Considerations when investing in Digitalization – part two

In my first post I suggested some views to consider when digitalizing a B2B business. In short, I claimed that all B2B buyers are B2C buyers when off duty, and therefore expect to be served with the same online service. That is, with search and personalization features, delivering relevant and personalized data. However, how you find personalized data is different. B2B buyers is often searching for products that fits their current installation, while B2C buyers are triggered by product specs and omni features.
Written by Jesper Nordestgaard, Digital Advisory Manager, Solteq Denmark on 14.02.2022, 08:00
Considerations when investing in Digitalization – part two

I also suggested to use platforms for their intended use and invest in those that require as few integrations as possible, without falling for the temptation of buying the un-customizable platform that claim to do it all. The first makes sense to all. If you want to drive, buy a car and not a boat, why this focus on few integrations?

Think of a B2B business selling spare parts for a specific industry. If such business is on a mission to expand with a digital sales channel, they would need an eCommerce platform integrated with their PIM, EPR and freight solutions. This is the bare minimum. Later, as requirements grow, other systems may come into play like CRM, E-mail Marketing, CAM etc. All these different solutions are properly delivered and customized by different vendors, and each of them need to participate in the project to build the needed integrations for the eCommerce platform. A successful project now fully depends on each vendors ability to deliver. And, of course, the project managers ability to coordinate all this, while handling the cultural transition required by the business to gain full advantage of the new digital sales channel.

Minimizing vendors and technical complexity is by far the only reason to focus on limiting the number of integrations. In all its simplicity, integrations are simply data highways. In the example above this could be sales orders from the eCommerce platform to the ERP system, or product data from PIM to the search and recommendation engine of the eCommerce platform. A particular integration will deliver the specific set of data required by a feature and typically just that. Future changes to a feature either in the ERP or eCommerce solution will drive changes to integrations, so what is complex and costly to establish, is also complex and costly to maintain and expand. And to make matters worse, different solutions offers individual product roadmaps. In a fully integrated environment upgrading one solution to the newest version will have consequences for all other. This is technical dept and it grows quadratic with the number of integrations!

In all my years working within the field of building IT solutions, I have never seen a CFO estimating and reporting technical dept, but why is this different from the financial or environmental reporting that CFO’s deliver every day? Technical dept is the stomach punch that hits the CTO when he is tasked with a system upgrade required by the business and realize that it is nearly technically and financially impossible, because of the integration spaghetti infrastructure that has been built over the years.

Does this mean that the combined packages are the best choice? No, on the contrary. And this is exactly where this gets difficult. The above talks to one solution from one vendor, but given the complexity of any business, this is unrealistic. Managing multiple inventories, raw material purchases, complicated order flows from numerable channels, digital marketing and customer relations all requires complicated and very different solutions. Tailormade solutions is required but the CFO must always challenge the business’ desire to buy best of breed. Some digital suites offers both CMS, eCommerce and Marketplace management and ERP platforms with CRM functionalities does exists, and such systems might cover the actual need of the business. In other words, fewer systems result in fewer integrations and less technical dept.

All of this is an encouragement to consider integration requirements equal to system features when investing. Some businesses cannot live without a best of breed solutions but in my experience, there is a tendency to overinvest in features without considering the long-term consequences.

About Solteq

Solteq is a Nordic IT service provider and software house that specializes in digital business solutions and vertical software markets. Our mission is to simplify the digital world to make a better tomorrow. We are a partner who knows how to turn the digital disruption for the benefit of our customers. The key sectors in which the company has long term experience include retail, hospitality, manufacturing, industry, energy and services.

Solteq operates in Finland, Sweden, Norway, Denmark, Poland and the UK with 13 offices and employs +600 professionals.

Our specialties in Dynamics 365 Business Central, Manufactoring, Warehouse Logistics, Digital commerce, Commerce, Omnichannel, Customer Experience, Digitalization, Digital Business, Customer Engagement, Software, Business Development, POS, Robotics, Blockchain, and AI.

Learn more at Solteq.com