the basics of back-end integration

May 01, 1999 9:30 PM  By

Several years ago, before the explosion in Internet commerce, many companies created a basic home page, put it on the Web, and that was the end of their online activity. But today, a simple home page no longer suffices. You must commerce-enable your Website-in other words, be able to sell product via your site.

And since a goal of a commerce-enabled Website is to provide a shopping experience that’s as smooth and transparent as going to a bricks-and-mortar store or placing an order over the phone, you should never view your electronic commerce applications as an isolated sales channel. Instead, your Website should be coordinated with your traditional back-end systems. In an ideal world, you’ll want to implement a full, seamless integration between the two systems.

But it can be expensive. To completely integrate a Website with an existing catalog order entry system can cost $500,000-$5 million. This includes the software that creates the actual Website pages, the shopping basket, and the product search engine, and an electronic data interchange (EDI) system than enables online customers to receive real-time inventory and order status.

Fortunately, you can coordinate Website orders with your back-end even if you don’t have a spare $5 million lying about. For many (if not most) marketers, building a fully functional Website requires a phased approach. Streamlining ordering gradually is not only more affordable, but it also gives you time to become aware of potential problems, which are easier and cheaper to fix when you’re in the earlier stages of integrating your site.

What do we mean by a phased approach?

Phase 1: Sell only a subset of items (one product family) online, and use manual integration. Customers will still be able to order from your site. But you will need to print out the online orders, keypunch each order into your existing back-end system, and then manually enter the ensuing order status into the electronic commerce system. Because you’ll likely be batch-processing the online orders-downloading all of them once a day-orders submitted early in the day aren’t likely to be fulfilled till at least the next morning, which may result in customers receiving their orders later than they expected.

Given the delay in fulfillment, not to mention the man-hours required to input the orders, manual integration is hardly an ideal solution. But this sort of compromise solution is a popular first choice in that it is relatively inexpensive: You can get away with building a manually integrated online catalog for $50,000-$300,000.

Phase 2: Sell your entire product line, and feature limited integration. Limited integration varies depending on your priorities: Do you urgently need the ability to provide customer-specific pricing? A real-time link to customer service? Most likely, your top priority will be to put an end to manually rekeying orders. For $150,000-$300,000, you can buy an EDI system that transmits online orders to your catalog order-entry software.

Phase 3: Implement full integration with existing back-end. At this stage, your system will process and fulfill online orders as effortlessly as orders taken by phone or fax.

But you may wonder why you should bother moving from phase 2 into phase 3. The arguments for building a fully integrated online catalog are too compelling to ignore:

* Up-to-date access. By their very nature, traditional paper catalogs are quickly outdated-often by the time they reach customers’ mailboxes. But when your online catalog is connected to your company’s back-end, you can offer buyers real-time access to stock status and product offerings.

* Improved service. When your Website is linked directly into your back-end, customers will be able to get the answers to stock status and delivery questions online, rather than having to spend time on hold, waiting to speak to a customer service representative. They can place their orders and check order status right from their computers, 24 hours a day, seven days a week. Without this capability, you could lose money on your Internet operation as customers repeatedly phone your call center to check up on their orders.

* Reduced costs. With a fully functional online catalog, you may ultimately be able to move the majority of your call volume directly to the Web-everything from product inquiries to order placements to checks on order status. This in turn cuts labor costs and telecommunications charges.

So don’t view integration of your Website and your back-end as a costly fantasy; instead consider it a practical investment that will pay of sooner rather than later.

Given that integrating your Website into your existing back-end can cost up to $5 million, you’re likely wondering what all that money gets you. Below, the basic components of an integrated transaction software system:

* The shopping cart. This is what the customers see when they are shopping online: the pages and forms that allow them to place orders online.

* The transaction engine. “This runs behind the shopping cart and needs to be able to handle hundreds-hopefully thousands-of orders simultaneously,” says Bill Carroll, president/founder of DirectSite Corp., a Cincinnati-based full-service direct marketing provider.

* Inventory hooks. By connecting to your warehouse inventory database, these links enable your transaction engine to confirm in real time whether customers’ orders are available.

* Shipping data links. Similar to the inventory hooks, these components pull up shipping codes from your master database and translate them to online verification of shipping dates. “Without this information and e-mail shipping verification, you’re probably going to be increasing your costs,” Carroll says, “because you’ll be receiving calls about shipping dates.”

* Credit card verification. Your transaction engine must communicate in real time with your credit card processor so that you can authorize credit card transactions “immediately, not two days later,” Carroll notes.