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Platform consolidation: Time to consolidate your e-commerce platforms?

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More and more I’m hearing from clients who find themselves in a position where they’re running multiple e-commerce platforms. It’s a situation that both large enterprise companies and mid-market shops find themselves in due to corporate acquisitions or independent internal initiatives.

From a cost and resource perspective, consolidating to a single, common platform seems to make sense. But what single platform should you consolidate on? And will the time, effort, and resources required for such a large undertaking produce the desired results?

In this blog post I’d like to outline a simple 5-Step framework for evaluating which platform consolidation makes the most sense for your organization. I wouldn’t categorize this as the be-all, end-all analysis for presenting to the board, but it will get the ball rolling on internal decisions and decision making, and can be extended as needed to fit your organization’s needs.

The key is to have a framework and process for facilitating this important decision.

Platform consolidation in five steps

Step #1- Identify key stakeholders

These are the folks you’ll gather input from while performing your analysis. This is a great opportunity to revisit who your key stakeholders are and how they’re leveraging your current e-commerce infrastructure. Typically, this will include a cross section of business users, technical users, and senior management. If you have the time and means to gather input directly from customers, even better.

Step #2- Determine the key decision criteria for evaluating your platforms

Your stakeholders should identify the major and minor criteria you’ll use to evaluate your options. Agreeing on and possibly weighting your various criteria can be a time-consuming process. The trick here is to not try to boil the ocean with every single requirement, but rather come up with a manageable list that best represents the solution that will meet your business objectives. Priorities across organizations will vary, but the table below describes a typical list.

Major Decision Criteria Minor Criteria
Native

Functionality

• UX

•  Storefront

•  Configurator (Y/N?)

•  B2B & B2C features

Scalability & Stability • Reliability

• Performance

• Security

Agility • Future functionality

• Business user tooling

• Flexibility

• Support & resources

Business Disruption • Staffing

• Training

• Opportunity cost

Risk minimized • Execute consolidation

• Support platform

Total Cost of Ownership • Cost to implement & operate
Return on Investment

 

• Increased revenue

Step #3- Determine “scoring” methodology

Typically, this will be a combination of quantitative and qualitative analysis. Project Cost, TCO and ROI lend themselves to quantitative measurements summarized in terms of dollars over time. Criteria such as functionality, agility, and risk should be rated from better to worse via designations of high, moderate, or low. Finer scales or weighting can be used, although in my experience, they just make the analysis more unnecessarily complex.

Step #4- Execute the Analysis

This is the most time-consuming step of the process. Leverage stakeholder interviews and product demos to get the most accurate feedback on desired features, business impact, and risk tolerance. When building your cost model, make sure you get buy-in on assumptions from your relevant stakeholders and CFO. Remember the garbage-in/garbage-out principal; if stakeholders haven’t bought into your data inputs, they won’t be onboard with your final analysis.

Step #5- Report the Results

With the analysis complete you’re ready to build out and report your results. The sample below will give you a sense of the summary deliverable. The report along with supporting detail starts to give executive management a sense of the best path forward and points towards areas where additional analysis may be necessary.

Evaluation Criteria

Sub-criteria

Platform A Platform B Platform C
Functionality • UX

• Storefront

• Configurator (Y/N?)

• B2B & B2C features

High

Rating

Medium

Rating

Medium

Rating

Scalability & Stability • Reliability

• Performance

• Security

High

Rating

High

Rating

Low

Rating

Agility • Future functionality

• Business user tooling

• Flexibility

• Support & resources

Medium

Rating

Medium

Rating

Medium

Rating

Business Disruption Minimized • Staffing

• Training

• Opportunity cost

High

Rating

Medium

Rating

Medium

Rating

Risk Minimized High

Rating

Low

Rating

Medium

Rating

Project Cost $0.8M $1.0M $0.6M
Total Cost of Ownership (TCO) $8.5M $10.1M $9.0M

Hopefully, this simple model provides you with a general framework to do your own analysis. If you’d like more information on this framework and how it might apply to your business, please don’t hesitate to reach me here.

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Dave Greene
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11 shares
September 7, 2018
Dave Greene

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