Catalog management, a marketing department’s role since the earliest days of Sears, Roebuck and Co. and Montgomery Ward, has come a long way from pasting up a printer’s sample and taking it to the press. New systems that create digital product descriptions and host interactive catalogs on the Web can prompt dynamic changes in business processes. Integrated correctly, these systems can deliver several distinct competitive advantages such as reducing costs, improving product displays and generating more sales leads. Yet companies still frequently implement catalog management software separate from other Web systems. Doing that isolates catalog information from their overall strategic Internet efforts, say corporate experts and technology analysts, who warn that forgoing system integration for short-term reasons could be a costly, long-term mistake.
Online catalog management is already big business. The market for catalog management software and system implementation is expected to grow from $1.89 billion in 2000 to $4.09 billion in 2004, according to The Yankee Group. Market leaders include IBM Corp., Cardonet Inc., Congex Ltd., Entigo Corp., Haht Commerce Inc., i-Mark Inc., Inforonics Inc., InterWorld Corp., Requisite Technology Inc. and SoftQuad Software Ltd.
"If you do not have your products online, businesses aren’t going to be able to find you,"said Gene Alvarez, program director of e-business strategies for Meta Group Inc., Stamford, Conn. In the age of the e-marketing boom, he said, catalog management is as strategic as unlocking the front door to the office each business day. "E-procurement systems are moving from indirect products to direct materials," Alvarez said. "As that happens, businesses need catalog management systems even more."
Defining catalog management
So, what exactly is catalog management software? Basically, it’s a platform designed to draw together all of a corporation’s product information into a single repository.
Today, many b-to-b companies have product information stored in print catalogs, disparate databases, multiple enterprise resource planning systems or the institutional memory of its sales force. Those silos of product information may have been OK when independent parts of a business sold to vertical-industry cliques, but e-commerce forces everyone to open up those processes, said John Carini, senior manager, Deloitte Consulting, Austin.
Buyers are forcing the move to Internet catalog management, Carini said. "Big companies are implementing Ariba, Commerce One or i2 [Technologies] to enable electronic buying, and they’re saying they want live, electronic product descriptions," he said.
This doesn’t mean companies are completely abandoning print catalogs, but with the ongoing postal rate hikes and increasing Internet savvy of customers, online catalogs are steadily supplanting them in importance.
Putting together an online catalog, however, is neither easy nor cheap. It is not unusual for a company to invest more than $1 million in a system, and companies should plan an ongoing budget of more than $600,000 annually to run it, said Darren Bien, commerce infrastructure analyst for Jupiter Media Metrix Inc.Creating a system often includes services such as providing consultants to identify problem patches and data entry clerks to convert paper-based product descriptions to electronic formats.
Ideally, catalog software should be used in tandem with content management systems, which are also rising in importance and popularity. Content management systems are designed to make it possible to publish to the corporate Web site with a minimal amount of Webmaster or IT support. Catalog management software will become a central part of content management systems, but that full-scale integration won’t occur until 2002 or 2003, Alvarez said. Until that time, he said, the separate products must be synchronized as best they can.
"Catalog management is not a ‘bogey’ [or a losing proposition] when compared to content management, but rather catalog management is the atom for Web commerce that fits within a content management system," Bien said. "Without a well-defined, well-structured, easily searchable Web catalog, you can’t do commerce."
What’s driving adoption
Three key factors are driving adoption of catalog management: Marketing and sales departments are using it to open new sales channels, reach existing buyers’ Web purchasing systems and reinforce distributor relationships.
GE Lighting Ltd., Surrey, England, is an example of an industrial company that’s been tackling all three catalog management strategies. It currently has separate Internet catalog management systems for internal product information, extranet product information and corporate purchasing. In June, GE Lighting will go live with a new system powered by software from Entigo that aims to provide enhanced services to its distributors, said Cameron Bird, GE Lighting director of e-business.
Key to its new system is the ability to deliver product information to distributors in a format that makes it easy for them to automate orders, shipping status and other transactions, Bird said. As a service, GE Lighting will adapt up to 30,000 of its product codes to match distributor descriptions. "We’re offering our distributors a one-stop shop for [adding] transactional services," he said. GE Lighting has already recouped about $250,000 annually through reduced printing costs through its electronic catalogs, he said.
One mistake often made by companies is to think catalog management is strictly a sell-side system. Savvy organizations are using online catalogs to bolster buy-side operations.
For example, Philips International BV, Eindhoven, Netherlands, is using a system from Poet Software to distribute about 150 supplier contracts to 80,000 buyers worldwide. The software system automatically collects catalog descriptions from suppliers and converts them into a standard format for Philips’ buy-side applications.
"We have a decentralized business, and on a local level not every [business] site knows exactly what they are buying," said Gaspar Mondejar, project manager of e-procurement for Philips’ corporate purchasing and forwarding department. "We suspect centralized buying catalogs will help us make better decisions."
Black & Decker Corp.’s Emhart Fastening Teknologies, New Haven, Conn., has implemented a catalog management platform that is designed to never reach a dead end. Using software developed by i-Mark, the e-catalog conducts eight different types of search against the catalog in order to return results. More than 70,000 visitors have accessed it in a little over a year, generating some 55,000 leads.
A single Web platform for its 10,000 products has allowed Emhart to deploy value-added services to its customers."We want to be with the customer from concept, design, installation to after-sales service, and catalog management is immensely important in that process," said Darren Byrne, Emhart’s director of e-business.