Investing in eCommerce capabilities is no longer a choice for retailers, its essential. But the challenges of e-commerce are proving tough. According to a recent study conducted by Greenlight Commerce, eCommerce, projects are failing because they’re not planned and implemented correctly, leading to wasted time, money and resources. The harsh reality is that despite their best efforts, the study revealed retailers expect 30% of their eCommerce work to give them back no value whatsoever.
No one wants to be responsible for causing significant financial losses that arise from failed eCommerce projects. They will often point the finger at other parties to redirect responsibility from themselves. The repercussions of this blame culture can have huge implications on the efficiency and profitability of a business, alongside creating a toxic inter-department divide within the company. This is creating a major challenge for successful application of e-commerce.
As it stands, this internal blame game is costing British eCommerce retailers an average of £178,000 a year, according to the study of 100 senior eCommerce decision-makers. Shockingly, up to £3m was wasted by some retailers (3%) in failed projects.
But who’s responsible when things don’t go to plan?
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Overcoming the challenges of e-commerce: Make it a team effort
It seems an internal war is taking place between IT teams and marketing departments as to who’s to blame for projects crashing and burning. Our study found that more than a quarter (26%) of the marketing department blamed IT for project failure, while 30% of the IT team blamed marketing – a further 15% blamed the C-suite.
There’s real value when eCommerce is viewed as everyone’s problem, and therefore everyone’s opportunity. Tension can sometimes be felt in even the most mature of digital organisations, between what is seen as the purview of the online organisation, and what is considered the physical-store end of the business. The fact is that the two cannot work in silo, and the same can be said for inter-department teams. With more than three quarters of all retailers (76%) planning to increase the number of eCommerce projects in 2019, retailers must bridge the disjoint within the business otherwise they run the risk of future failure, lost revenue and lack of investment in their next IT project.
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The challenges of e-commerce: Missed metrics and opportunities
The study found that 18% of marketing departments expect to miss all key objectives in 2019, whereas over one in ten (11%) of IT respondents also think this will be the case. It transpires that 14% of all eCommerce decision-makers surveyed expect project waste due to poor planning, accounting for an average of £105,000. A further 13% expect waste due to poor execution, averaging at £111,000.
These figures paint a rather gloomy picture of the current state of eCommerce in the retail industry and the huge opportunities missed by businesses because their budgets are going down the drain. It highlighted that IT teams are crying out for budget, with 48% stating it would increase overall success in 2019, with a further 44% revealing that they require the budget be spent on bringing more skilled employees into the organisation.
These resources would be better spent on future proofing IT for not only the business, but also for the benefits of the consumer. There’s no excuse for poor planning, and no good can come from cutting corners. In today’s cut throat retail landscape, there is little room for error, and one bad customer experience can deter even the most loyal customers. However, with thorough and diligent planning and proper measurement of key metrics, risk can be minimised, and resources better distributed within the company.
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Challenges of e-commerce: Responsibility for improving metrics
While some healthy competitive tension between departments can be beneficial, it mustn’t be destructive from a consumer’s perspective. The final responsibility rests with the C-suite – the overall leadership of the company. Ensuring alignment across the business is key to the overall success of a company, never mind individual projects. Each and every project needs to have a clear business case attached to it, if there isn’t clarity on why a project is being completed, then perhaps it isn’t the right time to proceed.
Such a business case should detail what the transformed state of the business or process will look like and include metrics for how the overall project will add value to the company. Senior management needs to step in and ensure that the metrics that matter are agreed and then measured – this will ensure that the project achieves what it set out to accomplish for the business, and the signposts of success won’t move too dramatically.
Understanding the causes of failure is a foundation element for running a successful project. Senior management must ensure the rift between IT and marketing is healed and resources properly allocated between the different departments to drive success. By adopting a more vision-centric, hard-metrics project management approach, UK retailers will be able to end the current situation where 30% of their eCommerce work is essentially being thrown away.
Kevin Murray is Managing Director at Greenlight Commerce