[The following excerpt is from the hybris software white paper titled, Building an ROI Model to Evaluate Your B2B E-Commerce Initiative – Ed.]
Before a company selects a new e-commerce platform, business stakeholders and the technology implementation team should establish a consensus on all strategic objectives.
Most companies create a business case that highlights the investment required compared to the cost savings and revenue improvements of a modern e-commerce platform. Then, they input the expected benefits into the annual budget process
to ensure a full business commitment to the new commerce model enabled by the platform.
Two major categories feed into this business case and
- Hard cost savings such as reduced order processing costs, lower cost of goods and supplies, and increased efficiencies in sales and marketing expenses.
- Revenue gains that can be expected from increased agility, real-time updates (products, pricing) for customers, and improvements in the customer ordering experience, including self-service.
Total cost of ownership can vary widely from one platform to another. For example, the total one-time price is strongly related to the operational efficiency of the platform, because modern platforms require less hardware and a smaller license. Cost of implementation, maintenance, and upgrades is greatly influenced by architectures that are based on open standards.
Enterprises should design a customized ROI model to address the uniqueness of the industries and segments they serve, the stage of their e-commerce channel evolution, and the mindsets of the company’s key executives. When building an ROI model, some companies will gravitate towards salesforce productivity and effectiveness, while others will assign more value to the associated revenue gains. The following sections address both cost and revenue considerations.