Determining the Total Cost of Ownership of an E-Commerce System - Part 2

In this second part of our three-part series, we explain the costs of both internal and external integrations with regard to the total cost of ownership (TCO) and also show which costs can arise when customizing the e-commerce software.

Integration of existing systems such as ERP, PIM and CRM

Mid-sized and large companies often already run an ERP, PIM and CRM. Once connected, products, prices and customer data flow automatically into the e-commerce platform. Orders and customer data are fed back automatically into the ERP and CRM through the e-commerce processes.

Figure 1 Make the connection between systems as simple as possible

Depending on the system, integration is either simpler or more complex. If the systems to be integrated support common mechanisms, they can usually be connected via standard connectors. Niche systems or in-house developments have to provide suitable interfaces so that they can be integrated without major effort. Depending on the data structures, certain transformations have to take place so that the data can be used, for example, for the ordering process.

Systems with simple interfaces and clear data structures can usually be integrated with two weeks of effort, while systems with complex interfaces and unstructured or redundant data take more time.

The resulting costs therefore correspond to the complexity of the interfaces the systems provide.

Out of the box, Paloma offers various standard mechanisms to make data import and export as simple and efficient as possible. These standard mechanisms can be extended to meet even more complex requirements for interfaces to existing systems.

Integration of B2B customers

Connecting B2B partners to your own e-commerce system offers many advantages. The main advantage is that B2B customers can place orders in your e-commerce system automatically and efficiently from their own systems – a flexibility that many B2B customers ask for.

Figure 2 Directly integrating your B2B customers brings many advantages and saves costs

An e-commerce system usually allows a B2B customer's ERP to be connected via standard interfaces using common EDI formats, or already offers integrations for certain ERP vendors. This enables efficient and cost-effective integration. Non-standard connections require additional integration projects and, as with the integration of an internal system, depend on the complexity of the interface the system offers.

Common formats in e-commerce include, for example:

Paloma supports the most common formats and offers B2B customers various options and exchange formats for integrating their own ERP systems with the e-commerce platform, enabling a particularly efficient and cost-effective connection.

Customizing the e-commerce platform

Figure 3 Customizing in moderation prevents rising costs

Since internal processes don't work the same way at every company, certain requirements that cannot be covered by the product's basic features call for additional functionality. A flexible e-commerce system can essentially be extended individually and, despite such extensions, still ensures future upgrades of the base system.

Extensions to the system are usually handled in separate projects. The resulting effort corresponds to the complexity of the extension.

So, as a rule, it makes sense to choose a suitable system so that custom extensions can largely be avoided. This also reduces additional maintenance and operating costs.

Out of the box, Paloma offers all the fundamental e-commerce processes and mechanisms and is also built on a flexible model that allows custom extensions or adaptations without falling into a cost trap.

Tailor-made shop solution

Figure 4 Tailor-made solutions are major cost drivers

Unlike B2C web shops, B2B shop solutions usually don't need any further customization of the user experience or look & feel apart from appropriate branding. For end customers, however, many suppliers turn to a separate web presence in order to encourage them to buy with additional marketing content.

A tailor-made shop solution requires an e-commerce system that provides the necessary shop functionality via a headless interface. The user interface, including the desired features, is designed in a separate project with a partner of your choice, and the user interface calls the functionality provided by the e-commerce system.

This approach pays off when a special web shop presence plays a major role and yields corresponding advantages. However, these advantages usually come at the price of a relatively large investment, with an implementation time of several weeks or months, depending on the scope and on the partner implementing the shop frontend.

With Paloma, you have a free choice here as well, since Paloma itself comes with a B2B ordering platform and a B2C web shop, and all data and functions are accessible via the Paloma Headless API. It also doesn't matter whether you want to customize the existing applications or decide to go for a completely custom platform.

To be continued

In the third and final part of the series, we explain the costs of data migration, training, operating the e-commerce system and choosing the appropriate service level. To conclude, we will present an example of a simple cost calculation for a fictitious project, based on the topics covered.

Header image: Photo by Pixabay on Pexels; Figure 1: Photo by Pixabay on Pexels; Figure 2: Photo by Tom Fisk on Pexels; Figure 3: Photo by Adonyi Gábor on Pexels; Figure 4: Photo by Pixabay on Pexels Note: The images have been cropped and compressed

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