The Top Four Impacts of Cloud-Based E-commerce Applications

The ability to lower costs, accelerate deployments and respond quickly to market opportunities and challenges are just a few reasons why so many IT leaders are leveraging cloud-based e-commerce applications. Given the variety of solutions, IT leaders must research their options carefully in order to select the one that best meets their needs. Following are the top four impacts of cloud computing on e-commerce applications and steps IT leaders should take during their evaluation process.

Cloud-based e-commerce applications allow companies to respond quickly to market opportunities and challenges – as long as they engage IT

It’s easy for business leaders to focus on the benefits of cloud computing without considering the time and effort involved in implementing a viable solution. However, whatever cloud computing solution they select,  the application will need access to customer data, product data, fulfillment systems and other operational systems in order to support e-commerce. Cue the IT team.

As we covered in our recent blog post, Cloud Computing Investments and the “New IT,” today’s IT staff is being tasked to serve as trusted business advisors to their organization’s customers, partners and executives. Prior to an organization investing in a cloud solution, the IT team must clearly outline the business goals, objectives, costs and benefits. They should also review what systems and data must be integrated (i.e., fulfillment systems, customer service systems and customer and product data sources) in order to achieve the goals. Finally, IT should explain how failing to integrate other systems will impact overall business results.

Cloud-based e-commerce applications enable IT and business leaders to evaluate new opportunities without large upfront investments

With smaller capital expenditures (CapEx) needed to launch a site, combined with operational expenditures (OpEx) that are typically billed on a “pay as you go” basis, organizations can shift their business online with minimal investment risk. A faster time to deployment allows them to streamline time-to-market for their products and services.

For companies looking to expand into new geographical regions or test an e-commerce business model with a new brand or product line, or as a proof of concept (POC), cloud-based e-commerce applications provide them with flexibility and scalability at a reasonable investment. However, it’s important for IT to evaluate the total costs involved in implementing a cloud solution including: integration, customization requirements, migration costs, e-commerce seasonality and peak loads and scalability.

Consumerization of the online customer experience requires closer scrutiny of solution offerings

While many B2C companies use e-commerce platforms for direct sales, B2B organizations are also leveraging them to add transactional capabilities to their informational sites. In addition, the online experience is becoming more “consumerized,” meaning that B2B buyers expect a retail-like customer experience – even when visiting non-retail sites. Cloud solution providers (CSPs) that focus solely on creating retail models are often not well-versed in B2B requirements which can be more complex. As a result, their offerings don’t include B2B functions, such as easy entry of large orders and repeat orders, segmented product catalogues that are based on a client hierarchy and buying privileges, configure price quote capabilities and extended payment terms. IT leaders have an unprecedented number of CSPs from which to choose. However, they need to carefully evaluate ones that have experience meeting their industry-specific needs, whether it’s B2B, B2C, or a combination of both.

IT leaders must understand the pros and cons of cloud-based ownership models in order to select the right solution for their needs

In addition to selecting a cloud-based e-commerce solution, IT leaders are tasked with choosing from a variety of ownership options. For example, an organization can use an Infrastructure-as-a-Service (IaaS) model to run its application package or custom e-commerce software. It can use a managed service provider to manage its applications or create custom e-commerce software on IaaS. Or the organization can subscribe to a Software-as-a-Service (SaaS) e-commerce application. Each of these options must be mapped back to the organization’s financial resources and technology requirements. IT leaders also need to determine the features and functions they require for their organization’s online selling initiatives. They should collaborate with an experienced CSP to develop a solution that supports their organization’s long-term online sales objectives, and outlines current and future technology needs. Finally, IT needs to evaluate the total cost of ownership (TCO) of their cloud model versus the traditional licensed approach for a pre-determined period of time to evaluate its ROI. The HOSTING team of cloud experts work with in-house application developers to design and build cloud-based e-commerce environments that can help organizations lower their costs and take advantage of new business opportunities. Contact us to discuss your specific e-commerce needs.

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