Gartner offers IT tips to stretch e-commerce budget

Research firm recommends reducing in-house application development for basic e-commerce functions.

E-commerce teams within IT departments must do more with less, so they need to maximize their resources through shrewd and clever management, according to Gartner.

Although IT budgets are shrinking anywhere between 5 percent to 25 percent, IT e-commerce organizations are expected to sharpen the online shopping experiences of their companies' customers.

A big reason for the heightened expectations is that sites like YouTube, Amazon, eBay, Flickr and Facebook continue to push the envelope in terms of new features and the online experience in general, said Gene Alvarez, Gartner's vice president of e-commerce and CRM research.

"That's the real big challenge here for e-commerce organizations: The bar keeps rising despite the economy," he said. "Whether in business-to-consumer or business-to-business e-commerce, as customers are exposed to new capabilities, they expect those at all other Web sites."

Thus, in order to stretch their resources and meet management's expectations, e-commerce units can take various steps, including reducing the money they spend on developing in-house applications, Gartner said Monday.

In particular, IT departments shouldn't invest on creating their own applications for basic e-commerce functions, since those can be implemented at a lower cost through commercial "off the shelf" software.

Specifically in the case of rich Internet applications (RIAs), the custom development work should be limited to those applications that will generate high sales conversion rates.

"You waste money if you have developers supporting commodity capabilities," Alvarez said. A company's e-commerce developers should be focused on building the types of made-to-measure applications that will give the company an edge over its competition.

In addition, IT departments must make sure that their e-commerce groups are maximizing the use of technology tools and products the company already owns.

At the negotiation table, IT departments should be merciless when dealing with their e-commerce software vendors and aim to lower their 2009 license fees between 20 percent to 50 percent.

Finally, IT managers need to take stock of their e-commerce staff to see if there are employees elsewhere doing the same tasks, such as separate marketing people for online and offline operations, in which case the work can be consolidated and personnel reduced, according to Gartner.

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