Technology Powered E-Commerce Operations

by Mrinal Chatterjee - CTO & Founding Member, ShopClues.com

E-commerce companies presently face unique complexities of running their operations. Traditional Enterprise Resource Planning (ERP) solutions fail to deliver their perceived results in this environment. There are several different ways in which e-commerce companies operate. While some of them are only technology providers where the seller has to take care of all aspects of online selling, others are typical inventory led e-commerce companies where they do everything starting from building technology to warehousing, procuring and even delivery.

Today, one of the most challenging aspects for an e-commerce company is to have their enterprise resources integrated into their operational technologies. Let us take a simple example of an e-commerce company operating as a pure play marketplace that does the first mile pickup of the product from the seller’s location. In this case, the pickup vehicle and the staff involved in the same becomes the critical resource for this part of the operation. Thus, it becomes necessary to know the availability of the staff. This requires shift planning and employee attendance data as an input to this platform. The vehicle specs (carrying capacity, both weight and volume) and their availability (not out for service, etc.) are needed to do first mile pickup planning. All these inputs are used to feed into the algorithm to do pickup scheduling and planning. Then there is metrics tracking such as time taken for pickup, fuel usage data, pickup employee staff’s efficiency, and others which needs to be done to further optimize the operations. This is just one of the hundreds of scenarios that e-commerce companies go through as a part of their daily operations.

Integration is the Key                                                                                                             The traditional enterprise resource management systems are either not used in e-commerce companies or they develop custom solutions or use out of the box ERP solutions like enterprise resource tracking systems and others. By this I mean employee data, attendance data, leave data, vehicles and other asset tracking, availability, etc. To truly do resource planning, companies have developed their own solutions based on the nature of the business.

As traditional one-stop ERP solutions do not work in these e-commerce companies, they tend to acquire different best of the breed point solutions and then integrate them. Also, today with the wealth of open source platforms available for point solutions, companies are bringing the challenge of maintaining such softwares and integrations, in-house. This approach in the short run does increase their cost of operations, but in the long run proves to be much more economical once they factor in the speed to market and adapting to market needs. Also, given the seasonality in online sales, you will need to have big data or analytics solution that can predict as the volumes increase and also alert you on where to add additional resources. This may not just mean manpower. It could be hardware resources that need to run during peak operations, additional vehicles or additional space etc. On top of these, there are revenue-generating resources like warehouse space, vehicle banners, and others. You need to link the cost of this to potential revenue generating opportunities. That means ERP needs to link into marketing and sales tracking systems to ensure your resources are optimally generating revenue as well. There are no typical industries and there is no typical company. Each organization has its own unique needs, challenges and opportunities to manage enterprise and deliver optimized results while staying agile in the ever-changing needs of the market. Just because one solution worked for one organization does not necessarily mean it will work for your business.

Change is Inevitable                                                                                                           In the current scenario, the prime challenge for the CIOs is to not only understand technology solutions and platforms, but also to have a deep understanding of business, operations, goals, challenges, planning to make the best solution choices. CIOs have to keep in mind that today’s requirement is going to be tomorrow’s headache. What I mean by that is, these systems will constantly require changes, as business, processes and technology evolve. Selecting the right place to start is critical; selecting the right technology partner is crucial; having the right technology and project/program management skills in-house is equally critical.