Every merchant would in theory want to achieve true multichannel integration. The major benefits to this range from improved customer satisfaction and reduced stock-outs and back-orders to increased average order size, more effective merchandising, and more effective brand management.
When you add these benefits together, operating with a unified view of customers and inventory can increase bottom-line profitability.
Of course, there is a trade-off here: Multichannel integration can be a frustrating and expensive exercise. And you can’t necessarily assume that partial success will bring equally incremental benefits. While it is not an “all-or-nothing” proposition, you will most likely find that you need to make a considerable investment — in time, money and energy — to begin to realize positive results.
A clean sweep
One approach to achieving multichannel integration is to migrate all channels — Web, retail and call center — to a suite of applications from a single direct commerce systems vendor. About a third of the three dozen comprehensive direct commerce order management systems have point-of-sale and e-commerce modules to support this strategy.
This is certainly a strategy of convenience, since the all-important technical aspects of integrating multiple channels have been taken care of for you by the systems vendor. The trouble is, we don’t live in a one-size-fits-all world, and you may find that the Web or the retail/POS modules in these all-encompassing suites leave something to be desired.
In retail, for instance, a simple POS terminal that serves as an electronic cash drawer is just the beginning of a long list of functions that store merchants need. These range from inventory search, staff tracking and management, and multiple tenders (cash and credit card, for instance, or multiple credit cards) to automatic discounting, label production, and even purchasing, receiving and inventory transfers. If the retail module included with the integrated suite doesn’t have what you need, the value of the integration is severely compromised.
The examples on the e-commerce side could be even more extensive. While order management suite vendors have made great strides in the past year or two in the functionality supported by their Web store management modules, it is unrealistic to expect them to equal what e-commerce specialists are able to provide. After all, even the specialists have a hard time keeping up with each other.
Best of breed
The opposite strategy is to go for “best-of-breed” systems for retail, e-commerce and call center management/fulfillment, and consider the integration of these solutions as a separate project.
Be forewarned: The demands of maintaining multiple integrated applications from different vendors require a substantial IT staff. As a rule of thumb, you’ll need one person per application, plus at least one more for managing the integration platform.
It is also likely that instead of trying to link these applications together by themselves, you will make use of an “integration platform” such as ChainBuilder from Bostech (www.bostechcorp.com), which offers a Java-based solution that can create a services-oriented architecture (SOA) even from legacy applications that are not inherently SOA systems.
Adding to the demands of maintaining such a best-of-breed environment is the need to manage upgrades of each of the components in a timely fashion. Moreover, some of these “upgrades” may entail changes in the fundamental business logic of the system. This in turn requires a reworking not only of how that application fits with its companions, but also how the logic of the integration should be worked out.
In most cases, the databases that the business depends on (orders, customers, inventory) will reside in the direct commerce/fulfillment application, with the e-commerce and retail components serving as “satellites” to the direct commerce core. This may prove difficult if not impossible, however, if the core application is hosted at the vendor site, or is a software as a service (SaaS) solution, in which case you need to consider an alternative “home base.”
The IPR option
Such an alternative might also be attractive when an additional component is added to the mix: a warehouse management system, which is essential for high-volume operations that need to support significant automation.
An alternative architecture would also be appealing to those direct merchants for which the Internet is quickly overtaking the call center as the driving force for growth. As more and more of the IT budget goes to supporting an increasingly robust e-commerce platform, it is tempting to consider adapting the Website to support a call center interface on special Web pages.
In all of these cases, the integration platform serves two essential functions: order processing, and maintaining the primary enterprise databases for customers, inventory and orders. As the diagram to the left suggests, this integration platform can also serve as a reporting platform — particularly if, in addition to managing transaction-oriented databases, it is also used as a data warehouse or data mart repository. Serving the purposes of integration, processing and reporting, or IPR, this central platform could also serve as a business rules repository for managing how the related nodes of the business operate (retail/POS, e-commerce, WMS).
There are a few prime candidates for an IPR platform. The first is BusinessFlow from Mainstreet Commerce, built on Microsoft’s .NET Services-oriented architecture. The system includes a comprehensive set of order entry, e-commerce and fulfillment functions — hence its inherent suitability for handling order processing, one of the three basics of IPR.
BusinessFlow can serve as an integration and business rules platform that can support complex policies across all sales channels. It can also define all of your product offerings at any level of granularity, from companywide down to a specific configuration for a specific product.
For reporting, BusinessFlow’s job system allows a non-developer to write SQL-like queries across every object such as sales, orders, payments, customers and items — without knowing any SQL. Any user can generate a report with granular transaction level detail.
The second IPR candidate is Jagged Peak, whose Edge system can also serve as a full-fledged order entry application. It excels at managing orders from a wide variety of sources and for a number of purposes, including e-commerce, EDI or call center orders, demand for marketing material distribution, digital asset download requests and customer club member registration, among others.
Edge, a J2EE Java-based system with a browser interface, draws information from multiple business process portals using APIs, so you don’t have to manage a dozen different systems to manage a dozen different types of demand. Its demand rules module sets and controls demand for catalog items, allowing you to establish the parameters for each item, including user accessibility; determining quantities that can be ordered; setting prices; applying discounts; and running promotions. Affiliate features allow you to support commissions and credit sales to appropriate sources.
A logistics management module lets you manage a network of warehouses and their performance rules. You create and administer customer shipping rules and the logic for routing orders to providers and/or warehouses anywhere in the world. This enables you to optimize inventory, manage shipping costs, and improve delivery performance.
Edge also has a content management module that allows you to dynamically create, edit and publish Web pages and content — all of which can then be reviewed before final posting on live sites. You can manage reporting from the system’s SQL/Server or Oracle databases, or via a third-party reporting tool that can be integrated into Edge and updated as often as you like.
Other issues
Both BusinessFlow and Edge have customer communication and CRM functionality that can be used for both inbound and outbound customer communications. This is an often neglected area that an IPR platform can help to unify and manage.
On the inventory side, a good IPR platform should be able to handle some content management functions, as do both of these solutions. This enables you to eliminate redundant data entry, and specify business rules for what data appears with which items under what circumstances.
A key challenge of multichannel integration is managing such issues as customer loyalty clubs, serialized gift certificates and cards, and gift registries. These, too, can be set up via the business rules in a robust IPR application, which can not only drive how they are managed in the store, online or in the call center, but also keep track of the data and activities these types of programs generate.
Last but not least, a multichannel business presents a particularly challenging environment for purchasing and demand tracking, since each channel has its own typical and actual demand curves. While there aren’t any optimum systems that handle demand tracking in all three channels, with a solid IPR platform you can implement more than one merchandise management system, if needed. And you can use the IPR to coordinate their results.
But remember: There is nothing about multichannel integration that is either easy or cheap — or quick, for that matter. You will want to have a good project manager assigned to this to make sure that all of the pieces are put into place in a timely fashion. Otherwise, it can become a moving target that is almost impossible to nail down.
Ernie Schell is director of Ventnor, NJ-based consultancy Marketing Systems Analysis.
The three main approaches to overcoming integration issues:
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Migrate all channels — Web, retail and call center — to a suite of applications from a single direct commerce systems vendor
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Go for “best-of-breed” systems and consider the integration of these solutions as a separate project
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The IPR option — when a warehouse management system is added to the mix