areas of the world.
After the “buy” or “confirm” button has been pressed, how will the transaction be conducted? How will fulfillment activities be carried out? Will local suppliers and merchants be able to participate in the process, or will an army of closely held warehouses be maintained? How will local language and call center support be handled for international locations? Will products and services be charged in the local currency that commerce is being conducted in? Are there international shipping rules that need to be applied to avoid compliance infractions? Canada, for example, has regulations that prevent U.S.-based booksellers from operating in that country.
Experts state that global electronic commerce will likely hit $4 trillion by 2004. While figures like these are hardly debated by research experts, you will find little agreement when asked how much commerce will be driven from U.S.-based markets vs. international ones.
Anyone who has traveled abroad understands the complexity of moving from one country to the next and returning home. Even more formidable challenges exist with the movement of goods.
Strategies that must be thought out include: determining the total landed cost before the shipment is delivered; understanding export and import regulations and duties; legal documentation to move goods across borders; supporting multiple distribution channels and transportation options; supporting localized returns in global tracking systems; conducting business in the local language and currency; multiple payment options; and maintaining vendors and suppliers in a common database.
Other challenges include supply-chain complexity, client demands, just-in-time production and delivery cycles, mass customization programs and outsourced third-party logistics partners.
To overcome these potential obstacles, solution providers must add value to customers by automating many processes and easing the implementation of their solutions. These are just two reasons why many retailers and manufacturers have started to outsource operations that are not their core competency, such as fulfillment, warehouse management, content and delivery services.
The application service provider model will continue to grow in acceptance and availability of products and services. Taking such an approach is a decision that must be made carefully with full understanding of company business strategies. Providers will have to be selected based on industry partnerships, financial viability, security, flexible payment options and their technology investments. For organizations planning strategies that reach beyond their borders, it would be prudent to select partners that have extensive and proven implementation expertise in designing and maintaining international business models.
Sample lists of solution providers in this area are Syntra, Vastera, Nextlink and Capstan Systems. These solution providers and others help their clients manage the volatile mix of international commerce rules that change regularly. They also will facilitate the quick deployment of global solutions that go beyond simple Web sites.
It has been said that the Internet will accelerate new transportation options, drive down costs for goods and services, reduce the need for paper catalogs, and facilitate the exchange of information among enterprises in ways not readily available in the past. However, all of these points and more will become moot if we do not move past the notion that conducting e-commerce is about setting up a Web page with a “buy” button.