Update and consolidate - a guide to e-commerce technology

Wearable computers linked to an ERP platform have increased warehouse efficiency at Superdrug parent firm AS Watson

The term e-commerce may already be defunct, because in today’s connected world, all commerce is e-commerce.

Most companies, and particularly those in the retail sector, now see themselves as multi-channel providers that need to utilise every transactional method at their disposal to serve their customers and business partners. However, many of these same firms are still relying on software platforms they were using before online transactions became so critical to their business, and doing their best to integrate SAP, Oracle and Microsoft back-end databases with new web-based front-end applications that handle business-to-business and business-to-consumer channels.

“In the past six to 12 months, we have seen some of the major retailers move to update and consolidate the platforms they have had for years. But you have to look at the individual processes that support that –­ like one application to take orders, another to handle transactions –­ and the fact that so many different applications are covered by different vendors,” says Mim Burt of Gartner’s retail industry advisory services team.

Gartner estimates that the average company uses anywhere between 3,000 and 6,000 different processes to support their multi-channel e-commerce activities, some of which are handled by in-house software applications, others by bespoke software developed by third-party developers and other outside suppliers.

Because of this, most are now trying to integrate those different applications using service-orientated architecture (SOA) platforms, such as IBM WebSphere.

“There may be different technologies at the front and the back ends, but as long as the SOA platform understands the different messages from each, it can provide common integration across them,” says Rob Hailstone, software infrastructure practice director at the Butler Group. “The bigger companies tend to have full-blown SOA at both ends, and will often require their suppliers to be able to talk to them via web services as well. But at the other end of the scale, smaller companies will need a fairly simplistic adapter to provide a web services front end.”

With a multitude of systems to consider, it is inevitable that some prioritisation goes on. At the Pauline Quirke Academy (PQA), a weekend drama school dedicated to training children in the performing arts, the ability to handle electronic transactions has become increasingly essential.

PQA has installed Albany Software’s Albacs-IP payment system to process direct debit payments and pass them through to the banks. Perhaps the most important feature is the ability to produce regular automated reports that help the organisation keep track of those payments, says Fergus Sturrock, business systems manager at PQA.

“The reporting offers a tremendous amount to the business. Before we had standing order mandates that were owned by the banks ­ – when they were cancelled we would not find out for weeks,” he says. “Albacs allows us to keep track of payments more closely and improve our relationship with customers.”

As well as improving cash flow, the system has enabled the academy to build stronger customer relationships. “If something is cancelled accidentally we can quickly find out what happened and retain the client relationship,” says Sturrock.

The academy uses other software platforms for marketing and customer relationship management (CRM) purposes, but hopes to integrate its automated e-transaction strategy with its back-end systems in the future.

CRM software has been at the vanguard of changes to the way firms deploy software, often delivered as software-as-a-service (SaaS). But while CRM systems support a variety of web integration links that allow information to be passed to web-based transaction software, as well as helping organisations to manage sales and customer contact data, few offer integrated features that support multi-channel retail strategies, according to Gartner’s Burt.

“The individual CRM processes tend to be broken up into online offers, marketing campaigns, direct email and so on, though there are efforts to integrate everything with call centre and other applications, for example,” she says.

Supply chain efficiency is a key driver for organisations of all sizes, according to John Davison, managing vice president and research director in Gartner’s retail industry advisory services team.

“They are trying to connect up all the applications quickly and looking to integrate them with outside suppliers in order to streamline their supply chain,” he says.

E-commerce and supply chain integration
Supply chain platforms vital to the success of online businesses, especially those with large retail and distribution operations, include warehouse management and enterprise resource planning (ERP) systems. “There is a big movement to link e-commerce and online retailing to the supply chain in order to optimise that, but supply chain optimisation can be more difficult than it first appears,” says Angela Eager, senior research analyst at Butler Group.

Gerrit-Jan Steenbergen is global head of store systems for AS Watson, the parent company of retail giants Superdrug and Savers in the UK. In 2007 the company contracted systems integrator Zetes to deploy its 3i Voice solution at its warehouse in Dunstable in a move designed to save time and minimise errors in the distribution process. The technology uses a wireless handheld terminal, auto RFID technology, and Vocollect’s wearable computer and headset to give pickers a direct link to AS Watson’s warehouse management and ERP systems.