The Omnicommerce Insight Series

Key QueSTIOnS TO Include In

an e-cOmmerce PlaTfOrm rfP

Since 1997, hybris has responded to hundreds of RFPs and RFIs for e-commerce systems. Over that time, hybris consultants have evaluated and observed which questions are most critical, and which questions truly help companies select e-commerce platforms that meet and exceed present and future require-ments.

A comprehensive RFP that thoroughly covers all the critical points can assist companies in reducing costs and producing better ROI, faster. If an RFP helps a management team reach a final decision in 12 weeks rather than 16 weeks, an additional month of revenue may be added to the bottom line from the e-commerce channel. This could translate into hundreds of thousands of additional revenue dollars. And, a well-crafted RFP can ensure that a company doesn’t pay a premium for features it won’t need for the foreseeable future.

For each of the RFP questions recommended below, potential follow-up questions are provided along with appropriate an-swers, and an explanation of why that question is a valuable part of the selection process.

reach final decision in less time

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AnSwERS TO lOOK FORCompanies should look for e-commerce platforms that come pre-integrated with a wide selection of third party solutions. The best platforms will integrate with a long list of third party applications and provide a robust API for integrating with other in-house systems. These capabilities will allow the e-commerce platform to serve as a foundation for omni-channel commerce. Key system integrations to look for include order management systems (OMS), product information management systems (PIM) and enterprise resource planning systems (ERP). Some e-commerce platforms also offer multi-channel-friendly capabilities, such as PIM and OMS as add-on modules.

why ThIS IS ImPORTAnTNo matter whether the buyer operates in the B2C or the B2B world, their customers expect to interact with the company across all buying channels (online, sales reps, physical store fronts and telephone) in a seamless and integrated fashion. These customers’ expectations have been set by companies such as Best Buy and Apple that were early adopters of a omni-channel strategy. Consequently, customers are disappointed when they can’t:

Buy Online, Pick Up in a Store Buy In a Store, have Order Shipped from wherever It is AvailableBuy Online, Return to a Store

Does the platform provide a foundation for multi-channel commerce? Does it integrate with other systems (in-house and third party) to facilitate omni-channel commerce? Q1

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On the surface, this looks like a question with a simple answer that can easily be compared across different e-commerce vendors. In fact, it is a bit more complex than it appears. A follow-up question that is much harder to answer is the following: When (if ever) will the buyer have to replace the e-commerce plat-form with a new one? In order to get at this question, one has to consider the specific long-term limitations of the new platform.

Since much of the cost of the platform is front-loaded, the lifespan of the new e-commerce platform is pivotal. It may be more cost efficient to invest $500,000 in an e-commerce platform that remains in service for five years, than spending $400,000 on one that must be replaced after three years.

why ThIS IS ImPORTAnT

It’s important to consider total cost of ownership for a variety of reasons. First, the company must determine whether they can recoup the investment in the new platform in a reasonable period of time. Second, and perhaps more impor-tantly, this forces the buyer to consider the ripple effect of implementing a new e-commerce platform. It may stream-line a company’s IT infrastructure by ob-viating the need for other systems. Or, it may decrease or increase staffing needs in other departments. This is especially true when the platform extends beyond e-commerce capabilities and can be used to meet omni-channel needs.

what’s the total cost of ownership of the platform over five years? Is the e-commerce vendor willing to guarantee future upgrade costs?Q2

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In calculating the total cost of ownership, make sure to include the above listed.

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AnSwERS TO lOOK FOR

When thinking about internationalization, companies need to consider how their e-commerce platform handles different currencies, languages and localized product catalog needs. These attributes vary by country and region to meet the needs of local markets for different products and different price positioning. Companies should consider solutions that natively support multi-language, multi-currency and multi-byte opera-tions. Platforms should be architected from their inception to handle the shopping requirements of all the geographic regions an organization plans to target immediately, and in the future. It’s easy for e-commerce solutions vendors to bend the truth a little when answering this question, because it’s hard for platform buyers to verify the answer. A good probing ques-tion for this is, “What were the multi-regional capabilities of the very first version of your e-commerce platform?”

was the platform architected from the very first version to be global-ready, or was it designed for a specific market/region and internationalized at a later point in time?

why ThIS IS ImPORTAnT

Many e-commerce software vendors started delivering prod-ucts for one specific geographic region, grew organically, and then tacked on new functionality to support other new regions. This can lead to the proliferation of time-consuming and po-tentially expensive “upgrades” that should have been standard features from the start.

These capabilities should have been present from the start, and users should not have to pay extra to build out basic multi-region functionality through “maintenance fees,” that should instead be fueling product advancement and innovation. And, platforms that were singularly focused on a specific region are often developed solely through the filters of how that region conducts business. This kind of bias can permeate the entire architecture and functionality of the platform.

Platforms with retrofitted multi-region capabilities might eventually get the job done, but users may discover they require costly customization as the organization grows and expands into new international markets. Companies should expect and demand that their e-commerce platform is global-ready from the start, and requires no customization or excep-tional development effort to support new markets.

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what deployment methods are available – on premises, hosted (managed services), and on-demand (SaaS)? Is it easy to migrate between these methods?Q4

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The ideal scenario here is for e-commerce vendors to offer all three of those options: on-premises, hosted and on-demand, and provide recent successful references to prove their competence. It should be easy and inexpensive to migrate from one deployment method to another.

Some vendors will attempt to “spin” their answer to say that their software can be implemented by any of those three methods. An important follow-up question is to ask that vendor to provide examples of customers running on each deployment method, describe how the vendor was able to preserve that customer’s software configuration between deployments, and disclose how much development time and implementation costs the transition consumed.

why ThIS IS ImPORTAnT

Companies tend to have very aggressive demands for how quickly a new commerce platform can be implemented. If an e-commerce platform supports multiple deployment methods, the company making the purchase can enjoy the best of all worlds. In many cases, a new platform can be launched in as few as 90 days, using an on-demand version. An interim, on-demand implementation might not have all of the functionality that the company ultimately wants, but an on-premises deploy-ment of the e-commerce platform can always be done later as a second phase. Some e-commerce software vendors will allow their customers to apply a portion of their on-demand platform fees towards a license of the on-premises version at a later date.

The e-commerce industry is growing rapidly, and a deployment method that is suitable today might be outdated in a few years. Therefore, it’s vital for an e-commerce vendor to provide all three deployment options to accommodate changing busi-ness conditions, and to allow for flexibility in the deployment method. For example, an on-premises implementation enables more refined control and customization, but also requires more IT resources and appropriate domain expertise.

An on-demand implementation might not be suitable or cost-proportionate for a developing e-commerce channel that represents a low percentage of overall sales, and in the early phase, an on-demand or SaaS model may be more profitable. However, as this channel produces a greater percentage of sales and customization needs arise, an on-premise imple-mentation may become more advantageous.

Companies should avoid situations where they don’t have the ability to move easily between deployment methods, or are forced into a hybrid deployment model. This limitation results in sub-optimal capital utilization, and may require replacing the vendor within two or three years and re-implementing the entire e-commerce system.

Companies should demand that all three deployment models are available, that each provides flexible pricing to optimize the economics of the e-commerce channel, and that the vendor provides reference customers that are successfully using and transitioning between these models.

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anSwerS TO lOOK fOr The best platform vendors will support multiple implementation options, with wide variety of price points, vertical solutions and regional expertise, including:

Vendor Implementation This is where the software developer who has built the e-commerce platform leads the implementation. This implementation option is especially useful when the buyer requires significant customization.

Internal Implementation The buyer implements the platforms themselves. This implementation option is best suited for companies that have difficult back-end integrations, and especially when those integrations are with homegrown systems.

Third Party Implementation A third-party consulting company leads the implementation. This implementation option makes the most sense when the buyer needs localized or industry spe-cific expertise and can’t complete the implementation alone. A French maker of high-end lED televisions who has chosen an e-commerce platform developed by a US company would be well served if they chose a French implementation partner that has particular expertise with consumer electronics.

why ThIS IS ImPOrTanT

multiple implementation options will help ensure the company has enough flexibility to find a partner that meets their needs – whether geographic, industry-specific, language, timing or culturally appropriate. It will also lead to a more cost effective implementation. If four third-party firms and the developer are all bidding for an implementation project, this level of competition will likely result in the buyer securing a better deal.

who typically implements the e-commerce platform?Q5

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how does the e-commerce platform ensure integration with new customer touch points such as smartphones and tablets? Does it provide agility for compatibility with future devices?Q6

AnSwERS TO lOOK FOR

Determine whether the e-commerce vendor offers end-customers a good experience on the devices that matter most today – iPhones, iPads, Android devices, etc. A more thorough answer would include several additional points. How rapidly did the vendor support these touch points when they were first emerging? Did they offer iPhone inte-gration in 2009 or much later in 2011? What additional devices does the vendor already have built into their release plan? Is their platform future-ready to in-clude new touch points that may not be on the market yet? Does the platform support new touch points one by one (an iPhone module, an Android module, etc.)? Do they offer an API with enough flexibility to support a variety of current or future touch points?

why ThIS IS ImPORTAnT

Researching emerging devices and touch points can be overwhelming. Tablets and smartphones now account for more than 17% of all visits to online commerce sites and more than 13% of sales. This is more than double the level of a year ago and eight times what it was two years ago. The single device with the largest share of mobile com-merce, the iPad, did not exist until April 2010. New customer touch points can emerge overnight, and successful companies need to make sure that their e-commerce vendors keep pace with this rapidly changing landscape. Select a platform that provides flexibility and agility to easily adapt to industry and technology advances.

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what features are available to empower business users to configure and update the e-commerce platform without help from IT?Q7

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Almost every platform vendor will provide an administrative control panel that enables business users to add or edit products, create promotions, personalize a site experience, generate reports, complete other tasks necessary to run the day-to-day operations of an online store, and execute a multi-channel strategy.

The best platforms allow for different types of users to have distinctly different views of the control panel. A finance user might need to customize several types of sales reports while a category man-ager would need the ability to add products or edit inventory items within different categories. The key here is to enable users to view, edit and customize the information most relevant to them without complicating the interface with data that is not pertinent to their role.

Another critical back-end feature is how the e-commerce platform handles workflow and staging of content. When adding a new product line, a finance manager first approves product pricing, and then an art director approves the visual layout. In parallel, copy is routed to a translator and then to a product manager for final approval. Imagine how convenient it would be if the e-commerce platform would help create, manage, and track those tasks through a sophisticated, yet easy-to-use, workflow engine.

AnSwERS TO lOOK FOR

why ThIS IS ImPORTAnT In most e-commerce companies, IT resources are scarce. It is essential for an e-commerce platform to provide functions that allow different types of business users to interact with the system without continual support from IT. In an economy where rapid time-to-market is critical, business users need to make quick changes and update websites to stay ahead of the competition. When end-users are dependent on IT, bottlenecks can develop that slow down the company’s response to competitors and changing market dynamics.

Back-end interfaces that are well designed, easily customizable, and focused on specific tasks, will save time on user training and platform adoption. Companies should demand that an e-commerce platform removes as much complexity as possible from the user interface, without requiring expen-sive customizations, and while leveraging all current advances in technology and design thinking.When platforms can’t manage content workflow and staging, the process of updating an e-commerce site becomes much less efficient and far more prone to errors.

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anSwerS TO lOOK fOr

E-commerce developers providing the greatest value in exchange for ongoing maintenance fees and those with the best-managed research and development teams usually offer quarterly point-level releases (3.1 in Q1, 3.2 in Q2, etc.) and a major version release every 12 to 18 months. when evaluating answers to this ques-tion, buyers should look for both frequency and consistency in the release schedule.

why ThIS IS ImPOrTanT A consistent release schedule can help ensure the platform developer is addressing critical bugs and needed enhancements, and delivering innovation that keeps up with market demand to maintain competitive advan-tage. Ongoing maintenance fees are a major component in the total cost of ownership equation. The most reli-able vendors will use maintenance fees as a way to fund a continual support mechanism for their customers, and an ongoing stream of innovation and functionality improvements in the form of regular upgrades.

If a software vendor is unwilling to commit to a predictable schedule of upgrades, this may call into question the rationale for maintenance fees as high as 28 percent of the initial software license costs. A predictable consistency of releases allows users to better manage their budgets and resource planning.

what is the frequency of versions and point releases? when were the last two major versions of the platform released? when were the last three point releases? Q8

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AnSwERS TO lOOK FOR

E-Commerce companies are advised to make sure that all software modules involved in powering their multichannel or e-commerce businesses are written on a single code base. This includes the commerce front-end software and any supporting systems bundled in the plat-form, such as product content informa-tion management (PIM) software and an order management system (OMS).

which features and modules of the e-commerce platform are written on a single code base (homogeneous stack), and which are not? Is this single code base built on an open standard? And, is the open standard an industry standard (or likely to become one)? Q9

why ThIS IS ImPORTAnT

Problems can arise when one buys a solution from a vendor who has developed an e-commerce product line through acquisitions rather than in-house development. A patchwork quilt approach can result in time delays and extra costs for integrating modules built by different teams in different de-velopment centers. It can also lengthen the selection process, since different modules in the solution may be sold by different, competing sales teams within the same vendor organization. The integrations between modules written on differing code bases create complexity and cost when it’s time to upgrade to new software versions.

Platforms built on a single code base are typically more flexible, more scalable and more easily implemented. They also create less risk, lower cost, and provide a quicker return on investment. Further, if this single code base is an open standard, or an industry standard such as Java, then it is easier and more cost effective to find resources to cus-tomize the solution.

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order management system

product content information management

platform

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print

AnSwERS TO lOOK FOR

E-Commerce platform providers should offer solutions for ensuring that all content and information related to products (video, text, reviews, pictures, etc.) is easily and centrally man-aged in multiple languages, and is easily available to other channels (print, web, mobile, field representative devices, call centers, store, physical locations). It should also be consistent across those channels.

While ERP systems and traditional PIM systems are capable of managing basic, structured information such as pricing and product descriptions, they are typically incapable of supporting rich content types such as videos or photos. Vendors who offer solutions that attempt to address these issues often provide them as separate, non-integrated modules that are not pur-pose-built for the complex needs of multi-channel, multi-regional strategies.

Does the e-commerce system include an integrated module and centralized repository for managing both structured data (text, pricing information), and unstructured product information and content (video, pictures), in multiple languages? If a platform includes an integrated product information management (PIm), how does that compare with conven-tional PIm software and similar capabilities available from ERP systems?

Q10why ThIS IS ImPORTAnT

Product information management has become very chal-lenging, considering the variety of content types and channels through which content is consumed by customers. The content pieces associated with one product can include text, reviews, pictures, and video – all available in multiple languages.

Managing this variety of structured and unstructured informa-tion is made more difficult by the need to ensure it is displayed consistently across various channels – mobile, web, and print – in physical stores and in the hands of field sales representa-tives using tablets. To manage this complexity, it is best to have one repository where all content resides, so that all channels and regions can draw on the central repository for product-related content. This approach reduces the cost and complex-ity of managing product content, and reduces discrepancies among channels.

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A well-designed RFP with all the right questions and decision criteria can be instrumental in driving the success of an e-commerce implementation to produce the best ROI and fulfill all critical business needs for years to come.

Decision makers are encouraged to think about both short term and long term needs, keeping in mind that they might dictate different solutions. If so, the RFP should reflect that.

Carefully consider all other systems needed within the e-commerce infrastructure and focus on vendors who provide complete solutions with a minimal amount of added integration expense.

Think about how e-commerce can be combined with offline channels, mobile channels, and social channels to deliver more cumulative value (1+1+1+1=5).

Develop a short list of two or three vendors who offer the most flexibility, in terms of deployment options and pre-built integrations, and conduct focused, solutions-oriented discussions prior to issuing an RFP.

After receiving RFP responses, companies may want to ask their top two or three vendor choices to develop a rough prototype or proof of concept especially for custom features needed within the platform.

when a selection committee can make a quicker decision so that a new solution can be rolled out a few weeks early, it may be possible to capture potentially hundreds of thousands of dollars in additional revenue.

Summary Of Key recOmmendaTIOnS

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The 10 mOST cOmmOn e-cOmmerce PlaTfOrm rfP mISTaKeS

wording Questions in a way that Enables the Vendor to “Spin” or Obfuscate the Truth – Be as specific as possible with your initial round of questions and be prepared to engage in a follow-up dialogue to probe for more in-depth answers.

Taking the Short View – Companies should look four to seven years into the future when considering their next e-commerce platform.

Trying to Be Too Impartial – Some companies refuse to conduct in-depth discussions with vendors prior to issuing an RFP. Pre-RFP discussions are critical to producing a well-rounded RFP that meets long-term needs.

leaving the RFP Process to the Procurement Department – If the information exchange related to the RFP is the exclusive domain of the procurement group, companies will miss many opportunities for valuable dialogues with industry experts able to provide insight into the future technology needs that companies have not yet anticipated.

not having a Budget Before Issuing an RFP – If a company does not have a budget, it should first complete a high level RFI or engage an industry analyst.

not Involving All of the Stakeholders – The RFP should answer questions from all of the stakeholders including the business owner, IT, operations, marketing, channel management and anyone else that will interact with or be directly affected by the new platform.

not Asking Questions that Can Be Easily Compared – Consider phrasing questions in such a way that the answers can easily be compared across vendors: “Is the platform written on a single code base that is an open industry standard – one, two, three, or four?” One is no, four is yes. Two and three are in-between. Once they have been forced to provide a compa-rable answer, it is advisable to allow the vendors to explain their answer in a more free form fashion. When comparing the answers to dozens or hundreds of questions across vendors, companies should be sure to identify those attributes that are make or break considerations for the new platform. Vendor A might score the highest, but if they don’t have robust omni-channel support or strong data content management capabilities (PIM), then they should be ruled out.

not Doing Sufficient Due Diligence – Companies should consider speaking to analysts or consultants to determine which vendors might best fit their needs.

Inviting Too many Vendors to Bid – Sending an RFP to a laundry list of vendors can result in confusion and a slow selection process. Due diligence should be completed upfront before two or three appropriate bidders are invited to respond.

Ignoring the People Aspects – Buyers must not underestimate the importance of the people they will be working with to structure the deal, implement the solution or arrange for customizations. This might involve some soul searching, since it requires companies to think about priorities that are fundamental but hard to quantify. Will a company’s internal imple-mentation team have an easier time working with Fortune 500 vendor or a smaller, more agile vendor? Will they want to talk to Project Manager and Solution Engineers or also have access to and participation of C level executives, which may not be possible with a large company?

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about hybris, an SaP company hybris helps businesses around the globe sell more goods, services and digital content through everytouchpoint, channel and device. hybris delivers OmniCommerce™: state-of-the-art master data management for commerce and unified commerce processes that give a business a single view of its customers, products and orders, and its customers a single view of the business. hybris’ omni-channel software is built on a single platform, based on open standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce platform companies will ever need. Both principal industry analyst firms rank hybris as a “leader” and list its commerce platform among the top two or three in the market. The same software is available on-premise, on-demand and managed hosted, giving merchants of all sizes maximum flexibility. Over 500 companies have chosen hybris, including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands Toys“R”Us, Metro, Bridgestone, Levi’s, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce™. www.hybris.com | sales@hybris.com

Version: October 2013 Subject to change without prior notice © hybrishybris is a trademark of the hybris Group. Other brand names are trademarks and registered trademarks of the respective companies.