Hvac e-Business, Version 2000 (December 2000)
Speaking literally, as of November 6, 2000, the site was still unoccupied (i.e., no site, no nothing). But to get the larger picture, let's recap: when my December 1999 article asked "Where is hvac.com?" apparently nobody cared. Back then, we talked about e-commerce, business process reengineering, and why the Web works for the hvac industry. The "basic" impression I was trying to leave you with then was, "Get on the Web."
Since then, some have done exactly that. Today, several hvac-related businesses prosper on the Web. Most notable are HVACindustry.com and HVAConline.com. Both have gone through the rigors to get their sites to where they are now, and both offer a significant amount of features to keep you coming back again and again. In addition, HVACindustry.com recently launched HVAC Auction to go along with HVAC Mart, which was launched several weeks prior. HVAConline.com just had a huge makeover after being gobbled up by BuildNet.
Never before in the history of commerce have we had such good data on how markets behave. This is made possible by a 24-hour-a-day matrix called the Internet. The Internet is the mother of all looking-glasses, overcoming one of the vexing limitations to market transparency: geography. You now have the power to do most anything.
That said, now is as good of a time as any to focus on what's next in the hectic and unpredictable world of the Internet and, more specifically, e-business. As for technology, believe it or not, it's going to get better. Improved software. Improved integration. Improved processes. The Web is allowing us to expand into areas we never dreamed possible. What does it have in store for the world of hvac? Let's find out.
Gary's Theory Of EvolutionWhat e-business means today is drastically different than what it meant even only a year ago. E-business today involves all aspects of a business. It takes product and information on a vast and synergistic ride through the supply chain. From the influencer to the buyer, e-business covers it all. A recent Gartner report stated that we may be performing e-business activities as a strategic initiative well beyond 2007. At that time, e-business will hopefully just become "business."
Today, the primary focus of companies is in making the transition to e-businesses. To make this transition, companies are adding Web initiatives onto regular operational practices, or spinning off new and separate Web-related businesses. A company becomes a true e-business only when its business processes and model become fully integrated with Internet technologies. Companies need to reinvent business processes and workflows with the Internet in mind, and people need to learn how to adapt these newly formed ways of conducting business. This will take time. The brunt of your operational shift will involve e-commerce.
The brunt of e-business activity is happening in the business-to-business (B2B) sector as forecasted. Over the next 12 months, nearly half of domestic brick and mortar organizations will embrace e-commerce and other B2B transactions on some level. Almost 70% will by late 2002. For those of you unfamiliar with the difference between B2B and the more commonly heard B2C, I've provided a comparative list (Table 1) defining the main characteristics between B2B and B2C orders.
Most B2B companies now perceive the Internet as an extension of their business. Sixty-one percent said their primary effort was to enhance existing relationships, as opposed to creating new relationships, and 42% said the biggest benefit of their Web initiatives was to service existing customers. Forty percent indicated that the biggest benefit was increased revenues. Even I can't argue with that.
e-hvac & e-Constructione-business will affect many industries the same way. Hvac is now and has always been primed for rapid growth. Estimates from various research firms predict that the value of worldwide B2B e-commerce will grow to between $1.2 trillion and $10 trillion by 2003. Close to a quarter of that may come from the construction sector alone. With the FMI recently announcing that construction will increase by 5% in 2001, this should be no big surprise. The same goes for hvac.
With old-world methodologies and technologies in place, the hvac market is a breeding ground for growth. Think of how many small hvac manufacturers and service companies comprise the industry as a whole, most with antiquated data systems (if any at all). That is prime real estate for the average e-business plan.
Anyone who handwrites a PO, a specification, an RFP, or even a blueprint, is a perfect candidate for what e-business has to offer. The reason being, many of these businesses have no preconfigured electronic baggage such as EDI- (Electronic Data Interchange) based ordering systems or proprietary software packages tying them down. For them it's simply drop the pen, and start buying stuff off the Net. The Internet's global reach is the cause of this simple shift. Nothing to install, simple to learn, yet the basic concepts of the Internet have still gone unrealized for many businesses in this country.
The engineering sector is one of those odd "hard to put your finger on" sort of things when you try to equate it to e-business. The engineering field typically has no direct impact on ROI for the average brick and mortar business. That is unless of course, you are an engineering firm where your services are how you make your money. In the manufacturing field, however, the engineer is the spec provider, the man or woman who influences the decisions of contractors or facility maintenance folk. You don't buy. You don't sell. You probably don't even eat. But you love information, detailed information, and e-business is the catalyst for just this sort of thing.
The Virtual EngineerDeveloping a strategy for the engineering portion of your business is kind of like developing a strategy for a loss leader. How do you cater to something that won't make you money?
The answer is solutions. Lots of solutions. Today, it's not just about selling product. It's about selling solutions. If someone asks the question, "Why do I want to do business with you?" Your answer could be, "Well, because we offer a strategy that supports personalized growth for both the business and our customers. We do this through a highly effective Internet sales program where you can build a custom RTU online, buy the RTU online, and then mix-and-match particular service agreements online to handle the long-term maintenance of the RTU. Long term, we look to develop personalized marketing programs that will help you specify and buy the right product at the right time."
Now that's a solution. One-stop-shopping is the wave. Consolidation will make sure of that. You see, in this world, it's all about content and then using that content to provide a 360-degree platform of interacting applications.
What? You have no content, you say? Have you made a trip into that old storage closet recently? Odds are there's a boatload of highly defined and useful information sitting back there that is just waiting to get on the Internet. Use that information to entice customers to be a part of your community. Make them feel invited. For most, this should be a privilege. Give a little away for free to get them in, and then save the heavy stuff (like how to build an air handler in five minutes) for when you get them registered and into your community. Then use the information gained from your customers' online experience to personalize more directly their outing the next time they come back.
The typical engineer unfortunately requires a little something more than a just list of Internet terms on your site. They require tools. Engineers like funky things to get their hands on. Why? They're engineers. Give them tactical tools to help them do their jobs better, and watch them go from specifying your product to promoting your website. Create a separate strategy for your engineering group. Devise a way to implement that piece of the business into your general operations. If done correctly, the customer sees only the seamless integration of specification, approval, purchase, and installation.
Suddenly, the specifier or engineer has become an integral part of the business cycle. They have been pulled into the buying community as a value-add. In addition to what has already been mentioned, try to consider this. There are a multitude of cross-sell and up-sell opportunities within the typical business cycle. If the engineering side becomes a part of this cycle in some sort of an automated form, think of all the opportunities your organization will have to push new products and information to your customers. This is done through technology, technology that does a lot of the administrative "stuff" for you, technology that works to make the lives of your customers more manageable. Get it?
Choosing The Right StuffInternet strategies need to be combined with the full range of business automation. Most companies choose to do this from an enterprise perspective, or in-house. Much of the work in the technology industry is focused on integrating e-commerce software applications with in-house back office automation, such as Enterprise Resource Planning (ERP) systems, Customer Relationship Management (CRM), Supply Chain Management (SCM), and other business process software.
Internet commerce is the final piece of the puzzle that brings the entire picture of business automation into clear focus. Only when you combine pre-existing ERP systems, business warehouses packed with customer data, knowledge bases, and other workplace-style front-end solutions, does the term "e-business' really start to manifest itself into something quite grand. Technology and software is the key to all of this.
The most important acronym you can know about today is CRM. CRM is the electronic culmination of everything involved in your business from a customer viewpoint. But CRM has an even broader meaning to some.
In many ways, it's an umbrella term for all kinds of software that manages customer contacts, including sales, customer service, and marketing. And not just for one division or one channel. When you launch CRM, you cater to all sales, all engineering teams, all service groups, all of marketing, and all business channels. This is not and cannot be a solo approach. As an example, CRM helps you tie together online ordering with, let's say, a custom online hvac design program. How? Think about it from a technology standpoint.
Someone cruises through your online, split-system design center. They love the product so much, they want to buy it. Well, it just so happens that this third-party-built program has a direct link into the company's proprietary software and business environment where it can automatically add the item to a shopping cart and then even check availability on complementary products and services. Cool, huh?
And that's only the beginning. Some of the top software companies in the world are knocking cerebellums trying to come up with ways to integrate their popular systems with each other. Popular CRM programs are made available by companies such as Siebel, Oracle, and SAP. Siebel is the best as they own CRM. And for those not familiar with these highly involved applications, beware of sticker shock. Simply put, we're talking potentially millions. That, I'm sure you get. This is one of the problems with CRM. Coupled with the issue of time, CRM can take months to implement and cost millions in development costs.
"Well, Gary, what do I do if I don't have millions to spend on CRM and only two months to launch?"
What a great question!
Getting Plugged InMany of you will take the ASP road. ASP, or Application Service Provider, is a unique way to integrate what I like to call "instant CRM." In essence, it's your ability to outsource your IT department. Using an ASP model, companies can launch an intuitive, Web-interfaced CRM solution to address targeted audiences, short-term demands (product recalls, special offers, etc.), and other needs that often fall outside the scope of an enterprise CRM solution.
ASP's can provide quality customer experiences for a fraction of in-house CRM costs. Many ASP's can handle only a portion of what you're looking for. But many handle the whole kit-and-caboodle, from site hosting, to site development, consulting, and marketing. Knowing full well that your core competency is not maintaining a $5 million-plus per year IT department, ASP-styled organizations take care of the techie-laden stuff for you. That leaves you to do what you do best: sell hvac products and services. Just remember that you own the info these ASP companies get for you. Maintain that in-house and keep profiles of your customer base on the side.
When trying to implement a CRM and similar-type solutions, your main goal is to get personal. No, that doesn't mean you should start asking your customers about their salary or what their eating habits are. When you get personal on the Web, it's your ability to make a "home" or portal for your customers based on who they are and what you know about them.
Role-based portals are currently the more popular version of this methodology. With the right software, you can create personalized communities that cater to the role or occupation of the customer visiting. If it's an engineer, you may only show technical specifications or provide interactive calculation-based programs. If it's a facility guy or gal, you may provide online maintenance management tools or service schedules. If it's a buyer, you'll provide online order status, product availability, and an online store.
Each portal is separated by a customer profile that says "you get this, and you get this." Yes, it sounds simple, but it's not. Profile building is (at least in my mind) the single hardest thing to do on the Web. It requires so much maintenance and a lot of work to perfect. A role-based portal will eventually assimilate itself magically into what's become known as one-to-one marketing. If you thought role-based portals were hard to keep-up with, one-to-one marketing is a logistical nightmare. Still a "vision" more than anything else, one-to-one marketing is achieved and has proved effective when you can finally say, "I know my customer. I know what his buying habits are, I know when he buys, what he buys, what his/her hair color is, and whether or not they like McDonald's or Burger King." Like I said, a vision at best. But once one-to-one marketing becomes reality, look out.
The wireless world with its pervasive devices is considered by many to be the next great thing to affect business. And unlike land-based CRM systems, the wireless kinds are far more capable of transcending everything we know about the workplace, both internally and externally. By 2005, over 2 billion wireless subscriptions will be fulfilled worldwide, as compared to 500 million today.
Wireless WondersThe future of wireless can be seen in the Ericsson R380s and Motorola V3682 wireless Web phones. They have it all: Wireless Application Protocol (WAP) access, PDA like functions, e-mail, and (oh, yeah) they're also telephones.
Some companies like E.piphany have recently announced that they're adding wireless support to their E.5 System CRM technology. Portions of this system, such as the E.piphany portal, will be available on Palm and Pocket PC PDA's with microbrowsers, as well as cellular phones. With this system, E.piphany will give users remote access to up-to-date customer data and allow important transactions to be conducted immediately. This includes not only purchases, but also customized product selection programs and configurators for the engineering field.
If it can be programmed via a landline, you can program it for wireless. Just sending an e-mail is not that exciting anymore. Technology companies are allowing users to become far more self-sufficient in everything they do, and I am a firm believer that the wireless sector is where it's at. With the exception of actually implanting a microchip in my head and sending messages by just thinking about them, going wireless is the end-all and be-all of technological existence. It will be quite a while before something so fantastic breaks through yet another paradigm.
Who Ya Gonna Call?So let's actually say you pitch this whole thing to your boss, and he or she says, "Sounds great, let's do it!" Now what do you do? Well, I'm going to wax political for a second, so try not to doze off.
When implementing the kinds of technologies mentioned here, you have to start getting a few groups involved. This is not easy, but it must be done. To do this right involves executive management approval. If you don't get this, you're dead even before you get started. And with that, here's three ways of knowing if you're dead even before you get started: 3) Your company president keeps referring to e-business as "that thing;" 2) Upper management is curious as to whether or not retinal-scan technology is possible on the Web; And 1) You're given one week to launch CRM because the president wants it to coincide with the company picnic.
Oddly enough, comments like these are not that far from the truth. You see, by implementing a project like this, you open up the door to a whole host of governance issues that will wreak havoc on your organization unless handled properly. The following should take care of that.
The first step is to build the strategy for your e-business initiatives. This process should involve the business only. If you're a big firm, hire a consultant. If you're a small firm, figure it out yourself. Once you have your strategy, get together with the IT wizards and try to hash out a plan that says whether you take this project in-house or you outsource. Next is software selection. This involves both the biz and IT. Start interviewing a bunch of potential vendors and choose the one that will best meet your businesses needs, both from a sales and marketing and technology perspective.
Learn It On The WebHow do you become a better engineer, a better salesperson, a better prep cook, if you don't know everything? You learn. And fortunately for you, learning has also taken the high road to the Web. E-learning or distance learning is surging largely on the strength of advances in networking and Web technologies, collaboration software, multimedia, content management systems, and other required tools for educational and training applications.
As more and more people become pressed for time, e-learning will rise to the forefront allowing 24-hr access to training services offered by many of the world's largest and most respected companies. E-learning's greatest attribute is its flexible delivery. Most prominently available in an individual/self-paced format, e-learning can also be pushed to groups in a synchronous or asynchronous style. Web-broadcasts, online presentations and lectures, and personal classes with peer-to-peer chat ability are all happening today. Next time you have no time to spend three days at some boring seminar, hop online and see it in two hours. I have. I was even able to take a nap right in the middle of it.
Consulting The Crystal BallToday, we have several outstanding breakthroughs that are finally getting the attention they deserve. These technologies are familiar to most. Java, DSL, cable modems, and voice-over IP. By 2003, nearly 10 million U.S. businesses will be connected to the Internet, with more than 1 million of those businesses using DSL connections.
Java is becoming a powerhouse language for many CRM-based outfits because of its scalable and Web-friendly architecture. Java has a found a home with such companies as SAP and their e-business initiative known as mySAP.com. The shift to an all Linux operating system is making strides, as is the increasingly popular XML (extensible markup language). Have you seen those Agilent commercials for optical networking and bubble technology? Kind of like broadband on steroids, optical networking has the ability to bulk multiple application processing into a single transfer run. This is not multi-tasking, it's "multi-apping." Very involved, and I don't even understand it myself. But it sure sounds neat.
In the next two to five years, I see natural language applications combined with content retrieval advances and speech recognition enabling your organization to better manage and interact with various forms of content (such as text, audio, and video).
In the next five to 10 years, things such as security and privacy issues, which plague us heavily today, should get resolved. Expect to see technologies such as digital certificates merge with biometric and smart-card technologies. This will create a situation where we can better address security issues by authenticating individuals using unique parameters. In addition, you'll start hearing terms like, e-cash, e-wallets, and online currency more often. The trouble I see in enabling these kinds of technologies is the global monetary policy issues.
In more than 10 years, I see microchips being implanted into our brains ... just kidding. Actually, I do see some pretty cool things happening. We should see the further advancement of quantum computing and synthetic characters (e-mail me to find out what this actually means) come into play. Maybe then I'll trade in my 350 Mhz Gateway. Maybe.
Closing StatementsTake notice of the things mentioned in this article. They are happening around you, with or without your taking notice, and they are going to continue to happen and affect several facets of your life. However, it's nice to see such groups like CBI giving seminars on CRM, as it did last October.
The tipping point is approaching shortly. I feel that sooner than later most of you will get it and I can stop writing about this stuff. But until then, I gladly accept any questions or comments you may have in regards to anything mentioned or not mentioned. And to help you develop your one-to-one marketing database, I like Burger King.
Feel free to e-mail me at firstname.lastname@example.org. Finally, take comfort in knowing that this crazy world will only accept as much as it can, so don't feel lost, and don't feel out of touch. Because when push comes to shove and the lights go down in the city, e-business is just business. See you on the other side. ES
For more information on any or all of the technologies mentioned in this article, please visit the following websites.www.crmdaily.com