$50,000 a month was probably generous.
The volume at one of the internet's largest retailers is very high. Each
order you make from the shopping cart could potentially turn into several
drop ship POs to trading partners. Instead of 1 PO for 500 copies of a
movie, ours would be 500 POs for 1 copy of a movie. The catalogs are
staggering in size, too. We would get a regular load of half a million
books, for example.
One trading partner that required that we use the van (for the
850-855-856-870, 832 and 846 were still internet.) That van bill would
range from $6,000 to $12,000 a month, during christmas. This particular TP
represented somewhere around 10% of the business. Do the math, and figure in
substantial volume discounts and $50,000 a month, if not more, is
reasonable.
<Was the $50K per month, if the choice had been "use a VAN" less than that
of: How much did the company spend on:>
Equipment
- I used a recycled IBM web server, dual Xeon 400, SCSI, Raid
Communications infrastructure
- already had it for the website
Trading Partner management
Resources (such as yourself whom made the choice a reality).
- two to three employees, including myself, VAN isn't going to save you this
cost
Software, upgrades and annual maintenance fees.
- nothing communication specific, Perl is free.
Ramping community members on the service
- this is our job, not an extra expense
Trading Partner participation costs
- none
Maintenance contract on equipment used
- minor
Support
- our job
Chasing lost or defect transactions and so on for this project??
- Still had them with the VAN.
Mike the VAN is not a magic problem solver, no more then XML is.
My goal in building a system is to have as few links as possible. (Keep it
simple stupid). The LAST thing I want is my data going through a mainframe
and being converted to EBCDIC and back to ASCII before it gets to my TP, or
getting lost in the Mark III.
Anthony
-----Original Message-----
From: Michael Burbury [mailto:[EMAIL PROTECTED]]
Sent: Thursday, August 16, 2001 11:05 PM
To: [EMAIL PROTECTED]
Subject: Re: Internet vs VAN vs capabilities and cost = Business
Decision.
Hi there Anthony,
While I agree that your business choice of using the Internet was probably a
sound one, how about some justification of the costs involved versus if the
company had outsourced it to a VAN? Quite simply put, I find it hard to
believe the company saved $50K per month by not using a VAN.
For instance:
Was the $50K per month, if the choice had been "use a VAN" less than that
of:
How much did the company spend on:
Equipment
Communications infrastructure
Trading Partner management
Resources (such as yourself whom made the choice a reality).
Software, upgrades and annual maintenance fees.
Ramping community members on the service
Trading Partner participation costs
Maintenance contract on equipment used
Support
Chasing lost or defect transactions
and so on for this project??
(Then amortize it over the period the project is expected to live for)
(IE: I spent $2.5mil setting this up, whereby $50K per month would last 50
months, would the project last this long? Have I saved?)
IE: is it really (when you look under the covers) less cost per transaction?
Or has the cost simply "shifted" to another place and was the same or even
more?
While I agree it was most probably less, I cannot agree that it's cost was
$0.
(Afterall, I'll assume the company did pay you for you to create this
reality.)
My point being, is that the company chose to move the costs elsewhere rather
than to pay a VAN and this is often a sound choice if your company has the
resources, time and infrastructure and can save money doing so.
One thing that always makes me "cringe" is when a company invests alot of
money creating something new that only lasts about 2 years before the
technology has changed and they have to do it all again. I will admit that
VAN's fall into this hole on a regular basis and probably equates to high
fees to recover lost profits.
Best Regards,
Michael Burbury
GE ecXpress
System Administration
My views are my own and not the views of the company I work for.
----- Original Message -----
From: "Beecher, Anthony" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Friday, August 17, 2001 4:27 AM
Subject: Re: Internet vs VAN vs capabilities and cost = Business Decision.
> Good lord! What is all this garbage?
>
> A perfect example of the shortcoming of EDI - get two overzealous
> sophisticates involved in your decision making process and you get bogged
> down in a bunch of perfumed garbage.
>
> The internet instead of the VAN is a no brainer! What company doesn't
> already have some internet connectivity? Why pay a cost per character when
> you can do it for no cost per character?
>
> If I had used VAN instead of internet, my monthly VAN costs would have
been
> about $50,000. Using the existing internet connection, the van fees were
0$.
>
>
>
> Anthony
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