references for online file w13 - wps.prenhall.com

Chapter Thirteen: Order Fulfillment, eCRM, and Other Support Services 1

As the entire world watched the transition to the new millennium occur without any of the feared major Y2K problems, the B2Cindustry in general, and online toy retailers in particular, experienced a catastrophic logistics problem at the end of 1999.

According to reports by many popular media and EC research companies, overall satisfaction with online shopping declinedsignificantly in December 1999 and January 2000. Consumer frustration with late deliveries and with poor customer servicebefore, during, and after purchases drove this decline. In general, e-tailers struggled to meet the demands of last-minute holidayshoppers. It became clear during the period of peak demand that the order fulfillment infrastructure of most e-tailers was weak.

The situation was especially critical in the toy business, where competition was fierce. Many toy e-tailers promised to paydelivery charges and even gave $20 discount coupons. The Toys “R” Us site (toysrus.com) averaged 1.75 million visits frompotential customers each day, and eToys (etoys.com) averaged 1.9 million. The number of toy orders far exceeded thecompanies’ projections. As a result, toysrus.com notified customers that only orders made prior to December 14 would arrive intime for the holidays. For orders made after that date, customers would have to pay a premium if they wanted to expediteshipments. A few days prior to Christmas, toysrus.com notified some customers that the toys that they had ordered for theholiday (even some ordered before December 14) probably would not arrive in time and offered these customers $100 couponsas compensation. eToys and other e-tailers experienced similar problems. Amazon.com was forced to ship multiproduct orders inseveral shipments instead of one, substantially increasing its expenses. It is no wonder that consumer satisfaction with onlineretailing fell. The e-tailers themselves undoubtedly felt considerable dissatisfaction with their order fulfillment record.

Sources: Bloomberg News (1999), Cooper (2001), and Taylor (1999).

Online File W13.1 Order Fulfillment Troubles in Toyland

REFERENCES FOR ONLINE FILE W13.1Bloomberg News. “Toys “R” Us Falling Short on Christmas

Deliveries.” December 23, 1999; Cooper, G. “PresentPerfect.” DestinationCRM.com, November 2001.destinationcrm.com/articles/default.asp?ArticleID=1218(accessed April 2007).

Taylor, C. “Christmas Postponed.” Time, December 26, 1999.time.com/time/magazine/article/0,9171,36503,00.html (accessed April 2007).

2 Part 5: EC Support Services

ONLINE FILE W13.2

HOW DELL COMPUTER FULFILLS CUSTOMERREPAIR ORDERSOne of Dell’s success factors is its superb logistics and orderfulfillment systems. Customer orders, which are receivedmostly online, are automatically transferred to the productionarea, where configuration determines which components andparts are needed to create the customized computer that thecustomer wants.

Once configuration is complete, the problem becomeshow to get all the needed components so that a computercan be ready for shipment the next day. As part of thesolution, Dell created a network of dedicated suppliers forjust-in-time deliveries, as well as a sophisticated computer-ized global network of components and parts inventories.The global network is also used for product services(e.g., repairs, upgrades, demanufacturing, etc.).

Let’s examine how Dell provides service when a computerthat is in the customer’s possession needs to be repaired. Dellis trying to achieve for repairs, upgrades, and other servicesthe next-day shipment that it uses for new computers. Forrepair activities, Dell needs parts and subassemblies to bedelivered to hundreds of repair stations, worldwide, frominternal warehouses or external vendors. The search for theparts and their delivery must be done very quickly.

To facilitate this search for parts, Dell is using an onlineintelligent inventory optimization system from LPA software(xelus.com). The system can reconcile the demand for partswith the action needed (e.g., repair, upgrade, transfer, ordemanufacture). For example, the system allows Dell tofactor the yield on reusable parts into its supply projection.This allows Dell to use repairable parts to compress time andreduce costs, enabling a team of about 10 employees to suc-cessfully process more than 6,000 service orders every day.

The online system generates timely information aboutdemand forecast, the cost of needed inventory, and “days ofsupply of inventory.” It compares actual with forecasteddemand. This enables Dell to communicate critical informa-tion to external and internal customers, reducing orderfulfillment delays.

Producing or acquiring the required parts throughcomponent substitution, upgrades, and engineering-changeorders must be effective in order to provide superb customerservice at a low inventory cost. The system also provides anonline standard body of knowledge about parts and planningstrategies.

Sources: Compiled from an advertising supplement in CIO Magazine(1999), Xelus, Inc. (1999), and Dell (2004).

Questions1. This process improves what portions of order

fulfillment?

2. Enter xelus.com and find information about its inven-tory optimization and other SCM-related products. Listthe major capabilities of the products it offers.

3. Enter dell.com and find information about how Dellconducts repair (warranty) customer service.

4. Relate this case to the discussion of “returns” in thischapter.

5. What competitive advantage is provided by this Dellsystem?

REFERENCES FOR ONLINE FILE W13.2CIO Magazine. Advertising supplement, October 1, 1999.Dell. dell.com (accessed December 2004).

Xelus Inc. “Case Study: Dell,” 1999. xelus.com/industries/cs_dell.html (no longer available online).


ONLINE FILE W13.3

GROCERY SUPERMARKET KEEPS IT FRESH: WOOLWORTHSOF AUSTRALIADealing with early movers of pure e-tailing is a majorproblem for established retailing. How is a well-establishedmajor supermarket to respond? With huge investments inbrick-and-mortar stores, Woolworths of Australia found itselfdealing with just this question. Three major players dominatethe grocery market in Australia: Coles Myers, Woolworths, andFranklins. These three companies control some 80 percent ofthe marketplace. Franklins, which is owned by a company inHong Kong, takes a low-cost, minimum-service approach.The others, both Australian-based, provide a full range ofproducts, including fresh foods and prepared meals.

Woolworths’ initial approach was to set up a standardWeb site offering a limited range of goods but excludingperishable items. The delivery service was initially availableonly in areas near the company’s major supermarkets.Woolworths felt it had to respond to the newly emergingapproaches from online entrepreneurs. If those organizationswere allowed to take over a sizable segment of the market, itcould be difficult to recover it.

It was not long before management realized that thiswas not an effective approach. Woolworths’s staff had to walkthe aisles, fill the baskets, pack the goods, and deliver them.For an organization that had optimized its supply chain inorder to cut costs, here was a sudden explosion in costs.When gross margins are only 10 percent, and net marginsaround 4 percent, it is very easy to become unprofitable.

Furthermore, Woolworths has established its place inpublic perception as “the fresh food people,” with fruits andvegetables, freshly baked breads, meats, and prepared mealsbeing promoted heavily. If home shopping ignores these,Woolworths is avoiding its strengths.

Woolworths’ Homeshop, the second generation homeshopping site (woolworths.com.au), was designed withfreshness in mind, and all the fresh foods are available fordelivery. Deliveries are arranged from major regionalsupermarkets, rather than from every local store. There isan AU$50 minimum order and a 7.5 percent surcharge for

home delivery, as well as an AU$6 delivery charge. This helpsin recovering the additional costs, but an average order,around AU$200, still returns little profit.

New users can register only if deliveries are possible totheir postal address. On first use of the system, the customeris guided to find the products that they want with sugges-tions from the list of best-selling items. Alternatively, thecustomer can browse for items by category or search bykeyword. Items are accumulated in the “shopping trolley”(cart). The first order is entered into a master list for futureorders, as are subsequent orders.

When the customer has selected the required items,they select “checkout”; at that point the total value iscomputed and the customer confirms the shopping list.Payment is made only at time of delivery using a mobile(cellular) electronic funds transfer (EFTPOS) terminal, andeither a credit card or a debit card. In this way, precisecharges can be made based on weight of meat or fish,as well as allowing for out-of-stock items.

The customer has to set the delivery time and day. Ifthe customer is not home to accept the delivery, additionalcharges will be applied.

Additional services that are available include dietaryadvice, recipes, and recording of preferred food items.

Source: Written by Professor Ernest Jordan, Macquarie GraduateSchool of Management, Australia, August 2000. Used with author’spermission.

Questions1. Describe the driver of the online initiative.

2. Describe the difficulties of moving online.

3. Find the status of online service today atwoolworths.com.au.

REFERENCES FOR ONLINE FILE W13.3Jordan, E. “Grocery Supermarket Keeps It Fresh: Wool-

worths of Australia.” Professor, Macquarie GraduateSchool of Management, Australia, August 2000.


ONLINE FILE W13.4

ORDER FULFILLMENT AT GROCERYWORKS

Each customer order is placed 6.5 to 9 hours ahead of delivery time.

Suppliers pick goods off their own shelves and package them forpickup, with orders sorted by customer and placed in coded bags.

GroceryWorks vans pick up the goods from suppliers.

Fresh goods from suppliers are sent along a conveyor belt; dry goodsare picked from GroceryWorks warehouse shelves.

GroceryWorks vans head to customers’ homes, stopping by supplierson their return trip to the local warehouse to pick up the next round of customer orders.

GroceryWorks truckspick up the next batchof fresh goods from vendors afterfinishing delivery tocustomers’ homes

Frozenfoodsvendor

Video store

Drycleaner

Customers’homes

Producevendor

Meatvendor

“Home meal”vendor

1

1

2

3

4

5

2

3

4

5

RECEIVINGRECEIVING

LOADINGLOADING

Dry goods

Picking zones

Conveyor belt

EXHIBIT W13.4.1

Source: Steinert-Threlkeld, T. “GroceryWorks: The Low-Touch Alternative.” Interactive Week, January 31, 2000.


ONLINE FILE W13.5

OUTSOURCING LOGISTICS AT NATIONALSEMICONDUCTOR CORPORATIONNational Semiconductor Corp. (NSC), based in Santa Clara,California, is a manufacturer of state-of-the-art digitaltechnology. The company reported $2 billion in sales in2004, distributing semiconductor chips and related productsto more than 3,800 customers worldwide (NationalSemiconductor Corp. 2004). The company gains substantialsavings on its global supply chain costs by outsourcing itslogistics activities, both for off-line and online transactions.The primary function of its 3PLs is to move freight by themost efficient means possible. The logistics providers offeradvanced information technology and broader global cover-age, enabling NSC to concentrate on its core competencies ofdesigning and manufacturing its products.

Prior to 1992, NSC distributed directly from its manufac-turing plants, which are primarily located in Southeast Asia. Assales volumes grew and demands for faster delivery increased,NSC turned to FedEx to distribute from a base in Singapore.FedEx relied on its own air transportation equipment, whichrestricted NSC’s shipments to FedEx’s flights and routes.Therefore, in the late 1990s, NSC began looking for a single 3PLthat could provide flexible and efficient transportation. NSCchose UPS Logistics Group, which opened a state-of-the-artdistribution facility in Singapore in August 2000.

UPS’s centralized distribution center receives shipmentsfrom NSC’s plants in Singapore, Malaysia, and the Philippines.UPS Logistics performs the basic functions of receiving andstoring inventory; picking, packing, and shipping to customerspecifications; and arranging outbound transportation.

National Semiconductor’s IT systems were developedin-house and are coordinated with those of UPS Logistics.

The integrated systems enable customs clearance, labeling,and trade compliance. UPS provides the telecommunicationsnetwork, the interface between NSC and UPS Logistics thatexchanges files; balances inventory; and handles othersupply chain functions. With its highly automated IT system,UPS Logistics can go for days without talking to NSC unlessthere is a need for an expedited shipment or a shipmentproblem develops.

NSC has realized savings of 50 percent in its globallogistics costs since it began outsourcing its logistics in1992. With UPS Logistics, it is saving 10 percent over theFedEx system. With additional savings from other innovationsUPS has provided, NSC may see potential savings of between15 percent and 20 percent. For NSC, outsourcing its interna-tional logistics needs has proven to be a cost-effective SCMsolution. The benefits of advanced information technology,carrier flexibility, and logistics expertise have made itsrelationship with UPS Logistics one that will continue todevelop and thrive.

Sources: Compiled from Coia (2002), ups.com (press releases 2001,2002), and national.com (accessed 2007).

Questions1. Why did NSC elect to use a 3PL?

2. Why did NSC move to UPS?

3. What are the major services that UPS provides to NSC?

REFERENCES FOR ONLINE FILE W13.5Coia, A. “Leaving Logistics in Capable Hands.” World

Trade Magazine, July 2002.National Semiconductor. 2004 Annual Report, 2004.

national.com/invest/2004annual/glance.html(accessed April 2007).

UPS. “National Semiconductor Gains Flexible GlobalDistribution to Move Billions of Chips Worldwide.”July 2004. ups-scs.com/solutions/case_studies/cs_natsemi.pdf (accessed April 2007).


ONLINE FILE W13.6

HOW BIKEWORLD FULFILLS ORDERSThe ProblemBikeWorld, based in San Antonio, Texas, (bikeworld.com), isknown for its high-quality bicycles and bicycle components,expert advice, and personalized service. The company openedits Web site in February 1996, hoping it would keep cus-tomers from using out-of-state mail-order houses. The Webrepresented a 24-hour global retail space where small compa-nies such as BikeWorld, with its 30 employees, had the samereach and potential for success as much larger ones.

However, BikeWorld encountered one of Internet retail-ing’s biggest problems: fulfillment and after-sale customerservice. Sales of its high-value bike accessories over theInternet steadily increased, including in global markets, butthe time spent processing orders, manually shipping pack-ages, and responding to customers’ order status inquirieswas overwhelming for the small company.

The SolutionBikeWorld decided to outsource its order fulfillment to FedEx.FedEx offered reasonably priced quality express delivery,exceeding customer expectations while automating thefulfillment process. “To go from a complete unknown to areputable worldwide retailer was going to require more than

a fair price. We set out to absolutely amaze our customers withunprecedented customer service. FedEx gave us the blindingspeed we needed,” says Whit Snell, BikeWorld’s founder.

The exhibit below shows the five steps in BikeWorld’sorder fulfillment process.

The ResultsFour years after venturing online, BikeWorld’s sales volumehas more than quadrupled, and the company was on track tosurpass $7.5 million in 2004. The company is consistentlyprofitable. It has a fully automated and scalable fulfillmentsystem; access to real-time order status, enhancing customerservice and leading to greater customer retention; and isable to service customers around the globe.

Sources: Fedex (2000) and bikeworld.com (2007).

Questions1. Show the flow of parts from the company to customers.

2. Discuss the advantages of outsourcing to BikeWorld.

3. What activities does FedEx perform?

REFERENCES FOR ONLINE FILE W13.6bikeworld.com (accessed January 2007).FedEx. “BikeWorld Goes Global Using FedEx Technologies

and Shipping.” FedEx case study, August 2000.

fedex.com/us/ebusiness/ecommerce/bikeworld.pdf?link=4 (accessed April 2007).


ONLINE FILE W13.8

INGRAM MICRO: WORLD-CLASS COMPUTER PRODUCTSDISTRIBUTOR AND E-COMMERCE PROVIDERIngram Micro, based in Santa Ana, California, has transformeditself from a technology distributor to a global Internet busi-ness and SCM firm. Guy Abramo, senior vice president andCIO, has been instrumental in transforming the business intoa global Internet business while improving profitability andmaintaining the company’s market leadership. He was able toachieve this by helping the company’s vendors build betterrelationships with their customers via the Web.

Before the InternetPrior to using the Internet as an EC tool, Ingram relied heav-ily on its knowledgeable and powerful sales force to interfacewith its customers, from managing orders to anticipatingcustomers’ preferences, needs, and likely purchases, as wellas for postorder and account information that clients neededto track and manage their orders.

Putting the Back-End Systems on the NetTwo main issues were addressed during the creation of a newelectronic interface for Ingram’s customers: appearance andnew information needs. Customers needed accurate contentin user-friendly and readable form that was capable ofmanipulation. The information had to be available in anattractive and simple-to-understand fashion. Customers alsoneeded a different way of doing business, including orderprocessing. This meant changing Ingram’s way of transform-ing its internal data and processes into external information.How would these be achieved? By defining how customerswould use the company’s information and how and when theywould use the services.

Challenges in E-Logistics and E-FulfillmentIngram Micro faced a number of challenges.

1. Accuracy and customer expectations. Although its historiccustomers, including resellers and manufacturers, under-stood the channel process and the likely delays and prob-lems, Ingram Micro’s new customers expected a simple orderprocess, immediate order verification, continual access toorder information, and timely and near-flawless delivery.Therefore, new functions and enhanced information wereadded to the original logistics and fulfillment business.

2. Expanding the concept of “customer.” The companywas serving only corporate buyers, not the millions ofcorporate end users and e-commerce consumers. Ingram’sinternal point of view had to be adjusted to ensure theaccommodation of new needs and perspectives of thenew customer base.

3. Making information more accessible. The biggest chal-lenge was pulling an enormous amount of mainframe datainto DSSs and databases that were easily accessible via theWeb. The key was creating and maintaining an environmentwhere mainframe-knowledgeable personnel could work effec-tively and quickly with Web designers and programmers.

4. Making the data eye-friendly. It was a huge effort toturn the data into easily interpreted information for thosewithout eyes trained to read mainframe information.

5. Integrating disparate systems. Stand-alone systems inthe company’s warehouse (used to make personalizeddelivery and label-printing possible) had to be altered toaccept new types and amounts of data, as well as to

ONLINE FILE W13.7 Players and Challenges in B2B FulfillmentPlayers ChallengesShippers (sellers) Mix of channels, choice of logistics partners, go solo or use aggregation, what

to outsource, integration of strategic, tactical, and operational decisionsReceivers (buyers) Solo and/or consortia buy sites, supply chain collaboration, total delivered

costs, when to buyCarriers Self-service Web sites, links to vertical transportation e-marketplaces,

institutional dragThird-party logistics providers (3PLs) Cooperation from carriers, breadth of modes/services, IT resources, customer

acquisitionWarehouse companies Location, operational intensity, capital investment, mode of automation,

choice of buildersVertical e-marketplaces Where is the “ship-it” button? Who’s behind it? What services are offered?Transportation e-marketplaces Moving beyond spot transactions to ASPs and value-added services, neutrality

versus alignment, market mechanisms (e.g., bidding)Logistics software application vendors Comprehensive solutions, e-marketplace involvement, strategic partnerships,

integration with existing software

(continued)


REFERENCES FOR ONLINE FILE W13.8Bayles, D. L. E-Commerce Logistics and Fulfillment. Upper Saddle

River, NJ: Prentice Hall, 2001. ingrammicro.com (accessedJanuary 2007).

ONLINE FILE W13.8 (continued)

process them correctly. Another issue was the separationand security of customers’ data.

Use of Outside Expertise, Hardware,and SoftwareAlthough most of the resources were internal, some outsideexpertise, hardware, and software were used. The externalresources included those well versed in the most current Webtechnologies and programming methods to enhance speed.Cross-corporation teams were created to develop projectsbetween Ingram and their customers.

The E-Logistics and E-Fulfillment FrameworkThis framework is a virtual, mainframe-based fulfillmentpowerhouse with several external faces and connectivityoptions. Real-time communication is via exchanges (e.g., EDIor XML) with companies’ Web sites, ERP systems, order man-agement systems, and e-commerce engines. Ingram hosts anumber of B2B storefronts targeting specific customers. Jointdevelopment efforts allow resellers and vendor partners tocomplete their business models by “plugging in” to Ingram’slogistics engine.

The ResultsIngram now serves millions of customers in a historic capac-ity (meeting needs directly) and millions of new customers(meeting needs indirectly and transparently). The companynow performs its operations with much more exacting intent.

Ingram’s Advice for Implementation of E-Logistics and E-FulfillmentGetting assistance from the best, either through consulting oroutsourcing, is a key to implementation. Even when the conceptis simple, the execution may be unpredictable and complex.Know your customers, know your limits, and know your cus-tomers’ limits. Identify critical success factors, both from yourcompany’s point of view and your customers’ points of view.

Ingram continues to offer its services to customers whocan use them. The customers benefit by being able to focuson their own core competencies while using Ingram’scomprehensive infrastructure.

Sources: Condensed from Bayles (2001) and from ingrammicro.com(2007).

Questions1. Describe the improvements in Ingram’s back-end system.

2. What improvements in logistics and e-fulfillment weremade?

3. What infrastructure was needed for the new systems?

4. What role did XML play?

5. List the implementation lessons.

6. What are the benefits of the new systems to Ingram’scustomers?


ONLINE FILE W13.9 An Inventory of Teleweb CapabilitiesCapability What It Does Technologies That Make It HappenClick and Connect Allows an agent to offer customers Web-based interaction agents that let online

various options for assistance. customers connect with agents. These include Web-based agents (or hot buttons) that offer Call Me Later and Call Now features. They alsoinclude tools that allow agents and customers tocollaborate in real time (either using text chat orshared whiteboard) or actually talk over theInternet (Voice over IP).

E-mail Integration Allows an agent to respond to, Agents that respond to online inquiries automatically manage, and track e-mails from (e.g., inbound e-mail acknowledgment) or customers. distribute messages to the right person (parsing,

routing tools). “Artificial intelligence” tools enableauto reply (e.g., autoresponse modules areprogrammed using either business rules, patternrecognition, or neural nets).

Online Chat Allows an agent to interact with Chat features similar to AOL instant messaging that customers via text chat. enable customers to chat individually with a rep

(using buddy lists or one-to-one chat features) orin a group (such as a chat room or discussion list).

Application Integration Passes along information about the These provide call center representatives with access customer to the agent during a to customer’s profile information and the current call so the agent can better sell state of the customer (e.g., IP address, what URL and serve customers. they are looking at).

Agent Console Routes calls and provides agents A dashboard-resembling tool helps agents become guidance and scripting to help more productive by managing their workload and them better help customers and routing inquiries to the right person. These tools respond quickly. include skills-based routing, scripting agents,

and queuing.Application Sharing Allows an agent to share Software interfaces such as push-pull cobrowsing

information with customers. technologies that allow both parties to share information.

Self-Service Knowledge Allows customers to access Self-help databases, FAQs, and exclusive extranet Base proprietary information and access to protected files.

databases available for self-help from behind the firewall.

Web Campaign Manages the execution of outbound E-mail engines, marketing automation, and direct Management e-campaigns. e-mail campaigns available from software providers

such as Responsys, MarketSoft, and KanaCommunications.

Speech Recognition Authenticates the identity of the Emerging speech recognition technologies and speaker caller and responds to voice verification.commands.

Call me Allows customers to request an Web enabled, on-demand remote support applications.immediate or scheduled callback from an agent.

Page push The agent “pushes” a Web page onto Web enabled, on-demand remote support applications.the browsing customer’s screen.

Follow-me browsing Allows the customer to watch what Web enabled, on-demand remote support applications.the agent does.


◗ The FAQ page is easy to find. The FAQ page should be available from a navigation bar or navigation column, even if it is on apull-down menu. Alternatively, include a prominently placed link on the homepage and on every page offering customer service.

◗ The FAQ page loads fast. The FAQ page should deliver answers to questions a customer might have, and do so fast. Both pur-poses are best met with text; only rarely will diagrams, pictures, or art be justified. If the number of questions or the length ofthe answers increases page size enough to negatively impact loading time, then the FAQ page should be divided into a num-ber of smaller pages by category (e.g., product FAQ, customer support FAQ, shipping FAQ). Alternatively, create an FAQ indexpage with all the questions and link to individual pages with answers.

◗ The questions are easy to find. Do not force visitors to page down through screens of questions and answers to find the ques-tion they want to ask. List all questions at the top of the page and use an internal hyperlink to take the visitor to the repeatedquestion with an answer farther down the page. After each answer, include a “back to top” link to assist visitors who haveadditional questions. Questions should be grouped by category, with headings, and in a logical order (e.g., questions aboutplacing an order should precede questions about shipping).

◗ The answers are written from a customer’s perspective. Answers should be written in a simple and straightforward mannerwith a focus on telling the customer what to do and how to do it. Limit the use of technical terms and clearly explain any thatare used. If the Web site serves two or more distinctive markets, more than one FAQ page may be needed to serve each typeof customer.

◗ The answers do not repeat information offered elsewhere. Writing duplicate information is a waste of FAQ space and createsproblems when the original information is updated and the FAQ page is not. For example, the answer to the question, “Is mycredit card information safe?” should include a one-word answer—yes—with a link to the privacy policies page. Similarly, donot be afraid to refer the answers to complex questions to user manuals or technical documents, especially if they are availableonline. Finally, if the answer to a question is best provided by an external Web site, create a link to that page but in a newwindow so that the customer can easily return to the original Web site.

◗ Offer an opportunity to ask a question not on the FAQ. Because no FAQ page can answer every question a visitor might ask,every FAQ page should also have an e-mail address, telephone number, a “search this site” box, and a prominently placed “askyour question here” box.

◗ The FAQ page is never done. Customer service representatives should always be looking for new questions customers are ask-ing that need to be added to the FAQ page. Be open-minded in this process; many people may be asking the same question indifferent ways. By definition, a FAQ page is not intended to answer every question that is asked or submitted, but someoneshould be responsible for looking for truly frequently asked questions. Similarly, at least twice each year relevant staff shouldreview each question to ensure that the question is still justified and that the answer is correct. Perhaps every new staff per-son should be required to read the FAQ page and suggest additions, deletions, and changes.

Online File W13.10 FAQ Characteristics

REFERENCES FOR ONLINE FILE W13.9Diorio, S. Beyond “e”: 12 Ways Technology Is Transforming

Sales and Marketing Strategy. New York: McGraw Hill,2002; copyright ©McGraw-Hill Companies, Inc.

Fassman, F. “The Next Route to Customers: Tele-Web Integration.” TMCNET.com, November 2000.

tmcnet.com/articles/ccsmag/0900/0900efeature2.htm(accessed January 2007)

netopia.com (accessed January 2007).


ONLINE FILE W13.11 Customer Service Facilities and ToolsFacility or Tool DescriptionSearch and comparison tools Search for items, compare prices (see Chapter 3).Free services, samples, and Customers love free stuff (e.g., netbank.com provides free bill payment).

entertainmentTracking accounts or order status Self-service for finding current information; popular in e-banking, online stock

trading, shipping (e.g., FedEx, UPS, USPS), and checking the status of an order(e.g., amazon.com).

Frequently asked questions (FAQs) Self-service for answering common questions.Chat rooms and discussion boards A place to discuss problems and opinions with others; creates a community of users;

company experts monitor discussion and help customers resolve problems.Product (service) customization Customers can use customization tools to configure thousands of products and

and configuration services (e.g., dell.com, nike.com); also popular in B2B.Detailed product information, Customers can access expert information (1800flowers.com), tutorials, technical

tutorials, demos, and more advice, and more (e.g., livemanuals.com provides information on how to assembleproducts; people can learn about tires at goodyear.com).

Support services, maps, news Information of general interest to site visitors; supports the interest of the community visitor.

Troubleshooting tools Self-service problem resolution; intelligent diagnosis and recommendation tools (e.g., prismnet.com, woodfinishsupply.com).

Arrange for live communication Customers may arrange to talk or chat in real time with a company representative.Animated agents Animated Web site agents provide guided tours and make customers feel as if they

have personalized service.Personalized Web pages Can display a customer’s frequent-flyer mileage, bank balance, or purchase history;

vendors also use the accumulated information from these pages for advertisementand cross-selling.

Automatic response to e-mail Provides a quick response to customer queries. Answers are first provided by software inquiries agents. If answer is not satisfactory, a human answer can be provided.

Customer interaction (call) centers Customer interaction (call) centers aggregate all inquiries, distribute them so they can be answered, and manage all communication.

ONLINE FILE W13.12

CONSULTING SERVICES AT SAPIENTTo illustrate the perspective of a firm specializing in provid-ing Internet strategy consulting services, let’s look in a bitmore detail at one such firm, Sapient.

Sapient’s strategy consultants—who have both businessand technology backgrounds—have a demonstrated knack forguiding clients through complex industry and technologylandscapes to create entirely new business models. Sapienthelps its clients create workable digital solutions thataddress specific target audiences across the value chain—and support a company’s long-term business goals.

The company’s strategy program works as part of an over-all multidisciplinary approach. The firm focuses on digital,networked technology and its implications for business mod-els, brands, organizations, technology systems, and the enduser’s experience. As a result, the company is able to rapidlyidentify and interpret the issues facing clients. Knowing theissues, Sapient can then create and implement a strategy thatcovers all facets of the client’s business objective.

The services provided include business strategyresearch, development, and articulation; rapid business

assessment and business solution workshops; processinnovation; competitive analysis and research; andbusiness plan development. These services are typical ofconsulting services that specialize in EC strategy. As JackDickerson, Sapient’s vice president who leads thecompany’s strategy practice, says, companies must “eitherfind ways to make the Internet central to their businessplans or risk losing relevance in today’s competitiveenvironment.”

Source: Compiled from sapient.com (accessed November 2004).

Questions1. What kinds of services does Sapient provide?

2. What is the company’s strategy?

3. Visit Sapient’s Web site (sapient.com) and find servicesnot described in the case. List these services.


REFERENCES FOR ONLINE FILE W13.12Sapient. “Application Development and Package Inte-

gration.” sapient.com/what/app_design.htm (accessedDecember 2004).

Sapient. “Key Principles of Sapient Approach.” sapient.com/ideas/Approach+Application+Development.htm(accessed January 2007).

◗ Internet malls. There are several thousand malls on the Web. Like a real-world mall, an Internet mall offers a single point ofentry to a collection of storefronts. A well-run Internet mall offers cross-selling from one store to another and provides a com-mon payment structure where buyers can use a single credit card purchase to buy products from multiple stores. Theoretically,an Internet mall has wider marketing reach than a stand-alone site and, as a consequence, generates more traffic. The down-side is that the online store must share income with the mall owner. For additional details, see Chapter 3.

◗ ISPs. In addition to providing Internet access to companies and individual users, a large number of ISPs offer hosting servicesfor EC. For the most part, ISPs are focused on operating a secure transaction environment and not on store content. This meansthat merchants using the services of an ISP must still design their own pages. This task can be outsourced to a different thirdparty. A listing of top site designers can be found at internetworld.com.

◗ Telecommunication companies. Increasingly, the large telecommunications companies are expanding their hosting servicesto include the full range of EC solutions. MCI, for example, offers Convergence Networking for a flat monthly fee. Web Commerceruns on Microsoft Commerce Server technologies. Similarly, AT&T provides a number of EC services, including the AT&TeCommerce Suite for under $1,000 per month.

◗ Software houses. Many software companies, such as IBM and Ariba, offer a range of outsourcing services for developing,operating, and maintaining EC applications.

◗ Outsourcers and others. IT outsourcers, such as EDS, offer a variety of EC services. Also, the large accounting firms andmanagement consultants offer such services.

Online File W13.13 Types of EC Service Providers

references for online file w13 - wps.prenhall.com

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