movefaster@commercemind.se

The art of running an e-commerce procurement

Is your company also chipping away at an RFP or RFI with a hefty Excel list of requirements attached? Then you are far from alone, and this article is for you. After reading and answering a great many procurement documents, I have a good sense of what the process looks like and how little it has changed over time. Today the process is set up so the platform and vendor can build their answers based on your requirement list and wishes, which you have been kind enough to share with a selection of platforms and partners.

Martin Zellman21 February 2022

What are your circumstances?

The process of thinking about a new e-commerce operation is complicated and requires careful thought. Just buying the same systems and platforms as the industry idol is more common than people think, but hardly always the right way forward. Instead you need to look at your company's strategic plan and understand what priority e-commerce will have over the coming years* and what you are prepared to invest in time and money.

A few simple questions you should have answers to before going out to procurement are:

  • What does the budget for e-commerce look like over the next 5 years.

  • What should the organisation around e-commerce look like? Who will be responsible for what?

  • What technical challenges do we have? How will they be solved?

  • What surrounding costs do we think a new e-commerce operation will lead to?

  • What is the ambition and growth plan? 

The goal of the exercise of thinking through this before going out to procurement is that you then have a better understanding of what you need and what it can cost in time and money. It is so much better to choose right than to choose fast. E-commerce projects put big demands on the buyer, and if you as the buyer do not know how you want it, how are the developers who will build the solution supposed to know?

What do we do about the requirement list, then?

Having a compilation of the features you want is of course useful. But even if you clean up and cut down, the list will probably still be too long to fit everything in. Depending on industry and complexity, the advice is to start basic and have control over all the features an e-commerce operation MUST have in the first step to get something out. If you wait until the site is perfect, the page will never launch. Get out a first version, test, evaluate and develop further.

How do you actually choose a platform in the jungle?

Which technical solution you need to carry out the project should be the easy part. The big question is about how you as a company are structured and how you handle the different options. And yes, how you work and what the organisation looks like matter a lot for which systems you should look at.

But also of course what your need is for customisation, and how far you are prepared to go to compromise with a more locked-in solution.

  • Open source

  • All in one (monolith)

  • Composable Commerce (headless, best of breed, this beloved child has many names)

  • And more

The options are many and there are more each month. If you are uncertain, ask for references, scan your network and dare to get help if you do not understand the concepts. It is completely impossible for an e-commerce operator to know everything about their own business and constantly keep track of the latest trends and platforms.

If I were in your shoes, how would I do it?

1. First I would review the strategy and sales goals and decide whether today's solution is scalable enough to reach my goals.

2. Switching e-commerce platform or partner is a big undertaking. I would interview staff about today's bottlenecks and challenges. Let everyone who might be affected have an opinion. It is also not a one-person job. Make sure you are a group that can work together.

3. Put together an internal list of today's challenges together with all parties who are somehow affected by the e-commerce operation, that is, logistics, customer service, sales, marketing and so on.

4. Map the challenges into areas and canvas your network for help on which systems others use and how they can handle the challenges you are facing.

5. Estimate what a project is allowed to cost to build a rough budget.

6. If you still feel uncertain, I would get help from an independent consultant who can sit on your side and help you find the right path.  

7. Once I had a good picture of my challenges, I would pick a few platforms that I think would match my wishes and ask them to show, to go into depth on whether they can really solve my problems and be sufficiently scalable going forward.

8. Every system has pros and cons. Make sure to get your concerns verified by references. Call many. The more the better.

9. What do the possibilities look like for delivering this? Do you have capacity in-house or should some external agency do the job? (If so, you should have a budget from the start and take references here too.)

Knowledge is power

E-commerce is a many-billion industry that just keeps growing, but it is surprisingly few people who really know what they are talking about. There are many who want to sell things to you, but the probability is that they do not know more than you do, they have just learned to say the right things. Ask lots of questions, because the probability is that everyone else is wondering the same thing but no one dares ask. And do not accept vague, evasive answers. You know you have found the right person when they are grateful for the questions and answer enthusiastically to share their experience.

Good luck.

/Martin  

*Note. It depends of course on whether you are a pure e-commerce operator, retailer, B2B and so on.

Martin Zellman

Author

Martin Zellman

Martin has worked with business development, product selection, procurement, vendor selection and negotiation within e-commerce for many years. Having sat in on hundreds of procurement processes, Martin contributes support and insight to management teams and e-commerce organisations on the choices that define a company's success for years after the decision is made.

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