Considerations when selecting a SaaS eCommerce vendor

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With retailers putting their eggs in one basket with flexible, scalable, out-of-the-box Saas eCommerce solutions, it is important that all things are considered during the vendor selection phase. This presentation outlines key things to consider when you are selecting a SaaS eCommerce vendor/platform.

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  • But that’s a hard thing to achieve
    1. Historically platform selection is balance between flexibility and cost
    - they can be delivered as on-demand solutions or licensed/on-premise solutions
    - Some platforms come ‘out of the box’ with preconfigured functionality and integrations and others verge on a fully customisable toolkit for building your ecommerce site.
    - Customisable solutions are more flexible to develop but at a greater cost of ownership
    - on demand solutions have a lower set up cost, quicker time to market but at the expense of flexibility
    However the delivery models of SaaS is beginning to blur the boundaries between the delivery and type of solution… and hence reducing the need to offset cost and flexibility against each other
  • 2. This is how delivery models are evolving
    Because the delivery models have evolved from the old world of custom build, on-premise component based solutions with ‘CPU’ pricing.
    To Managed or SaaS solutions with lots of components rolled-into-one usage based pricing
    With on demand solutions, all these components are rolled up into a single monthly, quarterly or annual fee, usually based on some sort of volume (visitors, orders). Maintenance, upgrades, base functionality and infrastructure are all managed by the vendor.
    Custom: Applications and services are developed entirely by the retailer or a third party to
    the retailer’s specifications. Application is owned by the retailer and is not commercially available for license to other retailers. The retailer or third party is responsible
    for ongoing maintenance, enhancements, and problem resolution
    Licensed: Applications are licensed for usage from an ISV. The retailer typically pays a onetime license fee and annual maintenance fees, which provide ongoing enhancements, bug fixes, and patches. Licensed applications are supported on hardware
    platforms operated by the retailer or outsourced to a provider selected by the retailer
    Managed Services: The retailer pays a third party, often the license ISV, to host e-commerce applications. The managed service provider takes responsibility for installing software,
    hardware, and upgrades, working to achieve a negotiated SLA. Managed services
    can support either custom or licensed application
    SaaS: The retailer pays for the usage of applications from a SaaS provider. SaaS providers
    offer either hosted e-commerce solutions only, or can be an ISV that also provides
    managed services for its licensed applications as a deployment option. In both
    managed services and SaaS options, the retailer typically takes responsibility for
    customization, loading and maintaining the data, reporting and analytics, campaign development, and delivery
  • 3. In the world of SaaS the word ‘enterprise’ is becoming irrelevant
    The CIO likes the word enterprise… but I don’t
  • Because the word enterprise means different things to different people
    The CIO needs reliable, robust and low risk software, and in the old world of on-premise licensed software ‘enterprise’ software was the answer
    Very Important
    Very big
    Very secure
    Lots of clients
    But for the business users it meant:
    Reliability over flexibility
    IT admin over business user
    Integration over customization
    Security over practicality
    SaaS delivery models have removed the reliability, support and security risks away from the organisation… its about web services and SOA, a mash up of disparate solutions rather than the physical containment of them in an organisation
  • So Enterprise means nothing in a SaaS eCommerce, a true SaaS solution can scale to whatever size you want it to
  • Gartner says SaaS is becoming pretty important in the eCommerce space
    I can vouch for that from my experience
    Chances are yourselves or someone in your organisation is thinking about investing in a SaaS solution – you may even use one already and not really know it.
  • it’s a very confusing market, with lots of new terminology. It’s a sales persons dream!
    On demand: delivers capacity when the retailer needs it, e.g. Christmas peak
    Automated upgrades: Free upgrades several times a year providing additional ecommerce functionality on a frequent basis
    Merchandiser and developer control: The detachment of the infrastructure puts all focus on the business tools used to control the site, so the focus can be on merchandising and sophisticated customization. Perfect for a reactive industry like retail where differentiation and keeping one step ahead is a major success factor
    Access anywhere: being in the cloud, SaaS applications can be accessed anywhere through a browser/web connection. No need to go through an IT root canal to get VPN access.
    Multi-tenant architecture: drives cost efficiency for retailer when run on a single instance
    Low total cost of ownership: customer does not assume ownership for maintenance and installation and associated costs
    Economies of scale passed to the customer: such as IT resources for support that can be called in on an as needed basis rather than internal resources
  • And its easy to make mistakes
    So here are 6 lessons learned from my experience, I hope they are helpful to you all
  • 1. If you are thinking about replatforming onto a SaaS platform, or assessing the vendors out there it is important to define the scope of what you are actually trying to deliver
  • There is always a risk you can get down the line in a re-platform project and realise that the solution you have signed up to doesn’t do what you assumed it would, or at least not the way you thought it would
  • 2. an ecommerce or multi-channel platform means different things to different people
    Ask your IT guys, they’ll say it’s a commerce engine. Ask your web team, they want merchandising tools. Ask marketing, and they want CRM capabilities.
    I’ve had experience where people have heard about a solution we have been procuring and actually assumed it delivers something they are looking for
    Its really important to define your customer and business mission statements for any platform selection, and stick to it
    Ask the ecommerce software vendors, and they’ll tell you it does everything perfectly
    Important rules to make sure the solution or platform your are buying into meets your business needs:
    Clearly defined objectives and share this across all departments (IT, business, marketing) on what you are ‘replacing’ or ‘enhancing’
  • 3. And if you are thinking of SaaS, it’s a good opportunity to consolidate your platform ecosystem into a truly web service based one
    Look at existing processes and systems and consolidate
    Don’t get stung with additional solution procurement and integration down the line
    Preintegrations and get as many products within the same solution as possible otherwise integration becomes an issue and reduces the benefits of the SaaS offering
  • And talking of what the platform means to different departments, its really important to start any selection process with the business user at the forefront of your mind
  • 1. In the old world of ‘Platforms as a Product’ in the on-premise world there was heavy IT involvement in projects, especially due to the fact that hosting of the application was so tied up with what it could do
  • 2. But that’s all changed now. So be absolutely clear what you can do with your new platform! Define lots of business user use cases and make sure it ticks the boxes! All the things on the left should be business configurable tasks with NO IT INVOLVEMENT
    What business tools do the web team currently use to manage the websites?
    What are the pain points with these tools?
    What additional capabilities do they require?
    What level of ability to you need to develop on your new platform?
  • 2. Because the business user tools (and these could be web merchandising teams or front end deveopers) enable you to do a lot with your platform
    Web teams tend to focus on the delivery of the front end of a website. Its not surprising given how prominent it is in the organisation and how tightly coupled it is to trading and ultimately profit.
    But to create storefronts, you need tools. So make sure whatever you are going for has the tools to enable you to create unique storefronts
    So make sure you know what tools are available to your business and development teams to create your propositions
  • Which brings us onto the next point. Its really important to define what ‘out of the box’ means when selecting a SaaS provider
  • Because you never know whats in there unless you have a look, you could be in for a nasty surprise
  • 1. SaaS ecommerce platforms solution should enable a level of customization
    But be warned – customization = cost!
  • 2. Its always valuable to ask for a reference application. When assessing any ‘out of the box’ or reference application functionality, make sure you remember the 80:20 rule
    You may find that only 20% of your total platform requirements are catered for in the reference application, and 80% is irrelevant to your business needs.
    Make sure you ask for a reference application – and not just a demo! Hands on experience with the tools before your buy them is important.
    Try-before-you-buy, evaluation versions are always great way to eliminate the initial hurdle. 
  • 3. Also consider the interpretation of ‘out of the box’ requirements. Here is an example
    Detail vs high level, heres an example
    What functionality does your business require?
    What does the reference application deliver ‘out of the box’ in terms of functionality?
    What will you use out of this?
    Assess the deficit
    Get into a low level of detail certainly around data structures.
  • 4. When we talk about ‘out of the box’ we are not just referring to functionality. The tools included with the reference application are very important.
    SaaS ecommerce solutions have a reputation of being very inflexible with customisation. However in my esperience it is possible to source a platform that is kept current with e-commerce best practice…
    …But also offers the ability to differentiate with customized functionality
    SaaS platforms by nature are built on standards based frameworks and service oriented architecture offering extensible and flexible frameworks for creating applications.
    Multi-tenancy usually means a common code base, however this should not necessarily limit customization opportunities.
    It is important to assess whether the SaaS platform you are interested in supports the following:
    Standards based server side and client side scripts: allows creation of rich, customized applications
    APIs: allows outside applications to interface with your application
    Web services:
    Business configurable data model extensions: allow you to create additional attributes and databased objects without SI support
    Busess configurable logic: allows business to define and implement rules without SI support
  • 5. And also another benefit of SaaS solutions the web service nature of SaaS platforms enables quicker pre-configured integrations of external solutions
    e.g. ratings and reviews, rich media, payment service provider, analytics, CRM, self help soltions
    But
    Be wary of the difference between ‘Preferred partner’ and pre-integration. Don’t get caught out. Pre-integration in my view is a bit of configuration, a few lines of code and an on button.
    Consider the integration of one external solution into another. For example if you are wanting to measure your rich media (image zoom and video players) performance, you will need to integrate that with your analytics solution also.
    In reality: integration is never an off-the-shelf offering. Remember – Even a band-aid needs peeling, sizing cleaning the wound before you apply it to the wound. It is not magic. So take time to understand the off the shelf offering before investing in additional Third Parties
  • The on demand nature of a SaaS platform means that you should in theory by able to benefit from automated upgrades and additional functonality delivered in a rolling schedule of roadmap releases.
  • Define your platform roadmap. Be concise about what you want to deliver in terms of your ecommerce platform.
    I find a good way of doing this is to split it into three – look at your strategic business goals, and align these with business user and customer use cases relating to your platform.
    Conso0lidate these into a roadmap document and prioritise/phase accordingly
    Product roadmap release schedule
    Define your business roadmap
    Match yours against theirs
    What about third party preferred integrations?
    Is an acquisition on the horizon?
  • 2. You then have a basis to look at your technology reoadmap and plot against theirs
    Two things to note
    First that in the long term, your roadmaps may end up diverging away from one another, meaning you have to build more and more customisations in the long run. This defeats the point in SaaS – where you should get benefit of regular product developments
  • 3. Another thing to note is the time it actually takes to take advantage of new product releases. Generally a SaaS vendor will take care of upgrades of their core reference application. Anything additonal may end up either costing money to upgrade of
    If you have overcustomised your platform, it may take longer to upgrade to the same level of functionality as the reference application.
    Get a product roadmap release schedule and match it against your roadmap. Try and align it as much as possible – for example if you want a certain feature now, rather than customising it you might wait until it comes as part of the platform.
  • SaaS platforms take the performance cosiderations out of the hands of the retailer. This is great, as it reduces the need for IT involvement, infrastructure investment, monitoring, load balancing, scaling etc
  • So when a SaaS vendor says they have a global datacentre, make sure global really does mean global.
    Especially important when you are setting up multi-territory websites. E.g. if the hypothetical cloud is based in the States, and all your sites are european, then you may have problems with latency and performance
    What is my website(s) domain(s)?
    Which countries will customers access it from?
    Where are the servers?
    What about DR and backup?
  • 2. Black cloud rained on our party when we realised a. our global datacantre was actually all based in the states and content delivery wasn’t included. Can lead to massive costs in the long run. As far as I’m concerned if a vendor offers a fully fledged SaaS platform they should include CDN.
    What is my website(s) domain(s)?
    Which countries will customers access it from?
    Where are the servers?
    Is content caching included?
    Never underestimate performace considerations even on the cloud
    DR and backup
  • 3. PCI: Out of the box SaaS platforms should cater for PCI compliance. This is generally true when they have a preferred payment service provider. If you intend to deviate from the preferred provider, and do a custom integration, consider the overhead of PCI compliancy with the new integration.
    Safe harbour: this is only applicable when the vendor you pick is based in the States and they are going to be handling EU customer data on their servers.
    Accessbility: any out of the box application with a user interface should cater for Level A or AA WCAG
    Country specific compliancy: consider things like country specific regulations relating to payment, accessbility, data transfer
    Distance selling: rules around import and taxes
    VAT: How does it handle vat increases and complicated tax issues
  • It is pointless having a flexible customizable framework if your project methodology and vendor relationship does not allow you to take advantage.
    Generally we can plot your business project methodology on an axis of Agile to Waterfall
    And the build and maintenance of the system on an axis of in-house to fully outsourced.
    An agile project methodoly is well suited to SaaS ecommerce platforms. The reduced reliance on internal IT support to ‘get things done’ means quicker time to market therefore a more agile project methodology is preferred.
    SaaS ecommerce platforms provide opportunity for a hybrid model of in house and SI supported development. This means a business can focus on developing the customer facing propositions rather than relying on IT involvement.
  • Market moving, dynamic – depends on what your site can currently do
    How far can you push existing platform
    Why is this important?
    You will migrate your web platform, there is no doubt about it. You probably won’t be around in 3 years and neither will most of your team, the people that helped you procure it.
    Make your replacements lives easier
    IP – you technically don’t own any of the platform out of the box. Make sure contractually your customizations and storefronts are Interllectual Property. Cost of ownership may be low but IP gains are also low.
    Web services – takes some functionality out of the realm of your web platform (e.g. ratings and reviews, maps, rich media). Reduces the risk factor when migrating away from your commerce platform. Independent
  • Market moving, dynamic – depends on what your site can currently do
    How far can you push existing platform
    Why is this important?
    You will migrate your web platform, there is no doubt about it. You probably won’t be around in 3 years and neither will most of your team, the people that helped you procure it.
    Make your replacements lives easier
    IP – you technically don’t own any of the platform out of the box. Make sure contractually your customizations and storefronts are Interllectual Property. Cost of ownership may be low but IP gains are also low.
    Web services – takes some functionality out of the realm of your web platform (e.g. ratings and reviews, maps, rich media). Reduces the risk factor when migrating away from your commerce platform. Independent
  • Sell the value not the cost: Software sales have traditionally been focused on automation, efficiency with cost as the centerpiece. Cost is a tricky thing to sell. When you try to sell the cost benefits to a room full of people (IT people much less) you know where their thoughts go straight away – their jobs. In these bad times, none of us want to be out of work. So unless you are dealing with a senior management, downplay the cost element and instead focus on the value your solution delivers. Any one smart would figure out that a good solution will eliminate resource overheads. So do your homework on what else is bothering that prospect and mention the intangible value your product delivers i.e., “frees them up to do that other project”.
  • Considerations when selecting a SaaS eCommerce vendor

    1. 1. Considerations when selecting a SaaS eCommerce vendor Ben Adams Founder & Director www.function22.co.uk
    2. 2. A balance between flexibility and cost On Demand Out of the box Fully Customisable Licensed Software More Flexible Highersetupcosts
    3. 3. Licensed Software is “so last season” Custom Licensed Managed SaaS Component, CPU based pricing Rolled-into-one usage based pricing More retailer involvement Less retailer involvement
    4. 4. ‘Enterprise’ licensed software Number of mentions of ‘enterprise’ in a sales pitchNumber of mentions of ‘enterprise’ in a sales pitch CIOParanoiaCIOParanoia
    5. 5. What does ‘enterprise’ actually mean? To the CIO To the Business True in the world of licensed, on premise software SaaS removes these issues as it takes the reliability, support and security aspects away from the organisation
    6. 6. Enterprise means nothing in true SaaS eCommerce
    7. 7. “By 2013, 40 % of e-commerce deployments will use a complete SaaS e-commerce solution and 90 % of e- commerce sites will subscribe to at least one SaaS- based service” Gartner Inc, SaaS Impact on eCommerce, 2008
    8. 8. On Demand delivery model On Demand delivery model Automated upgradesAutomated upgrades Merchandising ControlMerchandising Control Access anywhereAccess anywhere Multi-tenantMulti-tenant Low TCOLow TCO Low RiskLow Risk Out of the boxOut of the box It’s a confusing market…
    9. 9. 6 Lessons Learned …and easy to make mistakes
    10. 10. Lesson 1 Define the platform scope
    11. 11. “It’s not a CMS?!”
    12. 12. A platform means different things to different people PIM CMS Commerce Engine Search Engine DAM Promotions engine Personalisation engine Reporting MV TestingCRM engine I.T. Commercial Marketing Web Team Finance
    13. 13. Benefits of a consolidated platform ecosystem Product Merchandising Testing Targeting Reporting CRM Social Promotions
    14. 14. Lesson 2 Start with the business user
    15. 15. The old world of platform as a product Promotions Product info Banners Sites New pages New Layouts Transactional capabilities SEO Widgets Microsites Analytics Tagging Integration Hosting Business IT
    16. 16. The new world of platform as a service Initial set up Legacy system integration Sites New Pages Layouts Transactional capabilities SEO Widgets Microsites Analytics Tagging Business IT
    17. 17. Never underestimate the bits the customer can’t see Storefronts WebsiteWebsite FacebookFacebook MobileMobile In storeIn store AffiliateAffiliate Call CentreCall Centre Business & Developer tools APIsAPIs MerchandisingMerchandising Personalisatio n Personalisatio n PromotionsPromotions TestingTesting ReportingReporting It is relatively easy to create these when you have the right business and developer tools These tools enable you to create and manage storefronts
    18. 18. Lesson 3 Define ‘out of the box’
    19. 19. What’s in the box?
    20. 20. You will never get everything out of the box Customizations Reference Application Back office Integration layer Back endBack end The split between these could be costly
    21. 21. Ask for a reference application Business requirements Reference Application Reference app functionality you actually use Think about the 80:20 rule…
    22. 22. Requirement: the platform should cater for a telco data model ‘Out of the box’ Phone Tariff Bolt-ons Client interpretation Phone Tariff Bolt-ons Insurance Bundles Sim only Customisation is costly and causes problems down the line with ‘out of the box’ upgrades
    23. 23. The best of both worlds… Standards based server side script Standards based client side script support APIs Web services Business configurable data model extensions and business logic, True multi-site and international Truly Unique Storefronts Reference application DEVELOPMENT TOOLKIT
    24. 24. …and don’t forget about pre-integrations Retailer applications and web services ATG Commerce ATG Content Admin ATG Business Control Centre (BCC) ATG Search ATG Customer Intelligence Middleware
    25. 25. Lesson 4 Ask for a Roadmap
    26. 26. Be thorough when defining your roadmap Strategic CustomerBusiness User Roadmap
    27. 27. Vendor roadmap Client requirements Customisations = cost A product roadmap does not necessarily mean more capabilities TimeTime CapabilitiesCapabilities
    28. 28. Regular relevant product releases and consider upgrade impact of customizations This usually varies according to the amount of customization you do Vendor roadmap Client roadmap TimeTime
    29. 29. Lesson 5 Think about performance
    30. 30. A ‘global’ datacentre…
    31. 31. …and don’t forget content caching and delivery CDN
    32. 32. Don’t get stung by boring compliancy issues down the line VAT Distance selling
    33. 33. Lesson 6 Shape your organisation
    34. 34. Your organisation – is it ready for SaaS? Agile Develop In-house Fully Outsource Waterfall Reduced flexibility Longertimetomarket Here you will struggle with time to market Here you will struggle with constant change This is the perfect balance between time to market and business flexibility
    35. 35. It is fashionable to migrate your web platform “you generally migrate your web platform every 3 or 4 years” Changes in leadership Newwebplatforms
    36. 36. SaaS doesn’t mean no portability
    37. 37. Picking a SaaS eCommerce vendor is easy
    38. 38. Things to look for in a vendor pitch or RFI response Focus on value and not just cost No mentions of the word ‘enterprise’ Live reference application demo deployed on their cloud Clear roadmap focused on delivery of business capability and not just gloss Pre-integrations with other Third Party solutions Developer tool-kit based on open standards Robust, global infrastruture including DR, CDN Security ‘out of the box’ Clear platform scope An agile way of working
    39. 39. Ben Adams – Founder & Director benadams1@gmail.com /in/benjadams @benadams2009 Thanks for listening! www.function22.co.uk 39

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