BtoB

AMP building on overseas base

By Published on .

Most Popular
"We're using the same business model as Boeing and McDonnell Douglas, both of which formed new companies based on a set of knowledge." Taking a business online is one challenge. Globalizing that effort is another. Most businesses tackle these tasks separately, then deal with the consequences. Not AMP. The world's largest manufacturer of electric connectors built its online catalog to be "global from the beginning," says Jim Kessler, AMP's global director of electronic commerce. "It was a corporate mandate."

Although it took nearly two years to craft and implement a database-driven site -- designed to serve AMP's 90,000 customers in 50 countries -- the wait was worth it. For starters, the Harrisburg, Pa.-based company saved 40% on an annual budget of $15 million to publish and distribute paper catalogs worldwide.

But AMP's deliberate, ground-up approach also minimized the high cost of going global: Translating the catalog into eight languages and localizing the marketing message, program and product lists for each country.

More important, by phasing in access to the catalog since its debut in 1996, AMP surmounted many of the obstacles confronting U.S. companies -- service levels, local tariffs and bandwidth.

"Many firms make an emotional investment in the Internet," says Mr. Kessler, who is also director of AMP eMerce, a separate division established to help commerce-enable businesses. "Then, they get black eyes because they can't deliver, particularly in the international market."

AMP building up its site

Indeed, while countless corporate marketers are now redesigning or scrapping hastily built sites to accommodate language and cultural differences, this $6 billion company is building on top of its firm digital foundation; AMP plans to launch an electronic ordering capability this year.

Its approach will be consistent with the past. "We'll limit access by country and industry, to monitor usage and traffic so we can continue to provide a high level of service on the Web," says Mr. Kessler.

Currently, 142,000 users from 145 countries have registered at the site; 15,000 from 80 countries access it daily. Engineers can find product and price information about more than 500,000 electronic parts, as well as download test data and design drawings, previously available only on CD-ROM, a program AMP has now discontinued.

Cuts other costs

At the same time, AMP has cut down its catalog print run and reduced the production cycle from nine months to one to more effectively accommodate the 300 product changes that occur daily. The company has also slashed its $800,000 annual fax bill by 20%.

Mr. Kessler credits the decision to develop a database-driven site as the "key to our success." It cost AMP nearly $1 million in 1994 to build the catalog, which lets users customize the site for their own needs.

But AMP later recouped that investment in translation costs alone. For example, the five language companies that bid on the job of localizing AMP's product content submitted quotes exceeding $1.5 million. "Those prices were higher than my entire budget," Mr. Kessler says.

Prices can be slashed

Once he explained that each word had to be translated only once, because pages were created on the fly, "the price dropped to $100,000," he said.

But going through the process was a valuable lesson about creating a global strategy upfront. "Any firm going global will face some kind of sticker shock, unless they prepare for it," Mr. Kessler warns.

AMP also saved time and money using a single database, instead of many. But that meant finding software that supported multiple languages. That's because it takes one byte to support a character in most Western languages. But Asian languages require two bytes.

"We went with Oracle 7 because it supported a unicode," Mr. Kessler says. "This allows more flexibility for different alphabetical characters."

Separate databases

The alternative, he said, was to establish separate, remotely located databases, which are more difficult to maintain, or port these databases into one that supports unicode.

The company also wanted the database located on a single U.S.-based server, rather than having to maintain servers across the globe. "We didn't know how robust the Internet would be and thought we'd have to go to a multiple strategy," says Mr. Kessler.

But he discovered that wasn't necessary, that the site worked well throughout the world. "If you have a single product line, one server works fine," he says.

When it came time to launch the product, AMP initially rolled out with English, French, German, Italian and Spanish. By June, it added Japanese, South Korean and Chinese. Users are required to register at the site and specify their country of origin. The next time they log on, the site automatically appears in their native tongue.

AMP also plans to phase in online ordering this year to ensure a high level of customer service. As a pre-emptive strike, AMP is creating a single product price worldwide that's augmented by shipping, taxes and tariffs for each country. Mr. Kessler says this avoids a gray market situation in which some countries can now get the same product cheaper online.

Even before AMP takes its first order, the Web site is already setting standards for electronic commerce. Last year, AMP was among the Top 10 in Business Marketing's NetMarketing 200 ranking of top b-to-b Web sites.

Publicity builds interest

British Telecom and Commerce Net both lauded AMP in 1996 for most innovative use of the Internet for commerce. This publicity generated a steady stream of inquiries that prompted the company to form a separate division called

AMP eMerce that year to help commerce-enable other businesses.

"We're using the same business model as Boeing and McDonnell Douglas, both of which formed new companies based on a set of knowledge," says Mr. Kessler.

So far, business is booming. Currently, the division is serving 70 companies in database publishing and localization projects. In contrast to AMP's electronic catalog staff of three, the AMP eMerce team totals 50, and it's growing.

"We used to get a lot of people calling to find out whether they should go online," Mr. Kessler says. "Now they want to do it yesterday."

In this article: