Comedy writers earn a cheap laugh when they quote from instruction manuals for domestic appliances which have been translated from their 'source' language into English. The result is rarely a problem, however, as it is usually clear to the user what the writer was trying to say.
In a technical or professional environment, writers have to be more conscious of the way their words are converted from one linguistic medium to another. Published material has to be transliterated, rather than simply translated. This may involve a complete re-write in the target language if the subtle nuances of the original text are not to be lost along the way.
A no less measured approach is required when a software or solutions vendor tries to take its product set to an international arena having established itself in its home market.
This time, the whole culture of marketing the product has to be examined as success in one region does not necessarily yield similar results across national boundaries.
Linguistic considerations apart, will the vendor and its product 'translate' successfully to the European environment? Do the overseas customers, for example, have the same requirements as those already being served?
And no means the least important consideration will be whether the product will be handled directly by a subsidiary of the vendor or through third party channels. Changing the route to market can impact adversely on the vendor's success.
In launching a European operation at the start of 1998, the electronic commerce solutions specialist Commerce One of Walnut Creek, California, believes it has taken into account all of the factors which will help it make an effective transition from the United States.
The company starts off from a solid foundation in North America, if its customer base and financial structure are a reliable indication. As the developer of an Enterprise Purchasing application which is extensively used by corporations in the Fortune 2000 list, Commerce One has established its credentials since its formation back in 1994. Those credentials are strengthened further by the signing of a joint development agreement and a strategic US$20 million investment in 1998 from SAP, the major German-owned developer of business software tools.
To the extent that its founders were drawing on their previous experience of delivering specialist information services over electronic media, Commerce One had been able to bring its own electronic commerce solution rapidly to market. One of the contributory 'strands' was a powerful electronic catalogue module that is the kernel of most supply chain applications: the second was an in-depth understanding of complex transactions throughout an enterprise. Chuck Donchess, the VP of Marketing at the company took up the story. "The founders were heavily involved in systems to support branch banking, where the requirement was for handling high volume of transactions through a user-friendly interface. Before the widespread arrival of the Internet, however, the only viable communications medium for handling this kind of task in a distributed environment was Frame Relay.
"This core competence of handling transactions in distributed environments is central to our products today. The user interface has migrated to a very simple intuitive desktop system requiring zero training. That is essential given that the application was developed for purchase requisitioning across the enterprise."
To be specific, the Commerce One solution (C1 BuySite) focuses on the indirect spending by an enterprise. It provides real-time support for secured inter-business transactions which are required for end-to-end electronic procurement and supplier management. The stages supported include item selection, quotations, orders, reconciliation, stock and tracking.
The remit of C1 BuySite is the provision of virtually every item that a company would define as an indirect trading expense. For a typical manufacturing business, that would cover spare parts, capital goods, service contracts, the computers on the desktop and the desktops themselves. It would include also purchases of utilities (gas, electricity, water, etc) and service contracts for maintenance and cleaning.
While manufacturing purchases have been automated successfully for a generation (and have themselves been migrating to the Internet as a medium of communications), there have been few attempts to rationalise the purchase of litterbins and data backup cassettes and catering provisions across the enterprise.
Responsibility for the direct purchases of raw materials is generally confined to a limited number of people within an organisation: their purchasing power is high, and they deal with a small number of suppliers. On the indirect front, however, more people have a purchasing requirement: their 'target' base of suppliers is potentially very large, but the value of a single purchase is comparatively low.
In North American companies, direct purchases typically account for some 25% of total spending. By comparison, indirect purchasing represents 40% of the spend, but some 80% of the transactions. Amongst the major corporates in Europe, those proportions are probably similar, so there is clearly scope for reducing costs and improving operational effectiveness.
If the number of purchasing transactions made by corporates could be reduced, then the case of adopting enterprise purchasing solutions would be proved at a stroke. But given the lower take-up of the Internet in Europe, was Commerce One about to institute a method of working that the majority of enterprises in the EU had not adopted wholeheartedly?
Donchess does not see the question of technology holding back its adoption. "While the most popular implementation is certainly over the Internet, architecture of C1 BuySite supports almost any type of communications. It means that the requisition could be delivered through fax, Email, EDI or even hard copy."
For the Fortune 2000 corporates which Commerce One claims as its primary customer base for its C1 BuySite environment, access to the Internet will be commonplace; a corporate Intranet a standard feature of those corporations' communications. The adoption of an application which utilised that infrastructure would be seen as an incremental exercise and would inherently meet with little resistance.
Within Europe, the adoption of enterprise purchasing schemes would probably be handled at the same time as intranets are adopted; increasing slightly the odds that acceptance could be less smooth; the political considerations weighed more heavily against it.
The economic argument in favour of adopting such a procedure, however, should be sufficiently strong to overcome those who are resisting progress to the Internet. The net savings to be achieved, it is claimed, are as attractive to the company which has yet to invest in corporate Internet technology as they would be to one well versed in its mores. The Internet simply makes the use of the system an order of magnitude easier to handle.
In one respect, intranets are great 'levellers' of corporate size. They allow businesses an order of magnitude smaller than the Fortune 2000 brigade to harness resources more effectively and therefore be able to take advantage of electronic purchasing systems.
Having optimised applications including C1 BuySite and C1 REOS Real-time Transaction Server for Microsoft Site Server, Commerce One could expect to see its solutions running across a broader range of corporates. Realistically, none of those business could be described as 'SME', but the scalability of Site Server should mean that the Californian company could reach enterprises outside the Fortune 2000 league or its equivalent in other countries.
Commerce One management paints the picture of a purchasing panacæa, but the Marketing VP accepts that there are situations in which the benefits would be more limited. "We were talking recently with a major hotel chain in the US. What we found when we undertook the research was that almost everything that the establishments in the group were buying - like meat and fish and vegetables were sourced from local suppliers. There was very little scope for securing significant leverage."
What does appear more successful is the implementation at PG&E, a Fortune 50 utility in the San Francisco area. The group makes massive purchases of indirect goods every year, but these are with around 1000 suppliers. The concentration of purchasing power is important here, reducing the duplication of effort which arises in any dispersed organisation.
According to Chuck Donchess, certain types of enterprise have been able to benefit more extensively than others from the Commerce One approach. These have been identified in the US as being high technology development companies, large manufacturing businesses, oil and gas utilities (where the greatest benefit is probably in the purchase of spare parts) and telecommunications.
If the American experience is even half relevant to Europe - not counting factors such as multiple currencies, languages and VAT regimes - can the product set be applied meaningfully in the same sectors in Europe? Taking each point in turn, the ability to accept a spread of European currencies was a comparatively short step for Commerce One to take, while the company had already implemented user interfaces in local languages. The question of coping with VAT has now been addressed.
In its attempt to reach the European market speedily and cost-effectively, Commerce One started off by addressing the subsidiaries of companies that it already counts amongst its customer base in the United States: the credibility earned with those major corporates has provided a powerful springboard into Europe. The Commerce One management would be the first to recognise that the routes to market are very different between North America and Europe, where the company is looking to achieve a significant level of penetration.
For a comparatively small organisation to address a base of several thousand potential customers would be unrealistic: the company is looking to larger partners to provide a complete solution.
Though many of the same names are involved in the sales process on both sides of the Atlantic, the relationship between those channel partners and the software vendor is different and they are not, therefore, the obvious choice of channel partner. In the US, for example, the consulting practices of the 'Big Five' accountancy firms pro-actively generate sales of the products they are carrying.
Price Waterhouse, for example, has a strategic alliance with Commerce One to integrate the company's application within SAP's R/3-based ERP solution. Key to that relationship is that the consultants assume responsibility for implementing the system on customer premises.
In Europe, the relationship between an accountancy firm and its clients would normally be that of the independent consultant giving advice on a solution which could well be installed and commissioned by other parties.
Commerce One expects its market in the region to grow through a spectrum of new sales channels and service providers. "We are identifying partners who are reaching corporates as part of their current business. The objective is for them to provide complementary services such as change management and implementation, product roll-out and integration.
"Reaching out to the European arm of existing customers is necessarily a short-term solution intended to create a critical mass from which the local business will develop. Our operations are being launched in new regions of the world every six months on average."
With its European subsidiary established in Switzerland, and a sales office in the UK, Commerce One has demonstrated its commitment to do more than simply mail copies of its software to third party resellers and hope for the best. As a member of the Microsoft Value Chain Initiative (VCI), the company would expect to benefit from the ubiquitous presence of the Microsoft organisation in each of the regions where it subsequently identifies a market. But perhaps the most significant step taken by the Californian company in its foray into Europe has been the steps taken to make its product set acceptable to local market conditions. It has left little scope for sceptics to hail yet another US product with its shrink-wrapping still intact.
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