Dot-com executives enhance and rethink their Web sites’ offerings as they target the needs of maintenance and engineering managers

— By Dan Hounsell, Editor

Dot-com executives believe they are up to the challenge of bringing e-commerce to commercial and institutional facilities. Their Web sites target the broad needs of maintenance and engineering managers, most importantly in terms of online procurement. And the facilities market is in need of solutions of any kind that provide bottom-line answers to their day-to-day challenges.

But more than a few facilities are still on the sidelines of e-commerce and have avoided rushing into a decision on comprehensive e-commerce solutions. In a large number of cases, executives say, the deluge of online alternatives and options that have sprung up in recent years has prompted managers to take more time before making a decision.

“There is a whole lot of stuff being thrown at these people,” says John Hoeschle, vice president of marketing for Bestroute .com. In his view, the prevailing attitude in many facilities is not so much resistance as what he calls “intelligent hesitancy.”

The move to e-procurement is inevitable, however. Maintenance and engineering managers are under ever-increasing pressure to cut costs and generate savings in all areas, including MRO purchasing.

“There is a lot of pressure in the public sector to increase the efficiency of product procurement,” says Dean Fredenburgh, director of business development for Epylon.com.

Identifying challenges
Among the toughest challenges in penetrating engineering and maintenance departments, executives say, is changing the way managers think about buying products.

“Our real competition in this market is the old way of doing things,” says Michael Stewart, chairman and chief executive officer of Sitestuff.com. In many cases, managers oversee staffs spread out over a large buildings, and in many cases, each location has its own buying needs and habits.

Also, online procurement is forcing organizations to revisit in-house purchasing structures and approval processes that have existed for decades.

Finally, there is the computer-vs.-paper challenge.

“It takes time to get people to go to the computer instead of the file cabinet,” Fredenburgh says. So when potential buyers do go online for products, they had better find what they’re looking for — and fast.

In general, dot-com executives believe the facilities marketplace for MRO products is ready, willing and able to tap into the online marketplace. One executive says that 30 percent of facilities people have purchased something online.

Adds Stewart, “Building engineers by and large love this [online] tool — if they are provided with the right technology and training.”

Bill Sullivan, vice president of industry marketing for Excara .com, says one of the company’s goals is to enable the site’s visitors to find what they want with “three clicks in 30 seconds.” Beyond that, he says, customers’ frustration builds, and potential sales fade.

Dot-com executives also know that they will have to work hard to address the strong relationships that many managers and their staffs have built up over the years with local distributors of parts and equipment.

“People have spent decades paring down their lists of distributors,” Hoeschle says. “Relationships are extremely important on a local basis.” In many cases, Web sites seek to address this potential hurdle by augmenting their Web site offerings with phone support and help lines to give customers a human contact during the purchase process.

The state of the market
Many facilities might be biding their time when it comes to plunging into e-commerce, but dot-com executives have no doubt that when more managers do take the plunge, facilities will become major customers.

“In the next few years, you’re going to see strong adoption of Internet procurement of MRO products,” says Peter Provenzano of Supplycore .com. “Right now, there’s a little bit of a deer-in-the-headlights situation because of the number of options.”

The purchasing influence of engineering and maintenance departments is especially alluring.

“Building engineers have been running facilities for years, and we know that if we don’t get their buy-in it won’t work,” Stewart says. “They are the drivers of procurement. They have their hands on the process.”

And in today’s bottom-line-conscious facilities, managers are looking at any and all alternatives when it comes to buying products more cost-effectively.

“These people are looking for alternate supply channels,” Fredenburgh says.

Benefits to facilities
Driving the demand within facilities for Internet solutions is the realization by managers that the Web holds the potential to help them solve some of their facilities’ biggest challenges.

For example, many facilities can benefit from a system that allows purchase information to be entered at a single point and flow seamlessly to other areas of the organization as needed.

“That is where there will be a lot of savings on transactions,” says Steven Gottfried, president of ServiceChannel.com. But in the mind of many managers, product procurement is only the beginning of the potential benefits for facilities, where challenges and solutions are increasingly complex.

“They’re moving away from replacement and toward solutions,” Sullivan says, adding that, for example, a burned-out lamp more often is an opportunity to rethink lighting issues facilitywide.

Increasingly, managers judge Web sites based on their ability to take facilities beyond procurement and into such areas as cost analysis, order aggregation, order tracking and customized order entry.

“They wanted the ability for the organization to understand the total MRO spend,” says Jerry Goldstein of FacilityPro.com. “That had been a very difficult task prior to electronic commerce, but now they have the ability to understand.”

Becoming e-facilities
Managers looking for new alternatives and avenues on the Internet are more likely to find Web sites that meet the parallel goals of being easier to use and delivering a more robust set of products and services to their desk tops.

For example, Web sites are likely to be content oriented in an effort to attract and retain customers.

“There has been a limited shopping experience because too often they can’t find the product, and they’re turning back to paper,” Sullivan says. Given more information on the products, as well as applications for them, customers are more likely to leave satisfied and return for more later.

Web sites also are featuring more services to complement the roster of MRO products that support the maintenance and engineering mission.

“This market is calling for services,” Goldstein says. “It’s because of the amount of money spent on services. It’s five or six times the total ‘MRO spend.’ ”

Given today’s constant and rapid transformation of Web sites, any particular site’s success or failure is likely to depend less on the number of products and services it features than on its ability to provide customers with quick and easy access to a roster of resources to help them solve problems cost-effectively.

“Ultimately, many companies are trying to figure out how to make the product simpler to use.” Fredenburgh says. And Web sites that can succeed in providing that kind of service is likely to become what customers aim for — a one-stop solution. Provenzano suggests that customers review and consider Web sites based on their ability to provide as many answers as possible: “Adopt one solution, and make sure it does everything you want.”