E-Commerce Re-Platforming

Transcription

1 Developing a Clear Understanding of When and Why Re-Platforming is Appropriate Contents -% Executive Summary 1 Justifications for Re-Platforming 2 Question 1: What Features and Functions 2 Define Re-Platforming? Question 2: What is Most Important for 3 the Next Platform? Question 3: When is it Time to Re-Platform? 4 Question 4: What Operational Pressures 4 Can Impact Re-Platforming? Successful Re-Platforming: A Business-Driven 5 Process for Growth With today s rapidly evolving technologies, upgrading or replacing an e-commerce platform is a common strategic imperative, and a means to establish and maintain competitive advantage in the face of changing customer expectations. Re-platforming can be as straightforward as a routine upgrade of an existing system or as complex as a total replacement. Concerns raised are typical, such as: Will it be expensive? Will it be disruptive? Will the experience be loaded with frustration? This paper discusses four critical questions to be thoroughly answered before embarking on an e-commerce re-platforming initiative. When all the issues have been analyzed and the answers are clear, an organization will have more information and a better understanding for timing and strategy, a comprehensive list of capabilities the platform should deliver, and well-defined roles and responsibilities for the implementation team. 1

2 Justifications for Re-Platforming Online commerce organizations may decide to re-platform for several reasons. The most common catalyst materializes when an organization recognizes that its current commerce system fails to capture all available revenue opportunities. A second frequent challenge is the inability to sell effectively to international customers. Yet another is the failure to leverage new channels, such as social media or emerging devices including tablets and smartphones. A fourth obstacle relates to insufficient integration between online and offline channels. A fifth key driver is more basic customers are being lost to competitors with more attractive and effective e-commerce offerings. The following are four typical conversations that might take place as a company defines the functional and tactical goals for a re-platforming exercise. Question 1: What Features and Functions Define Re-Platforming? When marketing first brought up re-platforming, they based their business case on the need to support mobile devices in our commerce engine. We could see that smartphones and tablets might be an interesting market at some time in the future, but we weren t convinced. It was only when they pointed out that our current system was operating at capacity, and at increasing risk of service interruption, that we decided to revisit the issue. Once we were done with that internal process, we realized there was a range of capabilities our competitors had that we didn t. That s when re-platforming became a more urgent priority for our company. Many organizations think they have to re-platform when, in reality their existing commerce system could be adapted to do the job. Other organizations try to convince themselves they do not have to change their existing platform, even in the face of obvious evidence to the contrary. The descriptions below of foundational e-commerce system capabilities may provide a baseline for determining if the need to re-platform is truly urgent. If a business finds that it lacks three or more of these capabilities, re-platforming is probably in order as soon as practical. Personalization Are customers finding it difficult to search for information? Can the system recognize repeat customers and deliver personalized product recommendations? Is it possible to perform internal retargeting recognizing when a customer acts on an solicitation but leaves items in the shopping cart, so that the system offers a discount incentive when a sale is not completed? Innovative Merchandising Technologies Inventive use of Web and mobile tools, combined with powerful, always-available high speed networks, means that customers can be influenced by rich data in ways that were unimaginable a year or two ago. Can the existing system provide interactive experiences, such as enabling customers to upload a photo or video, and view themselves virtually trying on clothes prior to adding an item to their shopping cart? Promotional Capabilities Are new and preferred customers receiving dynamic pricing to encourage purchases and ensure continued loyalty? Are affiliate sales generating automatic discounts for those who qualify? Scalability Is the system slow when compared to the competition, or incapable of utilizing rich media and other recent advances in online merchandising? Does a sudden influx of site traffic cause it to crawl to a halt, or crash? Support for Social Media Channels Facebook, Twitter, Pinterest, and other social media outlets increasingly rely on e-commerce to advance their own profitability. Older systems, however, often cannot integrate with these powerful, popular platforms. And many older systems fail to connect with offline channels for a truly integrated commerce environment. Is the incumbent system stuck in the past? Support for Emerging Devices E-Commerce engines built for the Web may fail to reformat content properly on tablets and smartphones. Each device has its own advantages and disadvantages in ease of use and presentation. Can the current platform automatically adjust content and workflow to recognize and optimize the capabilities of whatever device the customer is using, including future devices, such as smart watches and enhanced eyewear like Google Glass? Ability to Test and Incorporate Unforeseen System Additions The only thing certain about the future is that something unexpected is on its way. How easily can the current system incorporate new elements at a reasonable investment of both time and money? 2

3 Question 2: What is Most Important for the Next Platform? We have re-platformed a couple of times before, and every instance was a nightmare. It was the same mistake, over and over again. Either marketing would want something, but IT wasn t behind the effort, or we would be halfway through the process when the senior executive behind the effort would leave, and we would find ourselves without political support to finish the job. One time, we ended up replacing a custom-built, back-end system with something baked into our commerce engine and the new system didn t work nearly as well as the old one. After we learned how to get everyone on board at the front end of the project, everything became much easier. Our current system has met and surpassed our hopes and expectations. The reasons for re-platforming will vary across organizations, and among groups in the same organization. Different groups and departments, some with wildly differing criteria for a new system, are likely to have conflicting ideas about what constitutes success after a re-platforming exercise is complete. Sales lost to competition, and more satisfying buying experiences found elsewhere, may increase the pressure on internal constituents to insist that their requirements are the top priority. Marketing teams focus on delivering consistent brand experiences, regardless of the channel. They want to empower customers through front-end personalization, attractiveness, and ease of use, while collecting and analyzing sophisticated targeting data on the back end. IT teams worry about scalability, versioning of information, and protection of both data and privacy. A common human resources concern is that the platform does not increase demands on staff members or create a need for additional skills. Operations personnel want to ensure a smooth transition between the e-commerce platform and the ordering and fulfillment systems. Strategic planners want assurances that a more effective e-commerce platform does not compete unnecessarily with more traditional business models, or other unrelated business initiatives. Management wants a system whose return on investment justifies the time and expense of the re-platforming effort, and confidence that the business drivers surrounding cost, timeline, and functionality are sound. Company leaders must align all groups with the big-picture and with clearly prioritized re-platforming goals. The following are four essential, high-level areas of concern that should be addressed. Attention to these areas is a direct extension of best practices for any large-scale internal project. Operational Readiness Senior management has to recognize the value of re-platforming and be willing to provide the funding and political cover to make it happen. For the IT group, readiness means being able to deliver integration between the upgraded platform and other core systems. Skills and manpower must be brought into alignment. The marketing department should make a business case for the new platform, and possess the internal expertise to manage the branding, content, and usability. Organizational readiness also means being aware of the ways in which a re-platforming effort can require additional resources, and having a realistic budget in place. For example, content may need to be refreshed on a regular basis by an external advertising agency or design firm. Suppliers might want to provide content and inventory updates directly, dictating that sufficient access and security elements are in place. Personnel should be hired and trained to introduce advanced capabilities into the system, such as social media channels and other emerging technologies. Scalability and Extensibility The new platform will have a shortened lifespan if it cannot easily scale to handle increasing numbers of transactions, types of transactions, additional languages and currencies, and multiple tax regimes. The exact level of growth is impossible to predict, so the system must have the ability to expand easily without impacting ongoing operations and availability. Extensibility also involves the technological underpinnings that support channels, media, and innovations yet to be invented. An open platform is critical, because it enables access to the system via application programming interfaces (APIs), and a flexible architecture that streamlines the introduction of expanded capabilities as they emerge. If these desired capabilities are defined up front, the platform is more likely to have a full, long-lasting operational lifespan. More Product Data, Presented Intuitively E-Commerce innovations require delivering more information to the customer to drive purchase decisions. This data must be organized and presented so the customer can easily find and use it. Any next-generation e-commerce platform should include a robust product content management (PCM) component that integrates directly with back-end inventory and customer relationship management (CRM) systems; plus the flexibility to deliver the information in an exceptionally user-friendly format, regardless of how the customer accesses it. Open Architecture Inclusivity No e-commerce site is an island, with core functions and add-on tools ready to solve every challenge, integrated into a single package. The organization should be able to accept external input from inventory, fulfillment, analytics, and accounting systems, to make the new platform a success. The system itself must streamline and simplify processes at the technological level. The greater the power to incorporate external capabilities is built into the platform design, the faster the organization can respond to emerging trends or business threats. An emphasis on open architectures also provides flexibility throughout the re-platforming process. An organization may have a complex, highly-customized call center which meets its needs better than the one built into the new e-commerce system, or a point-of-sale system already installed and understood across a large number of retail sites. Open architectures allow multiple systems to interoperate cleanly, giving the organization the best of both technologies. 3

4 Question 3: When is it Time to Re-Platform? Our marketing team wants a new e-commerce platform every time a new consumer technology becomes available. IT never wants to move too fast. If the old stuff still works, they want to leave it alone. When we consider our operations people with their unique requirements, and executives concerned with next quarter more than next year, everything gets complicated, quickly. We have to meet somewhere in the middle to remain competitive and improve our operational efficiency. Ready to re-platform means different things to different people, and a great part of the job is simply getting everyone to agree on those needs and expectations. Many factors affect the momentum of a re-platforming initiative. However appealing they may be, the best capabilities and features will deliver no competitive advantage if the rest of the business is not prepared to be an omni-channel commerce operation. If the new platform is not part of an intentional, planned program of growth and change, the business is unlikely to realize the full potential of its e-commerce investment. The changes can be evolutionary or revolutionary. They can be as simple as expanding the IT staff to support new capabilities, or re-training existing staff members to take on additional responsibilities. The organization may be in the process of transitioning from hosted software to cloud-based architectures. Or the mandate for change can extend deep into the corporation, requiring the restructuring of management and operations, and adding incentives to increase skill levels and achieve aggressive goals. Re-platforming sometimes must be done, whether the organization is ready or not. In such circumstances, it may make sense for the business to focus on the part of the overall solution that provides the most immediate benefit. If international capabilities are most critical, then that part of the system should become the central focus. Other elements can be scheduled for a more robust deployment at a later date. Some organizations even go as far as maintaining separate e-commerce operations per channel for an extended period of time. Their strategy is to learn how to succeed in each area before unifying them in a consolidated environment. In any of these scenarios, the key is to invest the necessary time to develop the process of bringing re-platforming into the overall corporate strategy. For long-term growth, functional readiness the ability to move to a new e-commerce platform must proceed in concert with strategic readiness, which is the integration of new capabilities within a broader framework. An organization is ready to re-platform when all strategic and tactical concerns have been integrated into a single plan, with clear goals and metrics for intermediate and long-term results. Question 4: What Operational Pressures Can Impact Re-Platforming? We had big plans for our new e-commerce platform. We chose a new system that would allow us to map every online customer interaction. It was so much easier to program, create a layout, and bring in rich media tailored to each visitor s profile all the things that were difficult and slow with the previous system. But senior management put the project on permanent hold. We couldn t balance online orders with in-store inventory, and our executives wouldn t let us move until we could reconcile online and storefront orders with what was actually in the warehouse. In the end, selling more online wasn t enough to justify the ROI. In hindsight, we should have taken a more operationally driven approach. A wide range of operational issues can impact, delay, or force the cancellation of a re-platforming effort. Major stakeholders inside the organization may not be aware of the importance of re-platforming, or turnover in management may require educating a new group of executives on the urgency of the initiative. Sometimes, the organization itself is not yet ready to absorb new capabilities. Warehouses and distribution facilities may require consolidation. Vendor capabilities might need to be upgraded or new vendors selected who are better able to support the new e-commerce environment. Sometimes re-platforming comes down to a question of timing. If back-end CRM systems are being replaced, it may make sense to update the e-commerce platform at the same time, so that all individual components can operate as a whole. On the other hand, implementing or upgrading an ERP system might preclude re-platforming. Two major efforts, each with a large amount of complexity but little overlap, may be too disruptive and difficult to manage for the organization to undertake both simultaneously. In the end, the return on investment (ROI) must justify any re-platforming effort. ROI constitutes more than just the additional revenue captured by the new platform. Other operational issues should inform and impact the decision: How many people will be diverted from other tasks to finish the project? Does the organization have the knowledge to move quickly enough to outpace the competition? Should the company tackle the project now, to keep it from becoming an exponentially larger project later? As more operational issues point to the wisdom of re-platforming, the likelihood becomes greater that the payoff will be worth the time and effort. 4

5 Successful Re-Platforming: A Business-Driven Process for Growth The role of the e-commerce platform is changing and the number of channels a platform is expected to support grows constantly. The latest need may be online, mobile, or call center integration. In-store operations should be balanced with e-commerce sales that, in turn, have to be synched with sales from social media. For many businesses, omni-channel support is no longer a luxury it is critically necessary to capture all available revenue opportunities. Other major drivers are the benefits of consistent, unified views of the customer. This concept encompasses more than rich product content or accurate customer information. Many organizations seek competitive advantage by integrating marketing-oriented e-commerce elements with real-time, back-end systems that control current stock levels and in-process orders. With all of these pieces in place, it becomes easier to deliver a truly seamless customer experience. It is advisable to include executive leadership in the re-platforming process, to sponsor and drive the various teams from top down. When C-level participants overtly demonstrate their support for a project and remain involved from start to finish, the chances for success are further enhanced. Some organizations sabotage their own re-platforming by focusing too early on the nuts and bolts of the process features, price, hardware, and software. Instead, there should be a company-wide understanding of why re-platforming is necessary, what constitutes organizational readiness at all levels, what each stakeholder is responsible for delivering, specific system requirements, and how to measure success. The result will be a system that remains competitive over the long haul, rather than an expensive short-term fix. Re-platforming can be complex and difficult. It also can be one of the most productive and rewarding ways an organization can streamline its internal operations, increase revenue and profitability, and establish an enduring competitive advantage. By answering the four questions discussed above, businesses can avoid many of the more difficult challenges, and the resulting implementation plan will be more likely to deliver on the goals that the organization hopes to achieve. Can E-Commerce Platforms be Future-Proofed? Re-platforming is not an exercise in meeting current requirements. It s a strategy designed to position an organization to move into the future. The deeper this understanding extends into the organization, the greater the likelihood that the platform will have the flexibility to remain vital, productive, and profitable for years to come. Will upgraded capabilities be available in a timely manner? Is there a robust development community available for customizing existing software or integrating additional technologies into the system? Does the system require specialized skills for installation and ongoing management, or does it match the ways that technical and non-technical users already perform their jobs? Are there tools for migrating content from the last platform to the next one? How much of this process can be automated and delivered via an intuitive, point-and-click graphical interface? Each of these issues should be addressed prior to choosing a vendor and implementing the needed changes. By doing so, an organization will greatly improve its chances of building a system that matches the organization s growth objectives and success over time. About Gorilla Group Gorilla Group is an award-winning ecommerce solutions provider, combining strategy, user experience design, development, post-launch managed services and hosting to deliver complete, innovative solutions to B2B and direct-to-consumer brands across industries. A hybris Newcomer of the Year recipient at the 2013 hybris Global Partner Summit, Gorilla has unmatched expertise creating unique, functional shopping experiences that connect brands with their customers, producing better ROI through the digital channel. That s why Gorilla is a smarter species of commerce. Visit About hybris software hybris software, an SAP Company, helps businesses around the globe sell more goods, services and digital content through every touchpoint, channel and device. hybris delivers OmniCommerce : state-of-the-art master data management for commerce and unified commerce processes that give a business a single view of its customers, products and orders, and its customers a single view of the business. hybris omni-channel software is built on a single platform, based on open standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce platform companies will ever need. Both principal industry analyst firms rank hybris as a leader and list its commerce platform among the top two or three in the market. The same software is available on-premise, on-demand and managed hosted, giving merchants of all sizes maximum flexibility. Over 500 companies have chosen hybris, including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands Toys R Us, Metro, Bridgestone, Levi s, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce. sales@hybris.com Version: June 2014 Subject to change without prior notice hybris hybris is a trademark of the hybris Group. Other brand names are trademarks and registered trademarks of the E-Commerce respective companies. Re-Platforming 5