3 min read

What is the ecommerce evolution?

By Rusty Zosel on Mon, Jun 20, 2011 @ 09:30 AM

Actually, for me, eCommerce Evolution is an exciting concept, because behind the scenes of the implementation of emerging technologies in commerce, a mutually-beneficial relationship is materializing between the Buyer and the Vendor. At Procurement Partners, we view the eCommerce Evolution in two ways: the buyer-vendor relationship and the technologies employed. We strongly believe that both go hand in hand, that each has influenced the other and continues to do so.

The Buyer – Vendor Relationship: A Continuum

Maybe this is a stretch, but like Maslow’s hierarchy of needs leading to a person’s “self-actualization,” we can place the Buyer – Vendor relationship along a similar continuum measured by a level of trust, cooperation, and mutual support.

eCommerce_Evolution-resized-600

Like me, I’m sure you have experienced these relationships yourself. At the extreme left (no political implications intended) is “Antagonistic Antipathy” where the relationship, if that is what you can call it, is one of distrust. Usually, there is no other alternative for one or both parties and where levels of customer service are low, communication practically non-existent (except to complain), and invoice payment intermittent. It’s a high-maintenance relationship for both parties with little return on the investment of time and money.

Next along the continuum is what I like to call, “Benevolent Condescension.” It’s likely not too far away from Antipathy where distrust still exists, where each party views the relationship as a means to an exclusive end, where each seeks its own self-interests, and unsatisfactory service and product quality is a tolerable trade-off for meeting sales and financial objectives.

However, as we journey further to the right, we arrive at the “Cautiously Cooperative” relationship. At this point, both parties acknowledge that a win-win is entirely possible and begin to share mutual goals. Buyers and Vendors are able to communicate, because many barriers to communication have been overcome. Each acknowledges that benefits exist in helping the other.

Ultimately, at the far right, a “Patronizing  Partnership” develops in which an open and free-flowing level of communication exists. At this point both parties have established and maintained a trust based on shared values and consistency in living up to negotiated standards of performance. For this to happen not only must both parties be willing, they must also have the tools to maintain this partnership – the tools of technology.

The Emergence of eCommerce

However you describe it today, eCommerce, eProcurement, Procurement Automation - eCommerce has profoundly impacted not only business practices, but the Buyer – Vendor relationship as well. eCommerce has been defined as:

Electronic commerce, commonly known as e-commerce consists of the development, promotion, buying and selling, delivering, servicing, and tracking of products or services over electronic systems such as the Internet and other computer networks. Since 1990, the amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. eCommerce has ignited “innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. ” Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies, such as e-mail, mobile devices, and telephones as well.

Indeed. Technology has opened up unprecedented opportunities for two-way communication and transaction transparency. However, with all the progress made, commerce is still not fully automated nor the loop completely closed. In many cases, what technology offers and what is adopted by Buyers and Vendors are not at pace one with another. For example, a Buyer may be able to complete on-line purchase order forms, but may then have to fax or email the POs to the Vendor, or if they are using a 3rd party eCommerce provider – the 3rd party may actually be faxing orders to the Vendor.  It’s hard to believe, but it happens! Furthermore, if there is a 3rd party eCommerce provider, they may not be fully integrated – or correctly integrated into their Vendor partners.  Thus causing operational challenges with the supply chain and moving back down the path towards antagonistic antipathy.

Why is this? Well, in some cases, not all parties trust technology and eCommerce practices. In others, either the Buyer or the Vendor finds a spirit of true partnership and communication suspect.

Making eCommerce Evolution Possible

I’m confident, however, that eCommerce will evolve. For this to happen, Buyers and Vendors alike must trust:
1. Each other through communication and consistency in services, processes, and meeting commitments
2. And implement technologies and innovations which will help them achieve the above and further refine their practices and reach their goals.

Do you agree? Let me know what you think? In what form would you like to see eCommerce evolve?

Rusty Zosel
CEO
Procurement Partners, LLC

Topics: Procurement Automation eCommerce eProcurement eCommerce Evolution