What is the best ecommerce platform for your organisation?

There is no quick and easy answer. Finding the best-fit platform requires an understanding of:

  1. Your business and technology principles
  2. Platform architecture & scalability
  3. Functional requirements fit
  4. Platform cost models
  5. Platform functional capabilities (native vs. customisation vs. plugins)
  6. Business admin control
  7. Risk management.

Read on for insights into tackling each of these…

 

First let’s start with the bad news (the honest point of view) – no platform is 100% perfect fit for your business; you will need to make compromise.

Now the good news – with compromise, you can align your business & technology needs with a platform that delivers the core functionality you need to scale your business based on target growth plans in a cost affordable way.

Phew!

So let’s get on to the nuts and bolts of how you approach platform evaluation to answer “which ecommerce platform is right for my business?”.

(1) Business & technical principles

What is driving your need to replatform?

Answering a few simple questions can often help instantly narrow the vendor field. For example, if you have a technical requirement for a SaaS cloud solution where the vendor provides application support and has a clear product development roadmap, then you can exclude platforms like Magento where you’d need to either do the critical application support in-house or via a a 3rd party technical partner.

One high-end fashion retailer I worked with focused on reducing the volume of 3rd party plugins they need to run the ecommerce business, as the maintenance cost and complexity was killing productivity (BAU budget was being spent on upgrades, QA and releases, not enhancements). This meant a platform like Shopify Plus, whilst well established in high turnover ecommerce, wouldn’t fit the bill due to the number of 3rd party apps they’d need to maintain the current level of functionality.

In comparison, Salesforce Commerce Cloud, despite having considerably higher license fees, provided a more favourable long-term solution due its native capabilities (license fees being partly offset by lower 3rd party fees).

(2) Platform architecture & scalability

Are there any systems integration needs that  must be satisfied based on your existing IT systems that will favour some vendors over others?

For example, do you have legacy ERP, OMS & WMS systems where there are existing integrations for a shortlist of vendors, with live projects proving that the platform can work seamlessly with your existing infrastructure?

This alone shouldn’t make the platform decision, but it’s a key influence. Building an ERP/OMS/WMS integration from scratch can be time consuming and expensive, so you need to consider the impact on project scope, timeframe and budget of working with a platform that doesn’t satisfy systems architecture essentials.

The other consideration here is scalability – which platforms are proven to cope with the peak volumes you plan to push through over the next 3 to 5 years. Most can tick the scalability box, but find out what the cost & service implication is of scaling. Is scaling automated and included in your base fee structure? Or will you pay for additional hardware/software and the time to scale up and down around peak events?

(3) Functional requirement fit

From experience, I don’t favour the ‘tick off 400 functional requirements’ approach to platform evaluation. So many ecommerce capabilities are hygiene factors; all platforms do them natively, they won’t make or break your business. For example “Saved items” – this type of functionality is highly unlikely to have any major impact on platform selection.

If you try and do a detailed comparison of all platforms for all your requirements, good luck! It will consume vast amounts of time and budget.

What’s a better approach?

Define business critical requirements – the functional capabilities that will make or break your business. For example, if you need to rapidly scale B2B ecommerce, which B2B features are needed to service current and future client types?

By doing this, you can exclude many platforms upfront based on fit-for-purpose with critical needs. For example, with B2B platforms like Magento 2, Shopware and Intershop rate highly in the Gartner magic quadrants.

Create a weighted scorecard before you start doing the platform analysis.


(4) Platform cost models

So, you’ve whizzed through (1), (2) + (3) and have already selected your preferred platform!

Amazing. But hold on….

Does it align with your capex and opex budgets and provide the optimal cost model over its lifetime?

In my experience, the ‘best fit’ platform is one that provides a balance of OOTB (out of the box) native functionality and affordability. I’ve worked on a high-end fashion ecommerce project where the shortlist was Magento 2 and Salesforce Commerce Cloud. M2 at face value is much cheaper (based on license fees) but when we flowed a 5-year TCO (total cost of ownership) model, M2 became more expensive by year 3 because of all the 3rd party costs e.g. AI/ML search & merchandising tool.

Key insight – don’t take cost at face value, ensure you dig down into exactly what operational capabilities you need and then model the cost of each platform accordingly to ensure you don’t under-estimate how costs scale with revenue growth.

Make sure you cover the following:

  1. Discovery costs to turn high-level scope into detailed functional requirements specifications
  2. Upfront license fees to enable development environments to be turned on
  3. Initial build cost to deliver MVP (including all resources from developers to project managers)
  4. Additional build cost to deliver the full scope
  5. Annual hosting fees
  6. Critical application support
  7. Support & maintenance for bug fixes & routine maintenance
  8. Monthly allocation for BAU enhancements (based on fixed number of developer days)
  9. Annual allocation for major projects (based on fixed number of developer days)
  10. 3rd party plugins and tools license & usage fees
  11. Year on year cost growth for each cost elements based on (1) forecast revenue (2) stretch target.

(5) Business admin control

(6) Risk management.

Useful links:

Ecommerce Total Cost of Ownership Guide by Paul Rogers (Paul is a highly experience ecommerce consultant who talks a lot of sense, and has tons of hands-on experience)