System Solutions: A Best-of-Breed Strategy
A generation ago if you wanted to automate a catalog business you had two choices.
You could buy a catalog management system that supported all operations in the call center and the warehouse, from order entry through fulfillment and customer database management. Or you could build such a system yourself.
Indeed, nearly all the “packaged” solutions started out as in-house systems that were put onto the market to recoup the catalog company’s investment.
The systems landscape for catalog marketers looks very different today. Not only is the Internet an increasingly important sales and marketing channel that must be incorporated into your enterprise systems plan, but there now are a variety of systems to consider for running your operations, from customer relationship management applications to warehouse management systems.
The days when the all-inclusive catalog management system (CMS) was the only game in town seem to be over. Today, you can choose to implement one, two or a few best-of-breed solutions that meet your operations requirements.
- You need heavy-duty analysis? Consider a data warehouse or data mart, plus an analytical platform or a database marketing application.
- Do you place a high priority on merchandise management? There are merchandise management and forecasting tools, including some that will manage your product image for multiple channels (e.g., Web, catalog, e-mail) and even handle square-inch analysis.
- Do you want a more efficient pipeline to your suppliers? Consider supply chain management systems.
- Do you engage in many promotional campaigns in multiple media? Campaign management and workflow tools can help.
The list goes on, especially for the Web, where everything from collaborative filtering and self-help, to e-mail management and enterprise-portal systems can enhance your company’s functionality. It’s enough to get your head spinning
A Reality Check
Before we look at the steps needed to approach best-of-breed solutions, let’s pause for a dose of reality.
Unless you’re prepared to run a very aggressive, well-staffed information technology (IT) department, it’s best to stick with a single-system/single-vendor CMS. At most, consider managing two solutions, such as an order entry platform and a warehouse management system (WMS), particularly if the vendor of the order management system has extensive experience with integrating to the WMS.
The addition of a tightly bundled reporting tool could be a potential third application. But smaller catalogers shouldn’t go beyond that level of complexity. No matter how responsible your system’s vendors are, the difficulties of coordinating multiple applications over time—as all of the systems evolve and your business grows—will prove to be increasingly expensive, frustrating, time-
consuming and self-defeating if you lack a strong commitment to IT.
Ready, Willing and Able
For those catalogers willing to make the commitment (the threshold usually is crossed when you can afford at least three full-time programmers, analysts or IT professionals on staff, not counting operator-level personnel), there are several considerations in pursuing a best-of-breed scenario.
First, try to get by with as few systems as possible. This sounds obvious, but it’s possible to have one or more systems too many in your mix, if you try to optimize every aspect of the business. There’s a theoretical justification for all of the systems mentioned above, but it surely would be overkill to install one of each. If nothing else stops you from going overboard, the expense surely will. Also, each new system adds to the burden of training your system’s users.
The real question, though, is not how many systems to have, but rather what strategy to use to discern which systems make the most sense. The answer? Start with order management. Get that base covered first, then evaluate what other systems you need for fulfillment, customer database management, inventory management and so forth.
Tip: You’ll find that customer relationship management (CRM) systems can’t really handle direct commerce order management. Some support rudimentary order entry, but no CRM package is really a robust order management tool. (Some accounting systems handle order entry, too, but can serve only the needs of direct marketers with extensive modifications.)
Unless you have a very complex or automated warehouse (in which case you probably already have a WMS in place), implement the order management system before determining what other solutions you need. You may find it meets more requirements than you anticipated, but if it doesn’t, you’ll have a much clearer idea of the weaknesses that other systems must address.
In addition, virtually all order entry systems these days have Internet commerce modules. This gives you a chance to evaluate, in detail, the strengths and weaknesses of the one that comes bundled with your order management application.
It may make more sense to modify one or two systems to satisfy your unmet needs or to acquire one or more new systems to meet those needs. As a rule, the more systems you implement the fewer the modifications you should make on any of them. After all, a major benefit of the best-of-breed approach is that it eliminates the aggravation of making, testing and supporting customized code that tries to extend systems into places they were never intended to go. And the less custom code you have to add, the better.
A critical issue you’re going to have to address is the type of integration you need among systems. Tightly integrated solutions will require more programming than “loosely coupled” systems. If near-real-time connections are feasible using message-oriented middleware, they’re easier and more flexible to implement than real-time integration through application programming interfaces.
Indeed, there’s an entire niche of integration or middleware applications, but these typically are designed for companies using name-brand CRM and enterprise resource planning systems rather than the systems that catalog or direct marketing companies need.
There also are a growing number of Web-based systems that rely on Web Services integration and XML for data exchange. These tend to be newer, less mature applications, but they do offer advantages in being essentially more transparent from a platform and support perspective. (These are sometimes available only from Application Service Providers on a pay-per-use basis, although some can be purchased and run on your own servers.) However, since there’s as much diversity in server, database and programming platforms for the Web as there is for client/server or legacy platforms, Web-based systems are hardly a panacea.
Finally, you need a bona fide IT staff to manage a best-of-breed systems mix. Your complex of systems will need continuous attention. Think toddlers who either never grow up or whose rivalry takes years to subside. Are you ready for the challenges, as well as the rewards, of a big family?
Ernie Schell is president of Marketing Systems Analysis, Southampton, PA, and author of “The Guide to Catalog Management Software.” You can reach him at (215) 396-0660 or by e-mail: firstname.lastname@example.org.
Methods and Procedures
If you’re going to implement best- of-breed solutions, expect to undergo some soul-searching regarding your business methods.
Without giving up the tricks of the trade that give you a competitive advantage, consider doing some things differently if the methods or procedures of the applications you select can’t support everything you currently do. As noted, a cluster of modified systems is difficult to support.
You don’t want to make those kinds of decisions in an ad hoc fashion. Thus, a business process reengineering program should go hand-in-hand with every best-of-breed systems search.
Also, draft an enterprise systems plan. Without a high-level roadmap to establish priorities, budgets, and overall goals and objectives, not only will the key players in your organization be hindered in implementing a well-coordinated strategy, but your vendors will have a difficult time knowing which end is up.
In looking for solutions, be sure to spell out your requirements in detail in a Request for Proposal (RFP) for each type of system. The RFP should include a description of all systems currently in place, as well as those you plan to acquire. In addition, detail the needs that any specific system must address.
Of course, both the enterprise plan and your systems requirements are subject to change, but without committing them to writing you have almost no chance of succeeding in the difficult task of selecting, implementing and coordinating multiple systems.