This column, my last on systems for Operations & Fulfillment, is about transitions. In the months to come, I’ll be writing on applications, but I want to take this opportunity to look back at the evolution of catalog management systems (CMS) — a term I coined when I got started in this field in 1985. Now seems a good time to assess the current state of this business, which is facing serious challenges.
“Catalog management software” is now used to refer to systems that manage product images and data, but the term remains appropriate for the order management systems that direct-commerce companies use to process orders and to track inventory and handle fulfillment, customer service, and customer database chores as well.
Fairy tale
Catalog management systems emerged in the late 1970s as the minicomputer became an affordable business tool, and companies that had invested heavily in developing systems in-house to manage their businesses decided to recoup some of that investment by putting their applications on the market. Following their example, software companies began to produce solutions for this growing market. Throughout the ’80s we saw the emergence of more than two dozen catalog management systems, the demise of some of the weaker players, and the maturation of the leading solutions.
In the fairy tale, they all lived happily ever after. I predicted during those turbulent times that one or more large-scale software vendors would enter the field (through acquisition, most likely) and change the landscape decisively.
Real world
My prophecy, however, was wrong. I had predicted a takeover by big-fish vendors who would gobble up the small fry. That simply didn’t happen. In the real world, after a prosperous 15-year period from the late ’70s to the early ’90s, the leading CMS vendors underwent challenging and disruptive changes in ownership, while the advent of client/server platforms and then the Internet posed almost insurmountable technical challenges. At the same time, microprocessor systems gained power and respect as viable enterprise platforms.
Relatively speaking, even the largest CMS vendors remained quite small, as software companies go. Direct commerce has always been below the radar screen of big software companies, which have continued to write systems either for Fortune 1000 behemoths or for large markets where they can look forward to thousands of users. Moreover, once the Internet built momentum, everyone involved in that juggernaut said publicly and explicitly, “What we’re doing has no relationship to catalog marketing, and if it does, we’re not interested.”
The results of this attitude have been devastating to the catalog systems world and numerous other specialized software fields. The systems landscape has changed significantly, requiring us to reevaluate all previous assumptions about managing the business.
Magical tasks
For the last year or so there has been a significant slump in systems investment, but blaming it on a hangover from high-pressure investing in Y2K or first-generation e-commerce is wrong-headed. I think companies are holding back from making major systems commitments because they honestly do not know with any confidence what their systems infrastructure should look like today, and certainly tomorrow.
The confusion is partly business-related. Catalog companies have been quite successful with their Web-based marketing efforts, while retailers have also enjoyed success with Internet marketing efforts. Multichannel efforts, in other words, have proven themselves, and would seem to demand appropriate software platforms.
Unfortunately, there are very few software vendors who are prepared to support the multichannel environment. Even though some of the largest CMS vendors have positioned themselves to do so, it is difficult for a single vendor to satisfy multiple business cultures that have yet to find a coherent and common business model, let alone agree on business rules and systems to support them.
Static from supply chain and logistics circles further clouds the crystal ball, to say nothing of input from the customer relationship management crowd and merchandise management circles. In short, the business environment is in such flux that it is difficult to predict exactly what business you will be in three to five years from now.
On the technology front, there is even greater turmoil and confusion. Extensible markup language (XML) has been lauded as the panacea for business systems integration, but it will probably fail to realize that promise for years to come.
Meanwhile, most forward-looking developers are programming systems that are inherently Web-based applications, a strategy that is not reasonable to expect of any of the existing CMS vendors.
Of course, the developers of these “forward-looking” systems have no concept whatsoever of what it takes to manage a direct-commerce business. You can make a significant investment in yesterday’s solutions (at best, dressed up in a contemporary disguise), or you can wait for the dust to settle on the turbulent systems scene (if that ever happens) and trust reliable CMS vendors to adapt their platforms more aggressively to twenty-first-century programming tools and techniques (such as fully object-oriented, componentized solutions).
Happy ever after
The final destabilizing element in this area is the slowly dawning conclusion that the days of “single-vendor” solutions may be behind us. In a rapidly evolving multichannel world, it may be foolhardy if not impossible to rely on a comprehensive CMS to run the whole business. Catalog management systems will continue to play an important role, but they will have to share the stage with other players.
And if that is so, then companies will have to make even more difficult and deliberate decisions about which other systems are necessary or appropriate to optimize their businesses. Moreover, this requires spending more rather than less for both in-house IT staff and the integration and support of multiple solutions.
Faced with these daunting prospects, companies are understandably hesitant to make the requisite leap of investment, especially in a recessionary and uncertain environment. The stakes on the table have gotten dramatically higher. It’s difficult to predict what will happen, but we ain’t seen nothin’ yet.
Ernie Schell is president of Marketing Systems Analysis, Inc. He can be reached by phone at (215) 396-0660, by fax at (215) 396-0696, and by e-mail at [email protected].