Finding The Best Path Forward In Digital Commerce Transformation
Rob is a Partner at Artisan, an innovation consultancy supporting global leaders with technology strategy and solution services.
In a previous article, I shared why unified commerce is the answer for retailers seeking to keep up with the dizzying speed of change. To meet customer expectations today, organizations must think beyond a conventional omnichannel approach. Forward-thinking retailers understand that the evolution of commerce is not slowing down, and their core commerce engine must be primed to pivot quickly. In response, they are shifting from a disjointed web of channels to a flexible core infrastructure, one that allows them to unify all systems and data. Unified commerce provides flexibility and consistency across all channels, delivering the best possible experience for the customer while providing retailers with one source of truth and a 360-degree view of their customers’ interactions. One study found that retailers operating with a unified commerce model were 600% more likely to see an increase in revenue during the pandemic than their non-unified peers. It is no wonder so many organizations are setting goals to unify all systems.
While the benefits of unified commerce are clear, most leaders are asking: How do we effectively make the transformation? While every retail organization is unique, there are two common methods for evolving toward a unified commerce model. Organizations either make the change by completely replacing their legacy systems in one swift switch or by approaching the change incrementally, slowly retiring pieces of the existing system. Both options have their benefits and pitfalls.
When trying to determine the best path forward, your budget, timeline and organizational structure are critical considerations, but transformation leaders should also pay close attention to the people involved. Specifically, you must prioritize the customer relationship and the individuals and teams supporting the system internally. Seek to determine which option has the most significant positive impact on both.
Below is a summary of these two transformation paths and several considerations for each.
The Forklift Or Replacement Method
One seemingly straightforward approach is to overhaul the commerce enterprise by replacing existing system with an entirely new one. In this scenario, an organization will architect and install a new system separate from the current system. Once the new system is established, they will find the cleanest integration points between the old and new systems and “flip the switch” — turning off the old system to be retired and turning on the new.
This method is ideal for smaller, nimble organizations that can shift operations overnight to accommodate a new system. The forklift/replacement approach can be a smoother transition for technology teams to manage since it requires fewer transitional phases and partial integrations than a phased approach. Many organizations underestimate the personnel needed to handle existing systems while simultaneously establishing new ones; however, for enterprises willing to invest in contingent workers, this option allows retailers to make impactful changes in a shorter timeframe. When the migration is successful, customers notice no lag or downtime in their shopping experience and may even be impressed by the upgraded, integrated customer journey. However, if the migration plan is not perfect on the first try, the customer experience could be dramatically affected. The technology team will need to perform rollbacks and data cleansing exercises, which can lead to expensive delays.
Another downside is that the forklift/replacement is that it is typically the more expensive option because it forces the organization to fully invest in the new system while still maintaining its legacy environment. Additionally, it requires a significant companywide effort to manage such a high volume of change at once. When the individuals driving the transformation are undersupported, forklift/replacement projects often fail.
On the flip side, leaders who understand that a commerce transformation is a colossal change management effort are usually the most successful. By making strategic investments in your people and processes to prepare for upcoming changes, you will reap the rewards of unified commerce much quicker than enterprises pushing for change in silos. If a unified commerce transformation is not at the top of your company’s overall strategic goals and supported by the entire C-suite, tackling a forklift/replacement may lead to more frustration than progress.
The Incremental Approach
Another common tactic is to approach the transformation incrementally. In this scenario, an enterprise sets smaller milestones with the goal of eventually decommissioning and replacing the majority of the legacy systems, while maintaining the flexibility to retain parts of the system that function well.
This approach is ideal for organizations seeking to manage the change with their existing staff. Since new deployments are smaller and spaced out over time, there is less need for staff augmentation. This means the financial cost of an incremental transformation is typically less than a forklift/replacement. The barrier to entry is also much lower. Since organizations can roll out internal process changes in phases, you have the flexibility for necessary organizational shifts to happen over time. On the customer front, the incremental approach eliminates much of the risk to the customer experience. Retailers can ease them into the new shopping experiences while also protecting valuable customer data.
Still, the key is to ensure that the entire business is on board with the strategy from the onset. Incremental transformations by nature can take much longer — potentially measured in years or as ongoing efforts. While transformation leaders should always set clear expectations, especially around the pace and scope of the overall initiative, you will be more successful if you prioritize frequent communication with business stakeholders throughout the project.
Common pitfalls of incremental projects are the risk of waffling scope and diminishing enthusiasm due to drawn-out roadmaps. You will need to fight these tendencies with thoughtful change management strategies. Just because the change is happening more slowly does not mean you can overlook its impact on people and processes.
Choosing The Best Path Forward
Whether your organization is ready to tackle a forklift/replacement or you find an incremental approach more appealing, the key is to design the enterprise commerce foundation at the outset and incorporate feedback from all stakeholders. Once you determine the end goal, choose the path forward that most effectively protects the customer relationship and empowers the internal people and processes already working well.
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