Outsourcing: let me count the ways
By David Strom
An outsourcing vendor can deliver just about any part of your information technology plan these days. While it is nice to have lots of choices, it is sometimes hard to pick and choose the appropriate vendor and decide which pieces you want to have in-house and which you can safely outsource.
This is the fourth installment in a series on new Web technologies. We began with a look at various Web management tools and techniques..Last time we described payment systems for e-commerce.. In this article, let’s assume you already have a working Web site and want to examine a variety of outsourcing services and products as well as other services that can be used to augment Web storefronts hosted elsewhere.
Before you make any outsourcing decisions, first take a candid assessment of your existing people and their skill sets. Ask yourself the following questions:
Let’s take a look in more detail at the kinds of services each of these providers offers, along with a few recommended vendors.
In the beginning, say in the early 1990s, there were just ordinary Internet Service Providers (ISPs). These companies provided a dial-up telephone number, an e-mail account or two, and very little else. Some of the more forward-thinking ISPs also offered packages to host your own Web site on their equipment for an extra charge; others included support for Internet newsgroups and other Internet applications such as real-time chat. Then about two years ago things started to get confusing, with ISPs struggling to differentiate themselves and adding various e-commerce services on top of basic Web hosting. These ISPs offered shopping carts, integrated payment processing, and catalog hosting to round out a complete e-commerce picture, calling themselves Commerce Service Providers in the process.
Nowadays just about every ISP worth its weight in T1 lines offers some kind of e-commerce hosting package. Some, like Concentric Network Corp., have so many plans that it is hard just to wade through the various combinations of features, site metrics (such as disk storage, page requests per month, and e-mail accounts), and operating systems (they offer Windows NT, UNIX, and Linux plans). The trick is in understanding what else besides the straight Web server is included. For example, some plans offer shopping carts, payment processing, and catalog management for the complete storefront.
One of the better storefront technologies is Open Market Inc.’s ShopSite, which uses simple Web forms as a front end to its more sophisticated services and back-end databases. ShopSite is available from a wide variety of ISPs and runs on both NT and UNIX systems.
Other good choices for site hosting with a variety of e-commerce features include IBM Corp.’s HomePage Creator and EarthLink Network Inc.’s TotalCommerce plans. IBM’s offerings range from $25 to $200 a month plus initial fees up to $150, with the first month free. The company offers transaction processing through one of two providers, either Automated Transaction Services Inc. or First Data Merchant Services Corp.
The advantage of using your ISP is that you have a single bill and solutions source. ISPs can offer built-in support for your entire storefront catalog and produce a turnkey operation. But these points can be a disadvantage if you don’t particularly care for the solutions offered. The shopping cart may not support the number of items in your catalog, or the payment processing may not work with your merchant bank. Under these circumstances, you might want to investigate Evergreen Internet Inc.’s ECential service, designed for serious processing and hosting, along with catalog and inventory management. Often, for six-figure fees, Evergreen supports higher-end storefronts and charges about 10% of your total sales for fees.
Storefront service providers
Setting up an e-commerce site isn’t for everyone, as I described in the previous article on payment technologies.. The hardest decision you’ll have to face is whether or not to run your Web storefront in or out of house. As I mentioned in the checklist above, the key factor is how much existing Web-oriented scripting and programming talent you have on staff. Any Web storefront will require a great deal of Perl or VB scripting to get the various pieces working together.
If you don’t have these skills or if you aren’t comfortable with the level of your existing staff, then consider one of the storefront service providers. You also might consider these providers if you have an existing Web site and don’t want to add e-commerce to this site but run something separately. There are dozens to choose from, including such reputable vendors as Yahoo! Inc., Amazon.com Inc., and Intel Corp. with its iCat division, along with smaller companies. Typical monthly fees are less than $100 for small catalogs of less than 50 items. These operators will set up and host your store’s pages, organize your catalog, and send you e-mail when a customer makes a purchase; but that is about as far as they go. Yahoo! has a very easy-to-use system and also a very simple pricing structure that is based on the size of the catalog, with no extra processing fees. Others, such as Amazon.com’s zShops, will include payment processing for an extra charge. But Amazon’s fee schedule can add up to almost 10% of the purchase price!
Many of the providers offer 30-day free trials, and the time invested in setting up a simple test storefront can take from a few hours to a day’s worth of time. A good place to start evaluating any of these storefront providers is the reports they produce on your visitors. Can you track orders and easily import this information into your existing customer systems? Do the reports show those visitors who didn’t make any purchases? Can you produce time-series reports or reports by most popular items ordered?
These providers are good for first-time e-commerce store owners to gain experience setting up their catalogs and understanding the many different pieces needed to operate a storefront. They can also expose the weak areas in your own staffing and skills needs before you get into a larger e-commerce project down the road.
Address verification/fraud prevention
Once you have your storefront operating, the next steps are making sure your orders are from legitimate customers and taking measures to prevent fraud. Credit card issuers classify Internet transactions as “card not present transactions” (like postal mail orders and telephone orders). This means that you, as the merchant, are liable for all fraudulent transactions. A good starting place to understand the implications of fraud can be found on Yahoo’s site.
There are several ways to fight fraud. If you make use of the PC-based point-of-sale systems mentioned in the previous article, they already come with some simple address verification systems (AVS) and credit card number-checking routines built in. Some of the service providers mentioned above, such as iCat, also offer AVS/fraud protection if you use their payment provider, ClearCommerce Corp.
But if your store becomes popular and you need more industrial-strength systems, then consider using either ClearCommerce directly for your payment processing or another provider such as CyberSource Corp. or Plug & Pay Technologies Inc. All of these vendors offer a series of services, including fraud screening, tax processing, fulfillment, and credit card payment processing. Their fraud screens use various automated routines to determine in real time whether a pending transaction could be cause for concern. If it is, then it is flagged for a human operator to intervene. Plug & Pay is less expensive than the others, but offers fewer features.
Customer support/relationship management
Putting up a Web site is more than just databases and catalogs. It is understanding what is important to your visitors and providing your existing customers with the right kinds of information when they need it and in a logical place on your site. A number of vendors have produced enhancements that enable better customer support, including automating lists of frequently asked questions (FAQs), personalization and navigation issues, and links to your call centers.
Lists of FAQs are usually static, dreary affairs that don’t often receive much attention from Web site managers. But they can be a real asset to a corporation’s Web site, by reflecting a dynamic user community with interactive suggestions and responses. One company specializing in this area is RightNow Technologies Inc., which will host your own FAQs and maintain the link. Its service includes a feedback mechanism, whereby each visitor is asked whether or not the question answered his or her query, and then factors this information in the next time a visitor comes with a similar question. To see an example of this kind of service, go to Ben and Jerry’s site and ask about your favorite ice cream flavor. RightNow service starts at $20,000 for two years, and includes software updates and the initial upload of questions to populate the site.
TriVida Corp.’s Personalization Service detects and stores visitor behavior patterns and suggests places on your site to predict what that person is looking for. This is useful when you have a complex site with many different navigational branches and need a way to simplify its structure without eliminating much of the site content. Many vendors sell personalization software that you run on your own network. However, these products are complex and require many months of consulting time to set up. TriVida has a better solution and will host the personalization services on its site. All you need to do to add these personalization features is include a series of special HTML tags within your existing Web pages. These tags alert the services back at TriVida’s site and set up the appropriate recommended links in real time. The service starts at $2,000 per month. There are additional charges depending on the number of links and visitors to your site, but the first three months of the service are free.
Another example of site enhancements is the ability to connect to a live call-center operator from a Web page. Cisco Systems Inc./WebLine Communications Corp. is one of many companies offering such services, which start at $1,500 per operator and can include integration into your e-mail customer response systems as well. To get an idea of how to use this system, go to LandsEnd’s site and ask for help with your shopping needs.
Another place to consider outsourced services is in enterprise e-mail. E-mail is becoming a more critical resource, and corporations are finding out that maintaining a reliable system can be a challenge and/or expensive. If you are presently using a non-Internet system such as Notes or Exchange and are having problems keeping your servers online or the mail flowing, then you might want to consider using one of these services from companies such as Critical Path Inc. and USA.NET Inc.
This is exactly what United Airlines Inc. and the Los Angeles Times did, scrapping proprietary systems that were troublesome to maintain and going with these vendors to deliver e-mail to a wide portion of their end users. Typically, they charge a monthly fee per mailbox, such as $5, with discounts for hundreds or thousands of users. And if your communications needs go beyond just mailboxes for individuals, to discussion groups and maintaining customer mailing lists, then consider services such as eGroups Inc. You upload your address list and these companies maintain it and keep track of your mailings. They can set up discussion groups that anyone with a Web browser can participate in.
Site performance services
Once you have your site up on somebody else’s network and data center, the next thing you’d like to know is how often the site is available to the Internet and how many visitors are coming by. A number of vendors provide the ability to keep track of your site and measure its performance.
Keynote Systems Inc. and Service Metrics Inc. (recently acquired by Exodus Communications Inc.) have for-fee service offerings exclusively, while WebPartner has both free and for-fee services. Mercury Interactive Corp. offers both types of service offerings (called Topaz ActiveWatch), along with software testing products.
Both Keynote and Service Metrics claim similar methodologies. Each places a series of 100 or more “agents,” or software monitors, at various locations around the world, connected to particular Internet backbone and primary-access providers. For a fee, the agents send signals through these networks to a series of common Web destinations, such as e-commerce, general consumer, and portal sites, as well as to custom destinations specified by the site’s owner. The agents calculate packet delays, overall latency, and other measurements to get to these sites, and then send this information back to a central repository. In its reports, the company then summarizes this data, which you access via a Web browser or receive via periodic e-mails.
ActiveWatch uses the same scripts that the other Mercury products use: once a customer develops a script (to navigate to a particular page on a Web site, execute a particular transaction, etc.), it can be used across the board in many different products and services.
Keynote’s Perspective service costs range from $295 to $995 a month. This puts them out of the reach of the average-sized Web operator and on par with the access-line charges for a typical business T1 circuit. They also offer a stripped-down, single-city Lifeline service for $695 per year, although this isn’t really a very effective price point. Service Metrics has more reasonable fees than Keynote, ranging from $295 to $495 per month. ActiveWatch costs $750 per month.
There are two other offerings, one lower-cost and one higher-cost. WebPartner offers SecretShopper Checkout that monitors the checkout page of a specified storefront every 15 minutes for $349 per year. The company also has a free service, which I’ve used over the past few years, that monitors basic site availability and will e-mail you weekly status reports. Manage.Com offers a complete e-commerce package, starting at several tens of thousands of dollars, with in-depth monitoring of various processes.
Again, before you get involved in any of these services, try to sign up for a free trial and examine the kinds of reports you get from each vendor. And make sure you understand the information they are sending you.
Over the course of these articles I have discussed many of the new Web technologies that can help you manage your enterprise and applications. They represent a rich array of services and products that take the humble Web browser into new and exciting areas and can be powerful tools in your information technology arsenal. And because most of these technologies are Web-based, you can test their products out without having to install much in the way of software on your own networks as well as access various demos and free trials around the Internet at all hours of the day and night. I wish you much success with any and all of these approaches. IJ
- The Power of the Portal, by Beth Stackpole
- Intranet Management made easier, by Amanda Mitchell Henry
- Stressed out from stress testing, by Rich Levin
About the author:
David Strom was the founding editor-in-chief of Network Computing magazine and has written over a thousand articles for dozens of computer trade publications. He publishes Web Informant, a weekly guide to new Web technologies, trends, and services and is a frequent speaker at industry events including Next Generation Networks and Networld+Interop. He can be reached at firstname.lastname@example.org.
|Typical monthly fees
|Yahoo!Store from Yahoo! Inc.
|iCat, a division of Intel Corp.
|Amazon.com zShops from Amazon.com Inc.
|Address verification/fraud prevention
|Plug & Pay Technologies Inc.
|Concentric Network Corp.
|EarthLink Network Inc.
|IBM Corp.’s HomePage Creator
|Evergreen Internet Inc.
|Customer support/relationship management
|RightNow Technologies Inc.
|Cisco Systems Inc./WebLine Communications Corp.
|$1,500 per seat
|Critical Path Inc
|$5 per mailbox
|$5 per mailbox
|$5 per mail list
|Site performance services
|Keynote Systems Inc.
|Exodus Communications Inc./Service Metrics Inc.
|$0 – $30
|Source: David Strom and company Web sites.