3 Considerations On Your Commerce Transformation Journey
In an increasingly challenging commerce space where order management capabilities form the backbone of a retailer’s fulfillment infrastructure, retailers, distributors, 3PL’s, and manufacturers are challenged by monolithic, legacy technology that no longer fits their needs. The traditional approach has been to rip out and replace the current technology, which means a long, expensive, and resource draining project that could take several years and create unintended disruption to operations.
It’s time to take a step back and imagine new ways to address commerce technology challenges. Where to start? Evaluate specific business functions and processes, their respective value in the commerce matrix, where you can make the best impact, and then, augment your current solutions with microservices that are purpose-built to solve those challenges.
Knowing where to start is typically the biggest challenge faced during any transformation. In a retail and supply chain context, this opening gambit has been thwarted by the level of pressure felt in recent years, the sheer pace of change, and the perceived urgency to replace everything currently in place.
The idea of “Commerce” as one large entity to overhaul is daunting. It’s unfeasible and unactionable for most to simply remove the infrastructure that’s there and replace it with what they deem the best fit for the future.
This rip and replace strategy is unnecessary and unsustainable. The daily pains that a retailer feels might evoke a feeling that the whole network is troublesome. When, really, it might be just one or two functions falling behind the curve and harming aspects of inventory management, workforce allocation, or the ability to fulfill promises to customers.
In this vein, the starting point should be an introspection – an internal evaluation of what’s currently in place, where you want to be, and the best augmentative journey to embark on based around both need and feasibility.
This evaluation should be based on a quantifiable understanding of three key metrics: value, complexity and interdependencies.
This metric sounds obvious but is often overlooked. Or, at least, not quantified when embarking on a transformation. When planning a microservice-led transformation journey of phased augmentation, value means a pinpointed evaluation of each individual service – its current impact and future potential.
An initial deep dive allows the organization to paint a picture of current pain points, where value is lost, and where they can get quick wins. From there the findings can be evaluated alongside the proposed microservices to gauge the potential value gains, time to value, and the longevity and future of continued gains.
Based on our experiences with customers, we have seen that providing accurate availability to promise (ATP), and optimization around sourcing /fulfilling an order often provides the maximum value and usually the shortest time to value. Accurate and real time ATP allows retailers to serve customers with confidence while reducing over and under selling. Pre-order sourcing optimization helps to provide the customer with accurate delivery dates. Post-order sourcing optimization reduces the total cost of fulfillment by considering multi-factor optimization. The business function improvements drive better customer satisfaction, better conversion rates, and repeat purchases, as well efficiency across commerce operations.
Another familiar pitfall retailers fall into is kickstarting an upgrade or integration without understanding where they will get value, or where they will run into integration bottlenecks. Over time, an organization’s portfolio of technology supporting commerce operations has evolved and increased in complexity in response to changing consumer demands and flexible fulfillment needs.
This complexity dictates that some solutions will be easier to replace than others, even with a phased, augmentative microservices approach. Given the respective ripple effects across the supply chain network, it is dangerous to ignore these complexities and dive in with a new solution, organization wide.
Instead, it is beneficial to review the portfolio and to channel new deployments through specific lenses first. This may be a product lens, looking at subsets of product categories, and how they react to a new microservice, and then unrolling the solution more broadly once the rules-based challenges of a new integration are understood.
Alternatively, you can apply a regional lens, where a single region is targeted first, with the same rationale of identifying challenges, identifying the best problem-solving methods, and then replicating them more smoothly across the board.
A complex omni-channel fulfillment environment creates interdependencies from a process and technology standpoint.
The technological side of the equation relates to the integrations already in place, and how a new microservice would affect the workings and effectiveness of adjacent solutions. However, the process element is often undervalued, earmarking whether a new and improved technology might call for an equally improved way of working to get the best out of that solution.
This brings a company’s workforce into the equation. The workforce lens points to employees responsible for improving customer outcomes using more precise data. Employees who operate in-store and across the supply chain will still be the filter for whether the connection between automation and customer satisfaction is optimized.
These interdependencies between processes, technologies and people all need to be considered to inform an ultimate decision around roadmap sequencing.
Starting on the Right Foot
This roadmap sequencing should be at the forefront of a retailer’s mind when deciding where to start with a commerce transformation.
Informed by interdependencies, the complexity of integration, and a true reflection of achievable value, the real power of microservices becomes much clearer.
The roadmap lays out a data-driven, bespoke and completely fit-for-purpose journey of transformation through augmentation. The first step is driven by a clear understanding of where a quick win could be achieved based on where the need is most dire, where complexity is most manageable, and where processes and people will be most positively affected. The guaranteed returns on that investment can then be channelled to the next priority area, as the journey continues, and the initial roadmap is realized.
Simply, when trying to breakdown traditional monolithic infrastructures with new entire portfolios (the rip and replace approach), this journey can’t be optimized. You may end up replacing services that are already thriving and harming processes that are already yielding value, all as part of a disruptive and expensive investment that still is unfit for the future of retail.
So, where to start instead? Retailers should turn to microservices as the best way to elevate their commerce portfolios in a bespoke and practical way. Blue Yonder’s Order Management (OMS) Microservices is purpose built to help you on your journey, beginning at the starting blocks. Get in touch to arrange your Value-Based Discovery Workshop, where we can help evaluate the three strands that will ensure you begin this transformation journey on the right foot.