From Wall Street to Main Street, people are aware of the dot-com meltdown and the spectacular underachievement of the promises of the “New Economy” that were so widely heralded only a few short years ago. Today, we are all justifiably more cautious about putting time or resources into an Internet endeavor.

However, despite what has been reported in the media, the news hasn't been all bad. In fact, on the business-to-business front, the development of Internet-driven/Internet-based e-business has been generally positive. According to e-business industry analyst International Development Corporation (IDC), business-to-business accounted for 80 percent of all Internet revenue in 2000, and IDC projects that the percentage will rise to 86 percent, or more than $4.3 trillion by 2005 (Business Day, 10/31/01). IDC adds that nearly half of all U.S. e-business websites are now profitable, and many of these are run by brick-and-mortar businesses that have learned how to leverage the Web.

The message is clear. If you are not already building an e-business capability, you will have to build it in the near future. Your customers will demand it and the marketplace will require it.

If you doubt the value or potential growth of importance of e-business, just consider the simplest element of an e-business capability—e-mail. The first person with e-mail probably did not find it a very useful tool. Gradually, as more and more people acquired e-mail capability, e-mail became more and more useful.

Today, e-mail is a basic component of our business and it would be considered a major disadvantage not to have e-mail capability. Similarly, Internet-based e-business capabilities are rapidly moving toward becoming a business necessity. Poll your customers and you will find that a sizable percentage are already interacting with at least one supplier using e-business tools. They may even be reaching out to your suppliers' Web applications for information and solutions.

Why E-Business? Why Now?
A successful e-business strategy can help you strengthen your competitive position. It may be designed to attract new customers, or to improve your relationship with current customers. It may be used to increase the reach and effectiveness of your sales force, or to reduce the cost of doing business by electronically automating redundancies and reducing paperwork. Or it may do all of the these.

The good news is that you don't have to spend a lot of money or struggle through an extended learning curve to adopt an e-business strategy. Today it is possible for you to take advantage of what others have learned and seek partners who are willing and able to share their expertise with you. Distributors do not need to “go it alone.”

You can take well-calculated, well-planned steps to address specific customer needs and marketplace opportunities while keeping your Internet spending under control and in line with strategic objectives.

What Kind of E-business Program Do You Need?
All customers' needs are not the same. A one-size-fits-all approach will not produce the desired result, so you should tailor your approach to reach groups of customers with different needs.

Adopt an e-business strategy that mirrors your strengths. In general, distributors are good at listening to what customers want, identifying niche markets to exploit, providing value-added services, and repackaging products and services that their suppliers have to offer. These strengths play well in developing an effective e-business strategy.

The best way to begin building your e-business offering is to start simply, implementing one element at a time, gaining confidence and credibility as you add capability. In our company, we began by using basic protocols such as Electronic Data Interchange (EDI), an extensible mark-up language (XML) to move information to our customers such as purchase orders and invoices over the Internet in a mutually understandable format. At the same time, we began to include more relevant customer information on our customer-facing websites. Today we offer various customer groups a wide range of online procurement, cylinder management, telemetry, self-service and collaborative services using a multitude of mediums including Web Portal, online exchanges and system-to-system integration.

Every business should start with one of the simplest e-business tools: a well-designed, easy-to-navigate, customer-focused website. You may already have such a site, one that presents your products, capabilities, corporate background and contact information in clear, concise terms. The Sidebar, “Steps to E-business Success” provides suggestions for developing an effective website. Don't forget to promote the site to existing and prospective customers.

Then consult with your customers to determine the next step. Are they interested in being able to make purchases online? Would they like automated, electronic order-to-cash management capability to achieve savings in supply chain management? Or are they more concerned with being able to track inventory by internal cost center? Would they like automatic delivery schedule to guard against runout? All of these things are possible through e-business.

Once you have a clear understanding of which e-business services would best meet your customers' needs, you are ready to take the next, critical, step—choosing a partner. The learning curve is steep, and can only be shortened by collaborating with those who have the experience and capability to implement the services you need at a cost you can afford. A partner that understands your business as well as e-business can implement programs that meet your customers' needs without a long lead-in time. Partnering will enable you to employ a strategic niche-marketing plan, as well as leveraging pre-existing e-business programs.

For example, if you wanted to implement online ordering, supported by a complete Internet-based order-to-cash management system, a qualified partner could plug you into an already established, de-bugged program running over its servers, and managed and supported by its technicians. A partner can offer a complete turnkey operation that gets you into the e-business game without a major investment in time, capital or personnel.

Where to Look for a Partner
Choosing the right partner may be the most important e-business decision you will ever make. But the good news is that there's no need to wander far and wide looking for e-business partners. You'll find the best candidates right in your own backyard. I'm referring to your suppliers who already have robust e-business capabilities and are willing to partner with you in the development of your e-business program.

Look for partners who will share experiences, insights, information and infrastructure with you. Be sure that these partners are willing to support your entire product line. Just as it is not practical for a distributor to manufacture his or her own welding equipment, neither is it practical or profitable for a distributor to invest in multiple Web servers and expert computer programmers in an attempt to replicate what others have the knowledge and resources to do more efficiently and economically.

Ultimately, the winners will be those who clearly define their e-business objectives, set realistic goals, develop a practical strategy and contract with the right partner.