Industry Insights

Three Ways to Radically Streamline and Future-Proof Your Digital Commerce

By Dan Saks / June 11, 2019

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The complexity of today's digital commerce is reaching a crisis point, and many organizations find themselves in a no-win situation. Do nothing, and continue to put up with slow, manual processes that leave companies further behind in the race to win customers. Or, move forward with digital transformation initiatives, and face a host of new challenges that can impact a company's ability to drive revenue and grow.

Just how big is the problem? A recent survey found that more than three out of four CIOs —76 percent—believe that confidently managing the user experience is nearly impossible due to increasing complexity. An even higher number, 80 percent, say that it is difficult to successfully map the impact of digital performance on business. Factors like these—losing control of the user experience, an ROI that is hard to measure—are a recipe for disappointment, poor performance and loss of competitive advantage.

The Source Of Complexity In Digital Commerce

The growing complexity of digital commerce is more than just a gut feeling. Today, a single web or mobile transaction, such as subscribing to a business application, crosses an average of 35 different technology systems or components, compared to 22 only five years ago.

A single digital transaction crosses an average of 35 different technology systems or components.

But where does this increased complexity come from? To get a better understanding, let's look at a typical progression of how an organization sells in the digital economy. First, a company starts by offering a single product directly to a customer. Simple enough, but then it adds new products and sells to multiple customer segments.

Next, the company adds new channels, such as a reseller program, and then decides to sell third-party offerings that are complementary to its own products—for example, add-on software that has been developed for a company's core product. As the business grows more complex, the company also wants to create customized solutions and tailored offerings for different customer segments.

If you were to draw this on paper, it would be a mess of crisscrossing lines connecting different products to different customers and through different channels and potentially different devices, such as mobile or IoT hardware. For IT teams, the spaghetti-like diagram would be more than just conceptual, since they would be responsible for maintaining each point-to-point integration to connect these technologies.

Winning The Fight Against Complexity

To tame the complexity of digital commerce, organizations need a new approach, one that delivers more than just the ability to connect sales and the customer experience. Today's business customers expect consumer-level ease of use, with instant access and an intuitive, seamless, omnichannel experience. As such, companies need to be able to add, configure, bundle, price and bill for their own, as well as complementary, products and services. They must do this through direct and indirect channels and make them available across any device, all powered by interoperable solutions that automate each aspect of the sales and provisioning process.

At AppDirect, we call this approach multi-dimensional commerce. It’s a deeper view of the typical digital supply chain, one that takes into account all of the layers—vendors, services, channels and devices—that are quickly becoming a standard part of selling in the digital economy. As digital sales become even more complex, this approach will be the only way to meet customers' quickly changing demands.

Multi-dimensional commerce takes deeper view of the typical digital supply chain, one that takes into account every layer of digital sales.

To meet these demands, here are three ways your company can radically streamline the way it sells today—and future-proof for tomorrow.

1. Plan for a future that's increasingly hard to predict.

According to Accenture, 45 percent of executives believe that innovation in their businesses has gained momentum over the past three years thanks to new technology. Given the pace of change, the future is getting harder to predict.

With this in mind, companies need to be as flexible as possible. "One of the biggest factors that differentiates top economic performers from others is how quick and adaptable they are in setting, executing and adjusting their digital strategies," explains McKinsey & Company.

This means that companies must architect their technology stacks for maximum agility. Instead of planning for every possibility—which you can't predict in any case—build solutions and select vendors that are extensible and technology-agnostic. Your goal should be the ability to accommodate any digital use case, both now and in the future.

2. Phase out point-to-point integrations.

Digital commerce has become more complex for many reasons, but there's one factor that lies at the heart of the problem: point-to-point integrations. In fact, a recent survey found that 81 percent of IT decision makers believe that direct integrations have "created some of the biggest headaches their organizations have ever seen."

Point-to-point integrations should be a nonstarter.

Point-to-point integrations should be a nonstarter. Instead, companies should focus on unifying their solutions through API-driven platforms. This approach takes the mess of tangled lines connecting companies, customers, channels, solutions and devices mentioned above and runs them through single integration points. This approach significantly reduces complexity and makes the commerce experience manageable, for buyers and sellers alike.

3. Make it easy to bring new products to market.

As the pace of change in the digital economy accelerates, organizations no longer have the luxury of taking their time to figure out product or market fit. Companies must engage in near-constant experimentation to meet customer demands. However, in our experience, point-to-point integrations cost anywhere from $50,000 to $750,000 per product and take up to 24 months to complete. Depending on the size of your product catalog, these costs can quickly add up.

Here again, integrations emerge as a critical issue. APIs are essential, but robust developer tools, such as a developer center that makes it easy to integrate and test new products, can also help accelerate time to market while controlling costs.

Embracing The Future

Increasing sales complexity is a growing threat for companies at every stage of digital transformation. The status quo, a confusing jumble of connections between companies, channels, products and customers, is quickly becoming unmanageable—and unsustainable. By taking these steps to combat complexity now, companies can gain one of the most valuable capabilities of all: the power to future-proof their organizations.

Dan Saks is co-founder and co-CEO of AppDirect.

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