Editor's Note: This is part three of a three-part series on the advantages of an integrated, all-in-one ecommerce platform. The previous installments, "The Benefits of an Integrated Ecommerce System" and "Defining Your Integrated System Requirements," we published previously.
Last week, I examined how to prioritize your requirements for an integrated ecommerce platform. This article will address how complex the selection process really is. I'll offer a process for choosing a platform that fits your company.
This is not a review of any product. I mention a few of them from each technology group only as reference points.
Entering the Maze
As you begin your search, you will feel like a rat in a maze. Each path you go down will look the same — but different. You’ll see buzzwords that vendors use, such as "ecommerce platform," "multi-channel management," "marketplace optimization," "online stores," "convergent commerce," "multi-channel order management," "ecommerce control center," "warehouse management," and "full service shopping cart."
Don’t be intimidated. They are just shopping carts, order management systems, inventory systems, customer management systems, and financial systems.
Most vendors, in my experience, are not very forthcoming about pricing, capabilities, and integrations. As I was preparing this article, I became frustrated with many vendors that do not state prices, yet their calls to action are “buy now.” You will likely have speak with their sales representatives to obtain real cost figures.
4 Step Process for Selection
Consider this four-step process when choosing an integrated system.
- Initial research. Conduct initial research to find vendors that seem to meet your requirements — or at least most of them. Find out basics including pricing, features, and integration capabilities. Be open to a platform that integrates different applications. That is likely what you will end up with, rather than a single vendor.
- Choose preliminary vendors. Contact the most qualified vendors directly and send them your requirements. Figure out what vendors really should be on the short list by making them respond to your list. You may also need to introduce other services for integration or implementation. Try to reduce your short list to no more than two vendors.
- Review your requirements. Reset priorities based on what is really possible within the budget you have established with your two short listed vendors. You likely will compromise on some of your requirements or change parts of your approach.
- Confirm with your preferred vendors. Ask them to do a proof of concept on anything that you are concerned about before you commit. As you negotiate your contract, realize you will never have a better chance to be aggressive on pricing.
Start with your vision and the most important elements of it. For example, a vision for a single database could be this: "It stores all product, customer, and financial data and is accessible from all the various applications needed to support my business processes. It also has to scale to a fairly high level of access and quantities of parts and customers. The preferred platform will also be a hosted, SaaS model."
After a quick study of vendor websites, I believe there are just a handful of products “off the shelf” that would support those requirements. NetSuite, Oracle, IBM, and SAP offer SaaS solutions that will meet those requirements either directly or through various business partners. Venda seems to come close with the exception of financial management and maybe true integration capabilities.
Note that those solutions range from expensive to really expensive. Your revenue likely needs to be in excess of $1 million to use them. With a couple of those vendors, the revenue number is probably more like $50 million because of the implementation costs and ongoing license fees. If you are a high growth company, however, you will want to look closely at these solutions as integration has huge value.
A first year investment of at least $150,000 is a starting point for these vendors, but that also includes implementation and development costs you will incur with almost any solution. Actual ongoing costs may be 50 percent of that amount. For smaller ecommerce companies, these alternatives may be too expensive. Smaller companies may need to adjust their desire for a single database and vendor solution.
Break into Smaller Increments
If you decide to sacrifice some of your requirements for cost or technology reasons, go back and adjust your priorities. In the example above, I am trying to minimize the number of databases and ensure interoperability between various components. So, focus on the next most important requirements.
In this example, it's having a scalable system that will manage all product and vendor information, content, images and so forth for multiple online stores, marketplaces, and ad platforms. So, we are talking about an integrated system for the back end operations, including product content and data management, inventory and supply chain management, fulfillment operations, multi-channel feeds and integrations and such.
We also have a strong requirement for a robust and flexible shopping cart for our store that includes personalization and merchandising solutions. This part of the system needs to manage customer information — including order history, shopping experiences, and so forth — in a single system. I’ll call these customer-facing systems. If we can find a solution that addresses the back end and customer facing systems through integration, we will be part way there.
We’ll still need a financial solution, but ideally we can find a financial platform that will import the required data from the back end and customer facing systems.
We may therefore end up with three components in a integrated platform instead of a single system. Assuming you choose components that are truly interoperable through web services or API integrations, you will still have a functional and scalable system. You may also end up with better point solutions.
I still believe in the fully integrated solution. But in today’s world, where you already have legacy systems in place that are functional, it is a big jump to an integrated system. Many ecommerce businesses will find that their best investments are in components that can be integrated with their legacy systems or at least with one another to operate as a single system.