March 17, 2021
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A framework for prioritizing digital transformation investments

Planning for digital transformation includes mapping out how you will spend your resources in order to achieve your business goals. Here’s our advice on how to prioritize your digital investments.

Digital transformation isn’t just updating a technology system or improving your website experience. It’s about changing the way your business functions. Technology propels organizations forward when used correctly; however, it can very easily have the adverse effect.

Internal prep work

As a change agent, you advocate for digital transformation within your organization and you’re responsible for the success of large digital projects. As you navigate where to invest your digital budget and in what order, there’s a lot to consider upfront.

  • What will make this project a success? Is it increased revenue, widespread internal adoption, or are you looking to save your customers time in the purchase process?
  • How do your customers find products What channels do they use? What specific terms? Does it vary by product, region, brand, or availability?
  • Where do you want data to be administered? Which systems can you support and administer internally with your current staff?
  • Will you need to hire additional people or an agency to support the new experience?
  • How are your customers different from your competitors’ customers?
  • What do you do better than the competition? What does the competition do better?

Answering these questions will create the initial framework you need to build out your digital investment roadmap.

Say your company manufactures a wide variety of products and has multiple brands. You source materials globally and sell your products to other businesses. You have a good read on your biggest competitor, who just launched a new ecommerce experience last year. And your executive team has taken notice. They believe you must get to market with a new system fast, or your market share will be in danger.

In many cases, the executive team has an ideal picture they want to work toward. A few years ago, the overwhelming message was, “We don’t care about digital; we just want to be listed first on Google.” Today, since ecommerce has swept both B2B and B2C, the message is, “We want an Amazon-like experience and we want it by the end of the year.”

Before you can begin answering that call, you need a significant amount of information.

Assessing your current state

First, identify all your brand assets. Taking stock of branding assets can be useful in determining the level of effort in creating digital friendly versions of these files. It’s important to know whether the fonts, images, and copy that have been developed previously will meet the needs of your new endeavor.

Identify the systems that need to be updated or replaced and the existing teams that support each system. What additional resources might you need to scale? These can be full-time employees, contractors, and/or agency partners.

With new technology comes new hurdles. Custom or older systems may not have the same set of technical requirements that a new system brings. So, it’s crucial to understand the technology framework, integration methods, and capabilities for any technology platform. Beyond these factors, planning for upgrades and support is necessary.

Answer operational questions from throughout your organization.

  • How do you fulfill products today?
  • How could that change in the future?
  • What products do you intend to launch this year?
  • What is the product launch plan for the next several years?
  • Do you have established revenue targets?
  • How many customers will use the site?
  • How many transactions do you expect per day?

A complete understanding of the current business functions can help your team implement ecommerce while limiting the operational impact on current processes. Additionally, estimating traffic and predicting revenue can help to determine license and server costs while simultaneously setting ROI expectations for the executive and finance teams.

Think about how you’ll build and maintain internal support for the overarching plan and each individual initiative. Determine how each project will help the business hit key sales metrics.

  • What level of effort will you need from your internal teams at what frequency?
  • How can you maximize your approved budget?
  • What budget considerations will need to be made in future years?

Like a house, a site will deteriorate over time if it isn’t maintained properly. I’ve personally been a part of a few projects through the years where a company has invested a significant amount capital into a project and hasn’t planned for the operational expenses that occur post-launch to keep it up and running.

Inevitably, a call comes months later when something is broken—a browser update is made, an API breaks, or IT has made internal changes to the network and now their site is down. Unfortunately, in these situations, it can cost more to get the system back up and running than to make smaller investments structured over time.

Evaluating current and future systems

To effectively sell products online, your organization must deliver consistent and accurate product information to customers. Depending on your products, this information can vary greatly.

It’s critical to understand how product data is generated within your organization. In other words, what system(s) contains the data needed to make a sale? This sounds like it should be straightforward, but it can be tricky to determine.

Talking about all these systems can be intimidating and confusing, especially to those who don’t work in IT. The acronyms are hard to keep up with and, more significantly, so is the purpose of each system. The short answer to what will work best for your business is….it depends. To begin, let’s outline the purpose of each system.

Enterprise resource planning system (ERP)

An ERP system can be compared to the central nervous system. The ERP is the root system behind the organization that serves as the vital integration between all other technologies in the organization. It can help to drive robotics in a manufacturing facility, house financial data and reporting, generate SKUs, hold supplier information, and house all sorts of other business needs depending on the set up, configuration, and platform.

When implementing a B2B ecommerce solution, integration with the ERP is going to happen 99% of the time. (In rare cases, ecommerce can be implemented for companies that don’t have an ERP.)

It’s critical to include an ERP expert during an ecommerce project. The selected individual should be familiar with the organization’s ERP deployment and configuration. There is going to be information that must be provided to the ecommerce platform that is generated from the ERP and information generated during an ecommerce transaction that has to be passed back to this system.

Ecommerce platform

An ecommerce platform allows businesses to transact with their customers online at a domain or domains that they are managing. Typically, an ecommerce platform will give a busines the ability to manage a product catalog, set promotions, accept payment, track analytics, and manage product content at its highest level. It is often integrated with one or more of the other listed systems.

As an example, once an order is placed on the ecommerce platform, payment must be accepted and tracked by the ERP. At the same time, the warehouse management system may also need to receive that order so the company can fulfill and ship to the appropriate address. These integrations can become complex, and they vary for every organization based on their own unique technology footprint. It’s important to understand your organization’s needs prior to selecting an ecommerce platform.

Product information management (PIM)

A PIM system enables organizations to manage product content in one place. In the B2B manufacturing world, businesses may need to sell their products in more places online than just their own ecommerce website. For instance, a business may sell to an audience that is already visiting an online marketplace, such as Grainger or Amazon Business.

Additionally, businesses can sell to consumers through retailer sites, such as Lowes, Best Buy, or Home Depot. In the past, users selling through retail have been required to manage multiple spreadsheets, tribal knowledge, and disparate systems to keep information flowing to their channel partners.

With PIM, businesses can ensure consistent brand messaging, fast speed to market, and syndication to multiple channels. PIM is quickly becoming a central piece of ecommerce for many B2B companies. ROI is generated by managing content in one place and syndicating the content out to multiple channels.

Content management system

A CMS is a way for organizations to manage their web content. The value of a CMS comes from having valuable content about offered products and services that can be easily administered by an organization.

In the recent past, the importance of the CMS has been debated as other systems have developed and integrations have become more prevalent. There is still great value in CMS, such as SEO assistance, URL builders, blog tools, personalization of content, email marketing capabilities, and robust design possibilities. The amount of content an organization plans to produce for its website is a large factor in determining the investment for a content management system.

Price management

Pricing is always a variable in a B2B setting. There are many situational settings that can make pricing complex and confusing. There are many examples that cause pricing challenges. For example, your sales staff may have negotiated prices with different customers over time with no real standardization. Pricing can also vary by region or volume level. Sometimes products can contain raw materials dictated by commodity prices resulting in a minute-by-minute change in price.

Due to these factors and others, it’s always important to understand how pricing fluctuates and what factors go into generating an accurate price for customers. It’s not uncommon for a pricing engine to be required and an API (or a series of APIs) set up to deliver the right price to end users. Finding out how price is maintained and stored is essential when setting up an ecommerce environment.

Additional considerations

There are many more systems that can be integrated with an ecommerce platform and its likely that your organization has one of more of these in its current ecosystem. These systems sometimes play a vital role in the organization’s technological footprint and aren’t always used in the same manner from company to company. These systems can include digital asset management (DAM), warehouse management system (WMS), digital asset management (DAM), master data management (MDM), and a litany of others.

It’s important to understand the function of each of these systems within your organization to determine the processes that must continue to take place in or be replaced by any systems or platforms that are being altered during your project.

Developing your action plan

Typically, after you’ve worked through all this, you’ll face three initial investment options. Each one can be successful in the right environment, so it’s important so identify the approach that makes the most sense for your business. This is where timeframe, budget, and expected ROI will influence your strategy.

Minimum viable product (MVP)

An MVP is the fast-to-market option. In the world of agile development, you hear the term “MVP” quite often. It requires launching with less features and less connections to your business systems. The value of building an MVP is that you have less risk. Often, this can be because your team is launching a few products, to a specific geographic region, or a subset of users.

MVP projects allow the organization to build intelligence about the product, backlog feature requestions and optimizations, and have a product up and running that can start meeting business needs as the project is progressing. The ROI for MVP is seen earlier but is typically smaller in nature. Once an MVP is launched, the organization can make the decision on whether or not additional investments will be made.

Systems and infrastructure

With this type of plan, we focus initially on building up your internal systems and infrastructure to support a future, fully integrated system. We’ll still build with an agile approach and even launch an MVP, allowing cycles of upgrades over time.

The key difference here is that the organization knows that there is going to be significant investment over time, so there is a focus on building the vehicle that will house the new platform and environment. The focus is on infrastructure and operations to begin. The time to market with this approach is slower in comparison to an MVP but allows continuous upgrades and allows for an average ROI.

Discovery project

The most thorough and data-driven of all the approaches. You can start with a deeper dive discovery project to determine the best organization trajectory. This typically results in the prioritization of multiple projects to execute over an extended period. This method is implemented in cases of full digital transformation for organizations. Selecting this path slows your time to market but increases your likelihood of ROI. The typical deliverable for this type of approach is a 36-month technology roadmap to meet business needs.

No matter the choice you make for your digital investments, its crucial to understand your company’s technological DNA makeup. What’s right for someone else may not be right for you. There is no “one-size fits all” solution for B2B ecommerce. It’s important to assess your current understanding of your customers, your business, your tech stack, and your long-term goals before embarking on an ecommerce journey.

If you’d like to speak with a consultant about prioritizing your digital initiatives, get in touch.

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