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STRATEGIES: GLOBAL BUSINESS ADVISOR
Think Globally, Act Consistently
Successful globalization lies somewhere between an efficient, centralized infrastructure and a flexible, decentralized mentality.
How can global e-businesses enable decentralized operations with a centralized infrastructure? Let's walk through a hypothetical example to illustrate the requirements. Consider a U.S.-based company we'll call Acme Widgets Inc. Acme has about 2,200 employees, large sales offices in six European countries, and annual revenues of US$600 million.
A longtime manufacturer of backyard lifestyle enhancement products, Acme first built its Web site in 1996. Since then, the company's Web team added basic customer support and product ordering to its original brochureware site. In 1998 the developers replaced their original static HTML-based programming with a database that serves content dynamically. Recently, Acme's developers rolled out a content management system (CMS) that set the company back several hundred thousand dollars, turned on basic personalization, and started exploring an integrated customer relationship management (CRM) solution to support all the company's sales channels.
Meanwhile, Acme's Web developers at its four European subsidiaries have been busy building their own sites for prospects and customers in their home markets. Because they started their projects later than Acme's U.S. team, they're not as far along as dynamic content generation. They've just started thinking about buying a content management system, and while CRM is under discussion, it's somewhere beyond the horizon. Neither their funding nor staff match the U.S. resources. While some countries have dedicated Web teams, Acme's online efforts in smaller markets are a part-time exercise. Nonetheless, Acme's European businesses are anxious to take advantage of what their U.S. colleagues have already learned and developed.
One company, many faces
Wherever you look in Europe, there's likely to be an Acme Web site with local language support and a localized look and feel. However, Acme's U.S. executives have begun to worry about the company's worldwide presence. At a recent executive team meeting, the executive vice president (EVP) of marketing reported on a recent review of international sites, some of which didn't link back to the corporate site. Country units had taken a somewhat cavalier attitude toward corporate branding, product, pricing, and corporate information.
To highlight problems, the EVP used the Czech site as an example. Issues included:
- Brand management. Acme's Czech Web unit didn't employ the company's trademark yellow and purple color scheme, but instead chose a palette that would have looked more at home with a Big Mac. The developers also backdropped the company's scimitar logo with the spires of Prague -- a nice local touch that violated corporate branding standards.
- Product catalog. Major errors and omissions in product descriptions undermine Acme's well-known commitment to safety, the environment, and human rights. Focus group results indicated lower consumer trust in products sold through Acme's Czech retail site.
- Pricing. Product prices were months out of date. A comparison between Acme sites managed by business units in adjacent countries revealed that prices varied within the central European region by up to 35 percent.
In a final blow to her worldwide marketing program, the EVP found that the Czech site included her predecessor's résumé, whom she had replaced 14 months earlier. She concluded that www.acme-lifestyle.cz didn't represent the same corporate reality as www.acme-lifestyle.com. The CEO anticipated potential damage to Acme's worldwide brand and sales, and consulted with the CFO to calculate what this international imbroglio cost Acme in duplicate headcount, technology, content, process, marketing, distribution, and all other operational attributes of a modern Web site.
Inefficient duplication couldn't continue. The CFO also noted much of that spending was in local marketing budgets away from his ROI scrutiny, rather than in the IT or Web budget where its effectiveness could be measured (figure 1). After consulting metrics like unaided brand awareness and cost of sale, the CFO determined Acme had been doing a terrible job of projecting its hard-won image for quality, safety, and establishing a unique value proposition in international markets.
Figure 1: Global inefficiency -- Acme's international efforts reveal inconsistent Web site strategies, processes, and practices.
Business process re-engineering redux
Acme's executive team did what most companies in this situation would do: They established an international e-business SWAT team to look at and fix the problem. What gave more urgency to this special task force was a newly issued "suggestion" from the board of directors to eliminate cost, duplication of headcount, and inefficient processes by the end of Acme's fiscal year. The team was dubbed "i-SWAT" and was tasked with "global e-business process re-engineering." (Acme executives had a short communal memory, and some executives hadn't been around when the company's business process re-engineering (BPR) effort went awry.)
Action plan:
1. Consult with national business units. In their conversations with the errant brethren in Prague, the i-SWAT team immediately understood why the Czechs did what they did. To establish the Acme brand as a trusted and reliable supplier in the Czech Republic, the Web team translated only the parts of the U.S. site they felt were appropriate. Then, they localized high-touch elements such as look-and-feel and site navigation. They created their own descriptions of products to meet local sensibilities, to address Czech notions of online quality, and to foster a certain local trustworthiness for the brand. Over time, the exigencies of business in the Czech Republic caused them to miss periodic revisions for product evolution or pricing.
2. Read relevant research. The i-SWAT crew found that while there was a lot of research about why companies should globalize their e-businesses, there was very little on how to do it. They grouped financial and industry analysts into two camps:
a. The "now or never" demand-siders who wrote about ballooning Internet usage outside North America and how this growth would translate into as much as 40 percent of all Web-generated Internet revenue by 2003:
b. The supply-side gang began sizing the market for how many content management systems or translation memories might be required to deal with the problem, and how much revenue that would generate for those technology suppliers.
Of course, every report tantalized the i-SWAT researchers with one or two best practices tidbits about how companies should go about centralizing their investment in core Web technology and organizations. Few took the next step toward a comprehensive analysis of how to reconcile highly evolved U.S. Web activities with the needs of business units abroad. Instead, they treated global e-business as a separate sideshow to the bigger issue of how to create that great one-to-one U.S. site, a supply chain that works well for the American market, or a portal for conveniently anglophone employees.
3. Interview information technologists worldwide. The i-SWAT team found everyone was working around the clock to deal with the Web. Acme IT groups everywhere commented on rapidly increasing volumes of content. They pondered how they could make that next leap to personalization or e-CRM. And they all bemoaned the Sisyphean task of keeping their corporate story consistent within a site; few ventured to tackle the bigger problem of keeping stories synchronized across various country sites. Nonetheless, everyone recognized the need to somehow share resources across Acme, even if it meant local units would have to sacrifice some of their autonomy.
Institutionalize a global e-business presence
The story of Acme's journey to a more sustainable global presence might end here; the cost, control, and complexity issues have stymied many companies that preceded the executives at Acme.
Fast-Forward: Let's move past some of the hand-wringing, recriminations, and false starts that Acme took on its road
to rationalizing its international presence. Acme's i-SWAT team searched hard and found that a new generation of global-savvy partners and advisors had appeared on the scene, including:
- Professional services. Acme discovered that many of its current outsourcers and Web development partners had morphed into agencies with international presence and expertise. Integrators as diverse as Accenture, Cap Gemini, Deloitte Consulting, PricewaterhouseCoopers, and Sapient were lining up to help them manage their global sites. At the same time, independent software vendors, such as Idiom, Global Sight, Uniscape, and others, had brought out service offerings to support enterprises' global Web presence.
- Technology suppliers. Clued in by analysts' supply-side research, Acme found globalization management products that complemented its database, content management, and personalization solutions (figure 2). Solutions such as translation tools from Trados, a translator network from eTranslate, and globalization infrastructure software from Idiom could help manage the tough issues. International character support from CMS suppliers such as Interwoven and Vignette would let developers in France and Germany build sites without speaking English.
Figure 2: Globalization market landscape -- When contemplating a globalization strategy, complement your existing database, content management, and personalization solutions.
Acme's real epiphany, though, came when it realized that in becoming a global company both in the physical world and on the Web, it had failed to rethink its enterprise computing strategy. This oversight led to the costly, inefficient duplication of effort. The executive team committed itself to align Acme's IT strategy with its business goals. One objective was to make Acme's international presence credible enough to be recognized as a trusted supplier in national markets. Acme's CEO and board of directors felt that any lesser ambition would perpetuate the company's current ineffective approach to world markets.
To meet this business requirement, the executives commissioned the i-SWAT team to review all enterprise systems with the goal of enabling the same quality of customer experience wherever Acme chose to do business. Acme's executives were realistic enough to understand they couldn't immediately implement this vision of high-quality Web experiences in all 23 markets where it currently had a Web site. Instead, the goal was to create an infrastructure that could achieve high marks on the newest axis of enterprise scalability "global market support." Building out quality experiences in each market would happen as Acme analyzed market opportunities based on resources.
Build a strategic global infrastructure
After months of investigation, analysis, junkets to several international offices, and more analysis, the i-SWAT team distilled its work down to recommendations in three major areas.
Enterprise infrastructure: If it's not corporate, it's not strategic. The analysis showed that different country units had taken one of two approaches to their Web build-out:
- Enterprise systems were in the minority. The U.S. and German teams built their sites on proven enterprise software systems, aiming for high levels of reliability, availability, and scalability (RAS). They relied on databases like Oracle and DB2 to manage the content, enterprise application integration (EAI) technology like webMethods to hook into corporate systems for fulfillment and payment, application servers like WebSphere for robustness, and beefed-up CMS technology from Interwoven and Vignette for delivery.
- Ad hoc development ruled the majority. Every other business unit had jury-rigged its Web sites using a combination of FrontPage, random tools, and HTML files. While less costly to build, they were also difficult to manage and enhance, and couldn't withstand increasing traffic levels.
Reality Check: While the enterprise technology approach was initially more costly and more difficult, it proved to be the only way Acme could commit to high service levels and the ambitious "five-nines" (99.999 percent) reliability demanded by country managers. The team recommended that all online activity should be built on a foundation of these enterprise-class systems. It also advised Acme to establish centers of competence for application infrastructure, application development, user interface, and personalization technology. These centers would draw on the expertise Acme
had in different country units, "productize" experience for internal use, and share it around the world to get countries up to speed more quickly.
Data quality: Site integrity and customer trust depends on it
Acme's i-SWAT team saw enormous investment in the United States in Web site data quality. Having been burned too many times by posting the wrong price and treating long-time customers badly, IT developed processes to ensure the site posted only correct, current information about products and pricing. The key to data quality was consistent metadata and a systematic flow of information directly from corporate systems of record, such as databases and transaction processing systems, to content delivery and e-commerce systems.
Elsewhere, though, the situation was a throwback to the early 1980s. Product and pricing information originated in the United States, but a serpentine workflow process developed to translate instruction manuals delayed availability in the country for a month or more. Acme's country units had developed two different procedures for dealing with this reality:
- Compare each Web order against faxed price lists and paper catalogs from the United States, thereby incurring additional cost and time.
- Take the order with information as posted on the Web site, but then notify customers that the price was different.
Neither approach engendered trust, especially among consumers whose fluency in English let them compare and contrast the U.S. site with Acme in their home country. The negative impact on Acme's brand, reputation, and trustworthiness was huge.
The i-SWAT team's recommendation was to source all information directly from the corporate systems of record. Wherever translation and broadcast to other markets was necessary, the team advised using automated systems to monitor shared assets for changes, alerting affected country units about the upcoming change, and forcing a workflow to start translation and adaptation for other markets. They turned to globalization technology specialists to keep Acme's international sites correct, current, and consistent.
Market adaptation: Sites need local salsa
Having settled the question of enterprise rigor and information integrity, i-SWAT realized that even constantly available, consistent sites were useless unless the sites made sense to the visitor. Backed by statistics from Forrester Research, they knew Acme would receive more traction if visitors were addressed in their own language, and customer service costs would drop if instructions were displayed in users' native languages.
The i-SWAT team also looked to usability and site trust experts. One such specialist, Sim D'Hertefelt, advised that "the user's feeling of control of the interactive system" is a critical element of consumer trust and security, both key elements of Acme's plan to establish itself in international markets. They realized sites that tuned to the linguistic and cultural needs of their markets would give consumers the control they demanded.
Finally, Acme understood if they didn't do a good job of localizing their international sites, they'd simply duplicate the same behaviors of abandoned transactions found in the general U.S. market as researched by Jupiter Media Metrix—abandoned shopping carts, unsubmitted forms, and visitors who never return.
The task force advised country units to continue investing in adapting corporate information to local market needs, but to do so on the basis of enterprise-class infrastructure. For customer interactions, they recommended more one-to-one marketing work. For their business customers, i-SWAT advised targeted marketing to appeal to buying motivators. Rather than adapt Acme's EDI systems, i-SWAT decided to start from scratch and apply as much knowledge as they could from consumer Web sites to create a "one-to-few" business buyer experience. The team also advised conducting additional research on technology to enable partner relationship management (PRM) and collaborative commerce.
Move forward
The next step in Acme's global e-business evolution is to digest the i-SWAT recommendations, determine their practicality, develop schedules and budgets, and start remediating the company's worst practices.
Bottom Line: Decentralized international efforts need to impose some economies of scale by leveraging brand management, technology, and expertise around the globe; otherwise, companies will grow organically in each market, quickly diverging in mission, brand, and product. Totally centralized efforts, on the other hand, easily achieve economies of scale, but may do so at the expense of local flavor and appropriateness.
Successful companies will walk the razor-thin line between both extremes, but they won't succeed without setting reasonable goals and seriously analyzing current practices.
Contributing Editor Donald DePalma, Ph.D., is the vice president of corporate strategy for Idiom Inc. He lectures and writes frequently on the topics of Web globalization, global e-business strategy, and multicultural marketing. Before joining Idion, Don was a principal analyst at Forrester Research where he delivered trend-setting reports on globalization, content management, digital marketing, data warehousing, and application development. Before Forrester, he was a co-founder of Interbase Software and a key contributor to Digital Equipment's information management products. Before deciding in 1980 that software would define his future , Don labored as a linguist in the ivory tower of academia, focusing on generative grammar, computational linguistics, and the historical phonology of Slavic languages. He holds graduate degrees from Brown University and the State University of New York, completing some of his study in Prague and Moscow. http://www.idiominc.com, don@idiominc.com. Keyword Tags: Accenture Consulting, Cap Gemini Ernst & Young, Deloitte Consulting, E-Business, E-Business Management, Forrester Research, Global Sight Corporation, IBM, Idiom Inc., International, Interwoven Inc., IT Architecture, Jupiter Media Metrix, Oracle, PricewaterhouseCoopers, Sapient, Tech Architect, Tech Strategy, Technology Management, Trados Inc., Uniscape Inc., Vignette Corporation
ADVISORAMA Life is not measured in years, it is measured in moments. -- Elie Wiesel |
ARTICLE INFO
Print Edition: June/July 2001, Page 24
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