You are currently browsing the category archive for the 'Internet Commerce' category.

It was interesting to visit the Web 2.0 conference last week and see the progress and trends compared to my last year impressions.

Here are some of my thoughts:

  • SharePoint is the de-facto standard for Enterprise 2.0 While other vendors have compelling products and features, a CIO that is looking for an internal, comprehensive, secure and maintainable solution has almost only one choice (unless you are on an IBM stack..). Other tools focus on providing point solutions, hosted environments, plugging current SharePoint holes and extending functionality. Microsoft had the biggest and most impressive presence and were heavily promoting the next version SharePoint 2010 that will be launched in the SharePoint conference in October. (Some preliminary details here).
  • The field has definitely matured over the last year. There are more case studies and research about usage, benefits and trends although most companies are not sharing explicit ROI numbers. Some vendors have disappeared while others are growing and establishing themselves at a level where they may be considered long term players and safe for the enterprise.
  • The experts are still frustrated with the slow rate of adoption and the seeming growing gap between the prevalence of social tools and technologies used by marketing and sales to communicate externally Vs. they almost complete absence internally. The rapid adoption of tools like Facebook and Twitter for customer communication not just in retail but in Healthcare and other industries creates glaring discrepancies where the same companies have no tools internally and sometimes even block their own marketing teams from external use of these tools under some outdated IT policy.
  • IT is still not part of the discussion. That is unfortunate because as Steve Wylie, the conference director expressed in a guest post at ZDNET last week, large scale adoptions will not happen without IT.

    “While we could argue that this is a very new market and that businesses take time to change, I also believe that Enterprise 2.0 will be challenged by large-scale adoption until corporate IT is fully on board.  Early adoption has been largely driven by business users and department-level managers.  They had a problem to solve and were fed up waiting for IT to provide the solutions they needed.  They took matters into their own hands by finding workable, web-based solutions and even celebrated this new found freedom from IT.  With a few exceptions, IT took a reactive posture to Enterprise 2.0 and viewed it as a threat to be managed, secured and even blocked in some cases.”

  • Tactical view. One of the most frequently asked questions was “what is the best way to get started?”. The pretty universal answer for vendors and corporate users was to approach it in a tactical manner and find a specific business problem you can solve using collaboration tools. Be it an HR portal to boost morale, tools to help virtual project teams work more efficiently, sales best practices portal or any of many other ideas. Define a narrow business case and implement. So far, trying to approach this in a strategic manner makes finding ROI a herculean task and as noted above, puts IT on the defensive. I hope that this trend will start to change as these tactical solutions rarely provide long term sustainable benefits.
  • Rise of the Community Manager. The most active forum was the one where the newly created function – community managers shared their challenges and tricks for getting people to take part in the social activity. First, It is great to see that many leading organizations have realized the importance of such a task although many had it as a secondary responsibility they volunteered to do rather than a full time position. Creating and maintaining a vibrant and active internal community requires skill, passion and process and the focus should rightfully be as much on that as on the tools that enable the community.

Additional impressions:

Enterprise 2.0 2009 Conference: Aggregate and Organize

What is co-browsing?

Co-browsing lets multiple users work together in their respective browsers through what look like shared screens and communicate via telepresence including video and audio.  The impact of this technology is enormous as companies become more virtual and the need for serious collaboration increases to be competitive in tough times.  To be able to share, interact and see the body language of your collaborator in real-time without extraordinary downloads to your PC or expensive third party solutions could simply change the way we work.  This innovation comes from not Google, or Yahoo but from IBM in a proof of concept project called Blue Spruce, a Web browser application platform that IBM is working on to allow simultaneous multiuser interactions enabled by AJAX and other standard technologies through the Web browser.

blue spruce header

The Blue Spruce project is IBM’s solution to the classic one-window, one-user limitation of current Web browsers.  The application is a mash-up that combines Web conferencing with voice and video and other data forms to let people share content including existing Web widgets – at the same time.  Two different users, possibly anywhere, are able to move their respective mouse pointers around the screen in the browser to click and make changes on the shared application, with the platform enabling concurrent interactions through the browser without disruptions.  Despite the appearance, the co-browsers aren’t actually sharing content. Both collaborators obtained a Web page through the Blue Spruce client, but the “events” enabled by the mouse are what is being sent to the Blue Spruce Co-Web Server.  The idea is that no matter where the two users are in the Internet world, they pick up the general data caches on both personal computers and react to the events.

The applications for co-browsing collaboration are numerous, especially for knowledge workers. In healthcare, IBM has used Blue Spruce to create an online “radiology theatre” product, currently at the prototype stage, which allows teams of medical experts to “simultaneously discuss and review patients’ medical test data using a Web browser.” The project is being run in collaboration with the Brigham and Women’s Hospital of Boston.  According to IBM, it has created a secure Web site that allows select medical experts at Brigham and Women’s Hospital to access and collaborate on data such as CT scans, MRIs, EKGs and other medical tests. Each medical expert can “talk and be seen through live streaming audio/video through their standard web connection, and have the ability to whiteboard over the Web page as well as input information to the patient’s record.” Basically it is a secure multimedia experience running inside a single browser window, using Blue Spruce as the platform.

It is important to note that Blue Spruce is not your typical “fat client” or downloaded application, but it is a fully browser-based application development platform, currently in development, which is being built on open Web standards. The main feature of Blue Spruce is that it allows for a combination of different Web components – data mashups, high-definition video, audio and graphics – to run simultaneously on the same browser page. It’s important to note that the Radiology Theatre app only requires a standard Web browser – so there’s nothing to download for the end user, in this case, doctors.

This is how IBM described how the new online radiology theatre will work:

 ”A group of doctors can log into a secure Web site at the same time to review and analyze a patient’s recent battery of tests. For instance, a radiologist could use her mouse to circle an area on the CT scan of a lung that needs a closer look. Then using the mouse she could zoom into that scan to enlarge the view for all to see. An expert on lung cancer could use his mouse to show how the spot had changed from the last scan. And then, a pathologist could talk about patient treatments based on spots of that size depending on age and prior health history, paging through clinical data accessible on the site.”

“The theatre allows all these experts to discuss, tag and share information simultaneously, rather than paging through stacks of papers, calling physicians to discuss scan results and then charting the results. This collaborative consultation brings together the personal data, the experts and the clinical data in one physical, visual theatre.” 

The impact on rural medicine and the need for telemedicine for key healthcare experts is significantly advanced with this technology.
Perhaps the biggest potential benefit of the online radiology theatre is that it will enable experts from all over the world to consult on cases. The ability for multiple users to “co-browse” means they can interact in the browser in real-time and see each other’s changes.  Of course, since this is medical data, there are significant privacy implications involved in using the Internet to collaborate.  The time and cost savings from collaboration is important, but better and faster decision making is the key.

The need for inexpensive and minimally invasive techniques for real collaboration over the Internet is real and the backlog of potential applications is fun to consider.  Imagine reviewing your health care or insurance claims with a live person (and their reactions) at the insurance company to reduce cycle time, or collaborating on new product engineering drawings from the U.S. with your Chinese manufacturer.  Imagine the potential for teaching or training with key experts and a worldwide audience using a live whiteboard. Finally, imagine not paying big monthly fees for basic meeting collaboration needs on a daily basis.  Blue Spruce is really a technology to keep an eye on.

We’ve all dealt with requirements that were written by well-meaning, but Mosaiclogotechnology-confused procurement departments, or business users who believe that people still use the Mosaic Browser (my first graphical browser!). Few authors of quasi-technical requirements put much thought to the actual cost of implementing a modern, rich, dynamic web application on decade-old technology.

A purposely over-the-top hypothetical quote :

The application must support Microsoft Internet Explorer 5.0+, Netscape 4+ at a minimum graphical resolution of 800×600 pixels.

While you may at first chuckle at this obvious bit of anachronism, think back to the last system requirements you spec’ed out for a web application.

What browsers did you ask to support? Were you shocked when the development team told you you couldn’t have that cool AJAX drop-down because your browsers didn’t support it? Were you suprised when compromises had to be made to the look and feel, or flow of the application? How many users really use those old browsers, anyway? How many of your users do?

“They shoot browsers, don’t they?” — Jeremy Keith

Don’t know the answer? Don’t worry, it’s pretty common. A lot of businesses make requests for web-based applications without first doing internal due diligence to understand their target market. Sure, you can build a web application that settles for the lowest common denominator — but why sacrifice when you might not have to?

Understanding your users’ browsing platform should be one of the first steps to building requirements for projects that involve a significant IT spend on web application development, whether it be enhancements to existing applications, or greenfield development.

Here’s 4 reasons why skipping this important step of due diligence will cost you more money, or users, or attention:

  1. You’ll Be Too Conservative. Fearing that you’ll lose the 0.5% of users who may be on Internet Explorer 5.0, you’ll insist (against your CTO’s recommendation) that all users are important, and if it means sacrificing a few bells and whistles, so be it.
  2. You’ll Be Too Boring. You’ve heard about rich internet applications, Web 2.0, AJAX? If you’re trying to support these new technologies on browsers that are 5+ years old, forget it.
  3. You’ll Spend Too Much. The 80/20 rule will be in full effect when you realize late in the development cycle that no one tested with Netscape 7.2. “But it’s in the requirements document!” cries the project sponsor. Frantic testing will unveil the fact that half the functionality is broken or visually skewed. You fire the designer, and the project goes into a death march to the lowest common denominator.
  4. You’ll Be Unhappy with the Final Product. You’re building the web application to replace your mainframe claims processing system. Or your billing system. Or your financial forecasting package. And the final, boring mess will look exactly like what you had on your old green-screen system, except it’s different. Users are complaining that it’s not easy to use, and your CFO is now revisiting your ROI projections. Projects aren’t supposed to end like this… are they?

Fortunately, judicious use of web analytics and good old fashioned business analysis can provide you with concrete data to build a solid foundation of business cases and technical requirements. The chart below illustrates browser market share over the past 9 months:

Browser Stats April 2009

Source: StatCounter Global Stats, April 2009

You can see that the bulk of market share goes to a very small percentage of very modern and powerful browsers. How can this information help you? In Part 2 of this series, we’ll explore how up-front legwork in web application development can lead to a happy outcome for all.

Thanks for all those who attended our webinar on implementing web 2.0 strategies last week. If you missed it, the recorded webinar is available on our site. Enjoy.

As I promised, here are some of the questions asked during the session that I have not had time to address:

Q1: Using Facebook and Twitter – how do I get started? How can we monitor it?

Getting started is ridiculously easy. Facebook has a good starter guide . Setting up Twitter is even simpler as there is not much to do other than selecting a name. You have only 15 characters so it is not always an easy task. Twitip has a good guide to best practices in twitting and a list of useful services to track and monitor twitter conversations.

Q2: Why would people want to follow a healthcare organization? How do I promote it without spending money? is it really worth the effort and Investment?

So setting up profiles and pages is easy. The hard part is getting people to follow you on a regular basis. The good news is that you just need to get users to act once and add you to their friends list or follow you on twitter. From that point forward you are just one in a stream of many others.
Spreading the word is done in every way possible, but not through direct advertising. Put it on your website, emails, blog and any other marketing communication form. The best promotion methods are viral. If you have something interesting to say, people will spread the word.

Social media communication tools are just one more way to reach an audience in a fragmented media world but health is something people really care about. If you are a regional hospital, publish daily information your community will want to know. Allergy report, flu alerts, flu vaccine reminders, etc. The cost is usually limited to a resource that will write and maintain all these social media properties. We’ll go into ROI in the next answer but first and foremost the benefit is relevancy. Hospitals that will engage and communicate will be relevant and top of mind. Others will be there when the appendix burst.

Q3: What type of investment is required? What is the ROI

We usually see 2 main areas of investment. The first is Strategy. With so many options, tools, opportunities and risks large organization usually do not just jump in but take some time to look at the landscape, their audience, their revenue centers and their media assets and capabilities to form a cohesive strategy. This is the main area we help clients in as they often lack internal expertise. We usually recommend forming a broader web strategy as these social activities are not isolated from the needs to have an attractive and interactive website than engages users and effective e-marketing programs. The strategy part also looks at the organizational ability to support these types of programs, the skills required and can help in building a cost and ROI structure. The cost of a comprehensive web strategy can range from five to low six figure depending on the size of the organization and scope.

The second area of investment is in the program operations. This usually translates to people who dedicate some of their time to writing content and managing user interactions. It can range from a few hours a week for a small program to a full time position.

The returns: like in any marketing program, these activities are judged by their ability to generate increase in profitable patients and donations. Since they provide a great way to reach an audience without a cost per unit (as you have in email, banners or paid search) the ROI increases as the size of your audience.

Mashable.com has a good overview for the qualitative and qualitative measurements for ROI. I think it goes back to relevancy and the need to be part of your audience daily life.

Illustration: Monica Parra / Newsweek

One of the strongest and most misguided arguments expressed online and in many companies we speak with about Enterprise 2.0 is that it is not strategic.

That this collection of tools, technologies and ideas is not yet mature enough, lacks proven ROI, introduces a myriad of security and governance issues and even if successful is not a priority in today’s soft economy. It is too often delegated to IT managers to experiment with and report back in a few years.

Here’s where the difference is: Enterprise 2.0 is not a technology. It represents first and foremost a new way of thinking, interacting and communicating that includes attitude and cultural changes, empowered by IT. Is there anything more strategic than that and more important to a business future success?

It is arguably the biggest opportunity for IT driven cultural change facing organizations since the introduction of PC networks more than 2 decades ago.

One of the C suite most important tasks is to shape an organizational culture that will make their company innovative, competitive, efficient and successful not just now but in the future. Embracing Enterprise 2.0 now and guiding their employees through this transitional period should be one of their top priorities.

While in a few cases adoption started from the bottom up, a change of this magnitude usually needs to come from the top accompanied by the matching set of values and actions that prove the seriousness and commitment to change.

It requires leadership that is able to see that transparency and increased visibility into activities throughout the company will finally enable them to know what is really happening and will create a culture of trust. That openness and exchange of ideas will lead to innovation and efficiency. That collaboration will enable a diverse workforce to work together in emergent ways while being physically and geographically dispersed.

In short, it requires vision that will set a future path and will ask managers to overcome the obstacles in the way. The type of vision CEO’s need to provide and not delegate to IT managers.

The challenge and opportunity is that not many chief executives have realized yet that embracing Enterprise 2.0 is a strategic imperative and are focusing the discussion around short term ROI.

Dion Hinchcliffe at ZDNET provides a comprehensive review of the evidence and opinions regarding ROI and adoption challenges, and adds his own interesting model of collaboration cause and effect chains that while clearly provide benefits, make them harder to pinpoint and measure.

He also concludes that

an accumulating body of knowledge is pointing to potentially dramatic business returns with Enterprise 2.0. If these continue to be borne out, it will affect the competitive and financial positions of the companies that are proactive and therefore their long-term marketplace success

And wonders what it will take to break the current status quo?

His colleague Dennis Howlett on the other end thinks the ROI is still years off and concludes

As always, the secret to long term success depends on management’s ability to maintain a sustained commitment and all that goes with it. The difficulty today is that same management is wondering where the next sale comes from or how cash will be generated.”

The good news is that Enterprise 2.0 does not require large capital expenditures but mostly thorough organizational commitment. There has rarely been an opportunity for businesses to gain so much competitive edge by investing so little.

As in many cultural revolutions, by the time Enterprise 2.0 related changes start translating into business differentiators, organizations that have not made the transition will look as outdated as an organization resisting getting these useless PC boxes or adopting email.

We recently looked into ways that companies can leverage web 2.0 and monetize social networks.

We got a lot of questions regarding the applicability of these principles and methods to different industries and specifically for hospitals and other health providers. As organizations with a strong social purpose and educational / outreach focus, how can they remake themselves and their services to provide innovative and effective web-based information and health?

We envision the Hospital as the center of regional health, building a community of patients, caregivers and healthcare professionals that work online and offline providing care, support and prevention.

It is an overall shift in strategy that transforms the organization to be more Open, Collaborative, Transparent, Interactive, and Social.  Organizations that have successfully executed Web 2.0 initiatives:  share data and information securely and seamlessly with their health care partners, provide platforms for patients, doctors, and hospitals to collaborate on improving the effectiveness of services and communications, foster community patient support networks, and empower patients to gain access to the best health care services and providers.

There have been some interesting efforts but most providers are just in the initial experimentation mode. Ed Bennett maintains a great list on his blog of all the hospitals and their social activities. According to his findings, Twitter has just become the most popular social media channel among hospitals

Paul Levy, Beth Israel Deaconess CEO has been a trail blazer in his blog, sharing thoughts, ideals, goals, results and experiences, promoting true transparency. The hospital has recently launched the first web 2.0 oriented site with a special section dedicated to interactive features such as blogs, videos, podcasts chat etc.

St. Jude Children Research Hospital has close to 35,000 fans in their facebook group and have extensive social media program on their site. Cedars Sinai in LA is using YouTube for staff recruitment purposes.

These are great examples for a few health providers that seem to have a cohesive strategy for this new interactive age. For most hospitals, just being on facebook or Twitter without setting measurable goals and defining a strategy will not yield the anticipated results.

The following diagram shows the different areas where hospitals can consider collaboration and use of social media and interactivity:

 

Some of the interesting opportunities we are seeing for hospitals:

  • Use of social media and communities to create an active health community around their health facilities that will involve patients, physicians and hospitals
  • Enhance educational activities to include online courses and support groups
  • Use blogs and actual access to quality and performance data to promote transparency and trust with the community
  • Use advanced web analytics to capture interests and trends and improve content and services accordingly
  • Build a stronger relationship with Affiliated Health Professionals and allow them to collaborate and exchange knowledge
  • Reduce the customer support functions by moving self service functions to the web
e-commerce on a shoe string

Image courtesy of Flickr

While inexpensively built and operated mom and pop e-commerce websites are as common as snow in New England in January, is it possible to build and operate an enterprise grade e-commerce site on a shoe string budget? E-commerce at an enterprise level is not simply slapping a shopping cart to your website and calling it e-commerce enabled. The demands of an enterprise solution may require:

  • Integration with legacy systems
  • Integration with supply-chain systems
  • Support for multiple currencies and tax codes
  • Multiple store-fronts
  • Profile and history driven offer management
  • Integration with a content management system
  • Business user control over promotions and pricing
  • …and more

Challenges of integration with existing systems alone are daunting enough never mind the fancy e-commerce functionality that is often considered vital for competitive differentiation. No wonder why starting an e-commerce venture or an upgrade is considered a seven figure expense. The cost of an enterprise grade e-commerce product alone can easily account for twenty to forty percent of the budget. The other option is to go with a hosted or SaaS based approach and avoid capital expense for software and infrastructure – not a bad approach for testing the waters but in the long run, charges and fees can really add up.

A well executed e-commerce site can provide great returns on the investment by generating new revenue streams, enhancing existing ones, or reducing operational expenses – and that can’t be too bad for the budget or your career. However, in tough economic times the challenge becomes harder as getting approval for large complex projects becomes difficult and even the approved budgets can get slashed. If your budget gets cut, is there a way to still implement enterprise grade e-commerce? Can an open source e-commerce solution be the answer to the “do more with less” mantra? Is open source e-commerce ready to play with the big boys in the enterprise domain? Let’s explore these questions and the capabilities of the open source e-commerce solutions.

Let’s start with a common misconception that an open source e-commerce product requires significant customizations and the cost of customizations more than offsets any savings from not having to pay license fees. Implicit in this assumption is the notion that a commercial product requires little or no customizations. However, the real-world experience shows us that this is not the case. Even the best commercial products cannot be used out-of-the-box unless you decide to adopt their look and feel and their model of e-commerce. The cost of customizations can add up just as rapidly in a commercial product as they can in an open source one. Therefore a prudent approach would be to adhere to the industry standards and best practices and use out-of-the-box functionality in areas which are not competitive differentiators. Heavy customizations should be limited to the aspects of the website that are true differentiators and result in a unique user experience. This guiding principle applies regardless of the decision to use an open source or a commercial product.

There are a lot of inexpensive and open source e-commerce products out there; however, most of them are nothing more than a simple shopping cart. They are only suitable for the most basic needs of a simple web site. However, Apache OFBiz and Magento are two promising contenders that break from the pack and compete in the enterprise space. In this article we will primarily focus on OFBiz.

Apache OFBiz is actually an integrated suite of products that does not only include e-commerce capabilities but also provides support for accounting, order management, warehouse management, content management and more. An enterprise e-commerce implementation cannot exist as a point solution. It has to integrate and work well with other back office processes and applications. OFBiz’s integrated suite can be used to automate and integrate most back office functions. Even if you decide not to use the built-in functionality it can still be integrated with other existing systems albeit with more effort and cost. It provides enough e-commerce functionality out of the box to match most enterprise needs and the rest can be customized if needed. Here is a summary of our assessment of OFBiz:

Technical Capabilities

# Criteria Rating Comments
1. E-commerce capabilities B+ Provides Robust e-commerce capabilities OFBiz e-commerce capabilities include: catalog management, promotion & pricing management, order management, customer management, warehouse management, fulfillment, accounting, content management, and more.
2. Sign-on and Security B Granular and robust security framework The OFBiz security framework provides fine grain control of the security including multiple security roles and privileges. Roles can be used to control access to screens, business methods, web requests (URLs), and/or entire applications.
3. Technical flexibility & ease of use B Very flexible but complex  OFBiz is an application development platform that can be used to build applications and as such provides a tremendous amount of flexibility.  The use of the entire framework (which includes the database, an Object Relational Mapping (ORM) layer, business object layer, scripting support, and UI tools) is optional.
4. Integration with other apps and locations A Multiple integration methods  OFBiz business services can be exposed as services and accessed by multiple methods including Remote Method Invocation (RMI) and XML Web Services.  Integration directly with the OFBiz Relational Database is also possible.
5. Scalability A Highly Scalable  Java systems are highly scalable provided a production architecture that is designed to support heavy load.  A load balancing device and redundancy at the web, application and database servers can redundancy and scalability.
6. Relational database integration A Support for all major database platforms  The most popular OFBiz database platforms are PostgreSQL and MySQL (both of which are open source).  OFBiz has also been tested with Oracle, DB2, Sybase, and MS SQL Server.  The default installation uses an Apache Derby database which is not recommended for production use. Our research indicates some problems with MS SQL Server database – this should be investigated further prior to selecting that database platform.
7. Skill Set to support NA OFBiz framework and application are based in the following technology components:

  • XML
  • Web Development: HTML, CSS, AJAX/JavaScript, Apache
  • Java Development: Java, JSP, Freemarker, BeanShell, Tomcat application server (possibly)
  • Database Development and Administration: MS SQL Server (possibly), SQL, JDBC

Long term support of the application would require knowledge and familiarity in each of these technology sets.  While these technologies are mainstream and skills should be readily available in the future, skills and experience with the OFBiz framework that is built upon these technologies may not be.

Business Position

# Criteria Rating Comments
1. Financial stability B OFBiz is a “top level” project in the Apache Software Foundation.  The Apache Software Foundation provides support for the Apache community of open-source software projects. The Apache projects are characterized by a collaborative, consensus based development process, an open and pragmatic software license, and a desire to create high quality software that leads the way in its field.
2. Maturity of product suite B Open For Business (OFBiz) was initially launched in 2001.  In early 2006, the project went through the Apache Foundation’s “Incubation” process to review projects for quality and open source commitment.  OFBiz was promoted to a top level Apache project in December 2006.The community for OFBiz is very active.  The major web posting board receives between 20-40 postings per day relating to OFBiz.  The original contributors are very active in monitoring these sites and sharing knowledge.
3. Reference Accounts B- Total number of installations is unknown due to the nature of open source software. The OFBiz websites lists more than 70 companies that use their software. However, there are very few marquee names.

Implementing an enterprise e-commerce solution can be expensive and complex process that requires analysis and investment in people, processes, and technology. While it would be insincere to say that an enterprise e-commerce solution can be implemented on a budget in the ballpark of a mom and pop e-commerce store, the budget can be significantly reduced by:

  • Carefully crafting business requirements
  • Adapting the business model to match industry’s best practices
  • Reducing and carefully planning data migration and application integration
  • Keeping the customizations to a minimum
  • And using an open source e-commerce platform

OFBiz provides a viable open source e-commerce stack that can be used to implement enterprise grade e-commerce. When combined with good implementation practices and solid execution the combination can result in slashing costs by twenty to forty percent — which sometimes can make the difference between getting funded or getting shelved.

Many companies that sell products or services internationally are finding themselves in a familiar dilemma, should their web presence be global or local?

While a global site is easy to control and maintain and can ensure consistency in branding and content quality, it can not address local culture, interests and variation.

I’ve come across an interesting view on the site of the Localization Industry Standards Association www.lisa.org

They see Globalization as a process with 2 parts

  • Internationalization which is the process for defining applications and sites to work in every market
  • Localization which is the adaptation of the International framework to local needs and

And the process as:

I agree that the best approach in most cases is to plan for the site and application to work anywhere and then build in enough flexibility for local control and adjustments.

The challenge in this approach is that defining international requirements and anticipating all local variations is very expensive and time consuming. So what should a company that is expanding internationally do? Here are a few questions and guidelines to consider:

  • Scope of localization: how are you products or services different around the world? Is it exactly the same product (jewelry tableware for example) or does a local audience may have preferences that will impact selection and availability of products (fashion and cosmetics). If the products need to meet local regulations, standards or laws (220V or 110V for consumer electronics, Material Safety or FDA approvals for Chemicals and Drugs) or if products include attributes like language that will make them market specific (Books and CD’s). In each case, a single catalog for all products will provide the easiest way to maintain master product data but sites level of granularity may be determined by the variance in offering. It may be truly global, regional, country or language specific.
  • Centralized or Distributed management. Who will maintain content, details, specs etc. in local languages? Do you assume that a product is not released until all languages have been updated? Do you allow a default language to remain until a local language become available? Is this the responsibility of a central translation group of does it goes downstream to the local group to translate? (If you are thinking about machine translation, don’t. This technology is still not ready for prime time and will drive off disappointed customers)
  • How local should you go? to create a true sense of local site and service, certain adjustments may be needed to the site so it does not look like the translated version of the global template. Does the site has local news and events? Is there editorial content from local sources? Are reviews and communities local? Does the interface adapt to local language without cutting words or providing headers in English? Are local conventions like time format, date format, calendar, currency, address, name formats etc. are specific or generic?
  • Build from scratch or retrofit? While substantial amounts have been invested in current web and e-commerce infrastructure, allowing for globalization and localization is not an easy retrofit and in many cases it will be faster and cheaper in the long term to build a technology foundation that is designed to support these issues. Technology issues to consider:
    • Separation of content from the display. There should be no text or images in pages and no parameters in queries. Many CMS systems support localization and handle pages this way by default but custom build CMS systems rarely do.
    • Support for UTF-8: databases and management tools as well as search engines must support UTF-8
    • Caching and Performance: a system must be designed with advanced caching to avoid extensive load on the database for rendering local editions
    • Support for variable length and right to left interfaces. Different languages have very different word length and even orientation. How will interfaces that were designed for exact size look?

While these are not simple questions to answer and resolve, creating a global experience with local flavors and details can substantially impact the ability of a company to succeed internationally.

submitted by Ken Allard

In the first post in this series, I wrote about companies that have new online revenue potential by virtue of being brokers of goods or services or by owning a significant share of market.  In this entry, I will explore the revenue opportunities for more traditional content owners who answer yes to question number 3:

  1. Do you act as a broker of goods or services?
  2. Do you provide content or advice to a significant percentage of a specific industry or consumer segment?
  3. Are you facing new competitors who generate revenue by aggregating audience around your content or by providing meta-content?
  4. Do you have data or knowledge within your organization that is obscure to your clients?
  5. Do you serve an audience that is highly fragmented?

Most traditional media companies have faced dramatic profit losses as their audiences have flocked from physical products to online alternatives.  It is ironic that their proprietary content gained intrinsic value online while simultaneously losing its ability to generate income.  Music labels have watched in dismay as their content is shared, and worse yet distributed to thousands, without resulting in direct sales.  Publishers have seen the value of their vast collection of high-priced text-books diminished as students rely on digital sources of  content and publish notes and answers to study questions on their own personal sites.  Even super-star authors like J.K. Rowling, find themselves battling superfans who create valuable media properties by adding meta-content (e.g. character lists, family trees, etc.) around their published works.  (She won that court case, but who wants to start suing fans?)

It is an unfortunate paradox, that while the Internet has dramatically increased the popularity, utility, and accessibility of all kinds of proprietary content, it has simultaneously and systematically erased the revenue models that most traditional companies have relied upon.  Nearly every consumer content company has decided that both paid subscription and fee per article/data slice business models are dead online.  (Consumer Reports is one of the last notable hold-outs.)  Proprietary business to business content services have not been as severely impacted, but they too are not recognizing opportunities to increase profits.  I believe that these organizations are failing to monetize their content because they are failing to take advantage of the fact that it is more popular, useful, accessible and social once it is available in online media.  The key to new revenue is to exploit these inherent benefits:

    1. Popular – Content should be marketed to , optimized for, and appreciated by the broadest possible relevant audience
    2. Useful – Content should be helpful, active, purpose driven and immersive
    3. Accessible – Content should be open, pervasive across devices, and present in the right context
    4. Social – Content should be viewed as the basis for an interaction between people, author-consumer, consumer-consumer, consumer-group, author-group

The most successful online initiatives exploit these online advantages.  Let’s look at a few different examples of companies who have already taken the right steps or who may be missing new revenue opportunities:

Universal Music (various artist Web sites) - Universal Music, like most other major music labels, is failing to monetize its content online, abdicating the revenue to various unrelated 3rdparty entertainment sites, direct to consumer commerce sites, and fan sites.  Music labels have always treated their artist Web sites as marketing brochures for new album releases.  Rather than taking advantage of a direct to consumer connection that could deliver revenue from direct sales of music content, advertising, sponsorship, auctions of unique memorabilia, ongoing engagement with fans, and countless other revenue opportunities, they have simply failed to connect with their audience online. Despite the fact that the “official artist Web site” typically appears first in organic search results, fans spend very little time on most artist Web sites.  Instead they are shuttled off to other media properties, e.g. MySpace,YouTube, or fan run sites, where they have richer opportunities to interact with each other and the music content.  While the music labels do in fact face numerous obstacles in securing all of the rights (because of complicated artist royalty contracts) to generate revenue by using the content online, they often fail to make even a modest attempt to take advantage of the enormous online social energy that propels popular artists.

Nelly is a multi-grammy winning hip-hop artist on a Universal music label.  His official Web site is www.nelly.net.  It is a good example of the typical artist Web site.  It scores moderate to very low on the four measures outlined above:

 nelly_official_11

Popular – While the site is optimized to be the top returned site for organic search for the word “nelly”, many other sites (e.g. YouTube, MySpace, nellyhq, and lastfm) appear just below the top result and offer better content.  Also, other entertainment sites like AOL and Yahoo have bought paid search results that draw fans away from the official site.  Lastly, the site content is not really targeted to the fans that would likely be searching for it.

Useful – If you are a Nelly fan, it is unlikely that you would find any content on this site that would make you want to come back.  It is generic, “official,” promotional content with no special features (behind the scenes, personal interactions with the artist, “bootleg” versions of the songs) that real fans would likely be looking for. 

Accessible – The site does allow users to buy ringtones for mobile devices and subscribe to a basic RSS feed. 

Social – In terms of generating revenue from an online fan base, this site is a total failure.  Fans who click on community are shuttled off to myspace.  There is no opportunity for fans to upload photos or videos from concerts.  There isn’t even an opportunity for basic fan interaction.  While the site apparently is generating some add revenue, it does little to engage fans to stay on the site or to ever come back.  Conversely, the two sites below are both aggregating an audience based on nelly’s content and monetizing the audience much more aggressively with direct commerce opportunities, numerous advertisements, and offers to join communities of users with like interests.

nelly_headquarters_22

nelly_lastfm_3

$$$
Universal Music has abdicated the energized network of online fans to a multitude of unaffiliated sites.  While music labels have historically generated revenue by earning royalties on the sales of recorded music, they certainly have the opportunity to gain more rights from artists by creating immersive music experiences for their fans.  Instead of taking advantage of their relationship with and unique access to their artists to create a deluge of fresh, “meta” content online, music labels have resorted to keeping their official sites as anemic online marketing brochures.

MLB Advanced Media (www.mlb.com) - While there are thousands of fan sites and sports sites, MLB.com is undisputed premier site for baseball.  It is the opposite of the official artist Web sites most music labels develop.  Major League Baseball has been extremely aggressive in monetizing its content online, transforming what was once printed pages of scores and sports stories controlled by hundreds of physical media newspapers into a bonanza of advertising, auction, gaming, merchandise, and subscription revenue.  It gets high scores in all respects:

mlb_4

Popular - The site is optimized to be the top returned site for organic search for the word “baseball” or any professional baseball team on major search engines.  It almost always is one of the top 3 choices for player names as well.  It either advertises on or has affiliate relationships with other top baseball or related content sites like baseball.com.  Registration for any feature is easy.  All that is required is an e-mail address and a password. Yet, the site is establishing opportunities to learn more and more about its users over time as people flesh out their profiles as they participate in games, contests, and sign up for additional services.

Useful - If you are a baseball fan, this site has everything baseball related that you could possibly want to consume.  It is completely immersive.  Team sites, player sites, online games, auctions, subscriptions to streaming video, tickets, history, stats, blogs, forums, etc; It is hard to imagine what other kind of content they could add.  The content is active.  Users of the site have a plethora of opportunities to interact with the content.  They can play any number of fantasy sports games, some of which offer opportunities to stay engaged for a whole season, others which offer faster gratification, asking users to compete on the basis of their ability to pick streaks (e.g. winning, hitting, stealing, etc.) 

Accessible – The site allows users to deliver the content to any device.  It has numerous mobile offerings.  Users can also subscribe to RSS feeds by team or for the whole league.

Social – MLB.com has truly exploited the social nature of its entertainment content.  The fantasy sports games are an excellent example of an online social networking revenue opportunity.  Commodity data is used as the basis to bring fans together to compete in fantasy leagues.  These games increase engagement, impressions, repeat visits, duration of visit, and switching costs to competitive sites.  While fantasy sports is perhaps the best example of a social application based on content, the site also seeks to build community through more common approaches such as blogsmessage boards, and forums.

$$$
MLB.com uses its content to aggregate an audience and generate revenue through many mechanisms: direct sales of merchandise, auctions, advertising, sponsorships, subscriptions, and ticket sales.  While not all of these opportunities are directly related to online social networks, the users of the site and their ability to interact with each other and the content are what make it successful and differentiate it from static print-based publications and many online versions of traditional media.  Also, instead of giving its content away and allowing a plethora of 3rd party sites and superfans to monetize its assets, MLB.com has taken an aggressive approach to be the best place to immerse oneself in baseball and get the most unique, exclusive access to players and memorabilia.

BusinessWeek(www.businessweek.com) - BusinessWeek is a traditional print publication that targets a general business audience and has developed an effective online version of its publication.  It is filled with breaking AP stories, proprietary news stories and commentary and is suffering from the same decline in revenue that most traditional publishers are facing.  In 2008, BusinessWeek launched Business Exchange, pithily marketed with the tag line, “Track and share business stories across the Web.”  The Web site allows users to “create business topics, collaboratively aggregate content from the entire Web and connect with other business focused users around these topics.”  It is a great tool for business users to research and/or stay current on business trends that are important to them.  The tool is easy to use and seamlessly integrated with LinkedIn.  While the service is still new, I think that it has the potential to truly differentiate and potentially transform BusinessWeek.

business-exchange_5

Popular – Business Exchange is presented to users as a tab off the home page.  It is unlikely that non-BusinessWeek users will find it because it has not really established itself as a “destination site” yet and it is unlikely that users will start searching for it.  The popularity of the site could be significantly enhanced with some marketing and PR.   Still, activity on the site is certainly respectable, and any curious business person could easily lose themselves browsing through the many user-generated blogs and stories that are posted there.

Useful – The site offers a lot of utility.  In fact, in my opinion, it notably beats search engines for getting up to speed about new issues or tracking new stories about chosen topics.  It is also provides integrated, contextually relevant opportunities to network with other users and find potential thought partners, new employees, or prospects in a targeted way.  The site has the opportunity to add twitter like capabilities in the future that might add to its overall utility.

Accessible – User profiles are seamlessly integrated with LinkedIn.  This makes it easier to sign up and start with a well-populated profile.  The LinkedIn integration also sets the right context for users. 

Social – In terms of generating revenue from an online user base, this new service has the potential to really impact BusinessWeek’s success.  The magazine has truly embraced the open, collaborative nature of the Web.  Rather than trying to cling to a strategy of differentiation by content, the site is transforming itself into a useful business tool.  While the BusinessWeek brand and content are still important, Business Exchange recognizes that the vast network of readers may have as much or more content to offer than its own staff of writers and editors.  Also, the service has an opportunity to segment and even publicly “tag” users by their reading behavior in addition to users’ explicit self-ascribed tags and interests.  I hope that this service gets some more press and attention as it is an ambitious step forward for a traditional print publication.

$$$
At the most basic level Business Exchange will help increase revenue by helping the magazine to grow its user base and dramatically increase user engagement and thereby advertising revenue.  As the service evolves and learns more about its users, it will have opportunities to offer additional business service products such as recruiting and marketing services.

Social Networking Revenue Strategies
There are three basic approaches that these companies have pursued or should pursue to generate new revenue.

  1. Transform traditional content sites into tools by embracing the open, collaborative nature of the Web. (http://bx.businessweek.com/)
  2. Aggressively exploit all aspects of your content and your community, paying special attention to meta content opportunities (e.g. baseball stats, behind the scenes artist information), user-generated content (e.g. bootlegs and concert videos), and other forms of user interaction (e.g. games, lists, contests) (www.mlb.com)
  3. Treat highly fragmented media properties (e.g artist Web sites) as a network.  By aggregating the audiences of smaller sites, companies have an opportunity to increase potential advertising and commerce revenue.

submitted by Ken Allard

Many organizations are struggling to understand why they should care about online social networks. They narrowly define them as blogs and message boards and dismiss both their relevance and their potential to generate new revenue. I believe that by failing to directly develop initiatives related to community many companies are missing opportunities to take advantage of the inherent network benefits that online services can offer.

Here are five qualifying questions that companies should ask themselves to see if they have an opportunity to generate revenue by fostering the growth of an online social network:

  1. Do you act as a broker of goods or services?

  2. Do you provide content or advice to a significant percentage of a specific industry or consumer segment?

  3. Are you facing new competitors who generate revenue by aggregating audience around your content or by providing meta-content?

  4. Do you have data or knowledge within your organization that is obscure to your clients?

  5. Do you serve an audience that is highly fragmented?

Any company that answers yes to any of these questions may have an opportunity grow their revenue. In this blog series, I will explore each of these questions and provide case study examples of organizations that have the potential to launch profitable social networking initiatives or those that already have them in place.

Let’s start with the first two questions:

  1. Do you act as a broker of goods or services?

  2. Do you provide content or advice to a significant percentage of a specific industry or consumer segment?

Companies that can answer yes to either or both of these questions have perhaps the richest opportunity to profit from social networking. Fortunately, a wide variety of organizations fit into this category. Let’s look at four different examples:

Wine Spectator – Wine spectator has an offline paid subscriber magazine that includes access to a Website. The magazine’s content includes stories about wine trends, wine auctions, experiences, travel, food, and other lifestyle content. Perhaps the most valuable content that the magazine provides is its expert ratings and tasting notes about wine. Wine Spectator’s wine experts are so respected and revered that their ratings immediately affect the price and the availability of wine.

While the offline magazine is interesting and a useful wine guide, the Web site has transformed the value of the publication. First it is a database of all the tasting notes and ratings for every wine that the magazine has evaluated. Hence, anyone looking for a review of a specific wine before making a purchase, has immediate access to an expert rating that provides valuable information and pricing guidance. If you haven’t yet figured this out, I am a huge wine enthusiast). The Web site takes this benefit a huge step forward, however, by enhancing the recommendations of their experts with the opinions of the entire Wine Spectator community. The Web site also allows each member to build an online inventory of their own wine collection with their own tasting notes and ratings which they can share with all other members.

Wine Spectator Personal Wine Inventory

Member Wine Tasting Notes

$$$

Thus, the publication has greatly expanded the content available to all members and has significantly increased the utility of the Web site. Members share their own entertaining stories about their wine experiences with each bottle, what food they served with it, and their own perspectives about the quality of the wine. This social feature increases the revenue of the site by increasing page impressions (i.e. advertising revenue), engagement, and subscription stickiness. While I do not have access to any proprietary information, I am certain that the renewal rate for members who have entered their entire wine collection online is significantly higher than that of those who are passive readers.

Consumer Reports – Consumer Reports is an enormously respected magazine and Web site, published by the non-profit organization Consumers Union. This organization has been helping consumers make smarter purchases for decades and provides a valuable public protection and public advocacy service. Consumer Reports ratings and rankings of products are distinguished from any other source in that they are independent, objective, and scientific. The organization tests each product with sound, consistent methodologies. (The facilities are amazing. If you are ever in Yonkers, contact the organization to see if you can get a tour of the testing facilities. It is a fascinating experience).

The organization is serious about its mission and the scientific nature of its ratings. Thus, it has chosen to limit and often exclude the product opinions of its readers. Subscribers to the Web site may go to separate forums to discuss product quality, but unlike Wine Spectator or other sites like Amazon.com, member opinions and reviews are not integrated into specific product ratings.

$$$

I believe that the organization is missing an opportunity to increase engagement, page views, and subscription renewals, by limiting the ability of consumers to learn from each other and to participate in the process of evaluating products. On the Web, people want to participate. They want sites to offer utility, convenience, and an integrated experience. Sometimes brands and policies need to evolve to remain relevant.

Reed Construction – Reed Construction is a business to business service that offers content to the entire construction industry, including contractors, architects, and product companies. Contractors and other suppliers seeking work or new sales can gain access to a database of new projects, building plans, and building specifications. This is a high value, premium content service, with paid subscriptions being the primary source of revenue. Reed, however, is failing to address a large part of the potential subscriber market.

$$$

Reed is a kind of non-traditional broker of goods and services. While not directly enabling a transaction between two parties, their information is directly facilitating a transaction. Currently, Reed only provides content to one half of the purchasing dynamic, the suppliers. With the power of a proprietary social network, Reed could also provide information and advice to the businesses and developers who are seeking products and services. By developing some simple Web applications, data capture standards, and analytical frameworks, Reed could rate, rank, and categorize all suppliers of goods and services, relying largely on outcomes data gathered from the developers. Like Amazon and E-bay do with their networks of consumers and independent sellers, Reed has the opportunity to use the social network of professional developers who may be geographically dispersed but who share a common set of experiences with products and service providers to gather outcomes and ratings data that can be valuable in making future purchasing decisions. By failing to monetize their true network, Reed is leaving at least half of the potential market unserved.

Hamptons Real Estate Online – Hamptons Real Estate Online is the leading source of listings information for anyone looking to buy or rent a house on the east end of Long Island. It is not all that different from any other real estate site except that it is not specific to any specific broker and it offers and extremely easy to use interface and set of search and browse utilities. It is also a little different in that it serves a very specific regional community and its database of rentals and properties for sale is quite comprehensive. In effect, it is the one place to go to for this information. The site makes money by collecting listing fees. It is essentially a new form of a newspaper classifieds.

$$$

Hamptons Real Estate Online is missing a revenue opportunity by failing to fully recognize that it is serving a distinct community. The collection of towns and villages that comprise the Hamptons is essentially a large, linked resort community. People buy and sell houses repeatedly. They often rent a different property every year. Real Estate is a hobby of sorts and the mass of people that returns to the Hamptons each year needs services that are specific to their property rentals or purchases. Yet, the Web site (unlike others that cater to a people seeking information about rentals, e.g. www.vacationrentals.com) does not capture any feedback from previous renters about the quality of the property. It also does not present any advertising or classified information about the services that renters or new home buyers often need such as cleaning, landscaping, pool service, or contractors. Essentially, the site is failing to monetize its community. The site could also greatly add utility to its site by presenting additional information about the homes that are listed (e.g. previous sale price and ownership history all of which is publicly available but fragmented) and allowing users to register and maintain information.

Three Basic Social Networking Strategies

There are three basic approaches that these companies have pursued or should pursue to generate new revenue.

  1. Add value to existing content by gaining audience feedback or additional user-generated content. (e.g. Wine Spectator)
  2. Capture data about how your community interacts with its suppliers or service providers and about the transaction itself to inform or advise future product development, marketing, or purchasing decisions. (Hamptons Real Estate Online, Reed Construction )
  3. Add content to your offering to extend your services beyond your core service. (Consumer Reports)

In the next post in this series I will address opportunities related to question number three:

3.  Are you facing new competitors who generate revenue by aggregating audience around your content or by providing meta-content?