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Technology As The Basis of Successful (e-)Commerce Models

This talk at the code.talks commerce Conference in Berlin focuses on (a) why technology/IT and data competence have become the key differentiators for (e)commerce companies todays and (b) how companies can systematically increase the chances to accel in those fields.

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Technology As The Basis of Successful (e-)Commerce Models

  1. 1. Technology As The Basis of Successful (e-)Commerce Models Florian Heinemann code.talks commerce special, Berlin April 20, 2016
  2. 2. Retail companies with „Tech-/IT-/Data- DNA“ have a significantly higher likelyhood to survive and thrive… 1
  3. 3. …because they are likely to generate more money per user, visitor, customer etc. and they move along a steeper trajectory of improvement. 2
  4. 4. Retailers with a strong IT-DNA are driven by a simple, technology-centric, and very ambitious vision… 3
  5. 5. Robert Gentz (2015): “Today, we begin the transformation of Zalando. From a retail company enabled by technology to a technology company that will enable fashion platforms, connect multiple partners, markets, and business models. Today, we are saying goodbye to closed and controlled systems. Now, we embrace open platform thinking. In five years from now, we will no longer only be a retail company with a retail margin. Instead, we will become a multi-product tech company. All of this we will enable through superior technology and proprietary data.“ 4
  6. 6. Retailers with a strong IT-DNA are often guided by simple architectural principles that come from the top… 5
  7. 7. Steve Yegge interpreting Jeff Bezos (2002): So one day Jeff Bezos… issued a big mandate that… went something along these lines: 1) All teams will henceforth expose their data and functionality through service interfaces. 2) Teams must communicate with each other through these interfaces. 3) There will be no other form of interprocess communication allowed: no direct linking, no direct reads of another team's data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network. 4) It doesn't matter what technology they use. HTTP, Corba, Pubsub, custom protocols -- doesn't matter. Bezos doesn't care. 5) All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions. 6) Anyone who doesn't do this will be fired. 7) Thank you; have a nice day! Ha, ha! You 150-odd ex-Amazon folks here will of course realize immediately that #7 was a little joke I threw in, because Bezos most definitely does not give a shit about your day. 6
  8. 8. Strategic hypotheses: The likely commerce winners are striving to become a platform that enables an ecosystem. 7
  9. 9. IT-driven companies take a very conscious decision with regards to their tech stack: (a) proprietary vs. (b) standard vs. (c) hybrid 8
  10. 10. …with a natural tendency towards being “fullstack proprietary” 9
  11. 11. Organizational hypothesis (1): IT/tech is not an isolated function anymore, it’s omnipresent in every function 10
  12. 12. Organizational hypothesis (2): IT architects have to be present in every area of the organization / every part of the value chain 11
  13. 13. Organizational hypothesis (3): A shift in power is required, i.e. the “winning companies” of the future are – at least partly – run by IT and data people, not business people or similar 12
  14. 14. Organizational hypothesis (4): You will have very few skilled architects in your organization. So, maximize the impact of those you have and retain them in their position for as long as possible. 13
  15. 15. Organizational hypothesis (5): Successful IT-DNA companies configure everything to always attract the best IT talent (choice of tech stack, architects etc.). It’s a young people’s game... 14
  16. 16. Cultural hypothesis: IT-DNA companies should welcome experiments (“less wrong is the new right”) and ensure decision processes that are solely based on facts/data. 15
  17. 17. Process hypothesis: IT architects should play a key role already in the concept phase of projects. 16
  18. 18. Decision process hypothesis: Initial/setup cost is one the least relevant factors in IT/architecture/infrastructure decision. Focus on “total cost of ownership” which is mainly driven by “cost of change/adaptation”. 17
  19. 19. The (a) collection, (b) aggregation/(re)presention, and (c) actionability of proprietary (customer) data is one of the key competences in the future. 18
  20. 20. Contact details Dr. Florian Heinemann Founding Partner & Managing Director Project A Ventures GmbH & Co. KG Julie-Wolfthorn-Straße 1 10115 Berlin / Germany eMail: Twitter: @fheinemann