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. What solution do you need?
  2. Your business and technology principles
  3. Platform architecture & scalability
  4. Functional requirements fit
  5. Platform cost models
  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 need to compromise to deliver a solution within budget.

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) What solution do you need?

An ecommerce platform won’t solve all your operational challenges

First, start by defining the scope of your technology and operational challenge. Do you need an end-to-end omni-channel package that lets you sell through multiple channels, manage orders and fulfilment and provide business intelligence data/reports? Or do you need a hard-hitting ecommerce platform to fit within a wider systems architecture landscape?

This is the most important question to ask and answer. I’ve been in meetings where teams are critical of a platform being evaluated because it doesn’t fix their current WMS (Warehouse Management System) or BI issues. Most ecommerce platforms don’t provide the WMS/BI element e.g. they can integrate with a WMS and ensure the right data is provided to it and received from it, to automate digital flows like real-time stock updates and order tracking, but they aren’t the drivers for these capabilities. However, platforms like Netsuite can provide the end-to-end vision.

So it’s important to be clear on your project scope before considering eligible platforms. If you don’t know the ‘art of the possible’, I highly recommend working with an experienced ESA (Enterprise Solution Architect) to assess your business model and recommend an optimal systems landscape to align with your operational needs and growth plans. With the systems landscape defined, it’s much easier to assess which ecommerce platforms are relevant.

(2) 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).

(3) Platform architecture & scalability

Are there 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 (not to mention post-live issues not found during QA/UAT), 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?

(4) 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.


(5) 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.

(6) Business admin control

  • How much do you want to be able to directly from your mission control?
  • What capabilities do you currently rely on that need to be replicated, if not improved?
  • What configurable properties do you want direct access to?

These are just some of the questions you should be asking, and answering. Each platform has its own admin suite, and some provide a more manageable set of tools than others. Some are better suited to more technically minded web ops professionals, others provide an intuitive UI that’s ideal for ecommerce execs (e.g. Magento 2 has a lot of UI improvements).

Don’t underestimate the negative impact of giving your ecommerce team a platform that is technically wonderful but a nightmare for daily operations. It slows everyone down, not to mention adding cost inefficiency to your business. Assess the admin systems in sufficient detail before committing.

(7) Risk management

No single platform provides a utopian ecommerce solution. Each will bring its own pros and cons in relation to your specific business needs. This is why you need to identify, evaluate and manage risk. Think about the risks each platform presents:

  • Create a risk assessment table
  • Compare and contrast your contender platforms against each risk
  • Rate the business impact of each risk
  • Define a mitigation strategy for each risk
  • Agree at Steering level which risk mitigation strategies represent the biggest concerns.

Accept risk as an integral part of the process, but don’t select a platform until you understand the risks and know how you’ll mitigate them.

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).
Key questions to address when considering a replatforming project by Shopify Plus, featuring a Q&A with Paul.
Shopify Plus vs. Magento 2 Ecommerce Guide on ecommerceguide.com written by Dan Barker and Emma Forward, both experienced consultants.

Know any other useful articles on ecommerce replatforming? Let me know, i’ll review and add here if I think they’re relevant.

Thanks, James.