Analyst offers top tips for cost cutting on e-business
1 min read
Analyst Gartner is offering five tips to IT managers in charge of e-commerce that it says will cut costs in this year's tough economic climate.
First, it recommends using off-the-shelf products, not custom development, for commodity functions (such as shopping cart management, search, product merchandising and management).
Gene Alvarez, research vice president at Gartner, estimates that using off-the-shelf or open-source applications will shave 35% off maintenance and license costs for big manufacturers, and 25% for SMEs this year, and 20% per annum going forward.
He also indicates a one-time cost to implement this strategy of $250,000 to $350,000 in software, with a one-time cost for implementation services for large organisations. "A developer would be better to develop rich Internet shopping capabilities or improve site design for search engine optimisation so that the site can rank higher in a Google-based search," says Alvarez.
Tip two concerns getting more out of technology you already own – on average cutting the costs of service, sales, and marketing by an estimated 15% for large enterprises and 10% for SMEs in 2009 and 10% in subsequent years. Gartner estimates that one-time costs to implement this recommendation are less than 5%, because they require only established resources.
Tip three is then to focus rich Internet application tool development on sales efforts with higher conversion rates – and to harness established community web sites, rather than building communities in your own organization's site.
And the savings: 10% for large companies and 5% for SMEs this year, and a further 5% in future years, says Gartner – with development costs paid for by reductions in other projects.
Tip four is about negotiating hard with e-commerce software vendors. Gartner suggests that skilled negotiators can save 20—50% on license fees immediately, and an additional 3—4% long term, with no additional expenses.
Finally, tip five is about organisational restructuring. "In some enterprises, personnel perform the same job tasks on different sides of the business," observes Gartner. "It may be possible to combine these roles and produce savings in HR."
And the savings there: 10—15% of e-commerce HR expenses in year noe, followed by 5% going forward, with little upfront costs for training.
