Midmarket organizations face unique challenges when they invest in technology. Unlike their enterprise counterparts, midsize firms often lack the capacity to absorb cost overruns. So, when a project goes over budget, it can cripple the organization’s ability to turn technology investments into better business outcomes.
I’ve helped some of the world’s fastest growing companies achieve digital transformation, so I appreciate the role budget plays in the success of ecommerce initiatives. To keep your digital commerce project on track, your midmarket company needs to focus on priorities and identify how the technology can generate business value.
Budget smart: tips for midmarket decision makers
Investments in commerce platforms and other significant technologies have the potential to radically transform a midsize company’s business outlook. Frequently, the organization’s strategic goals hinge on the selection and implementation of key technologies.
With so much at stake, a failure to properly budget for a technology initiative can have dire consequences for the business. In the case of commerce technology, poor budgeting can even jeopardize the company’s relationship with its customers, especially if the platform falls short of customer expectations or unnecessarily complicates the buying process.
As an IT decision maker, there’s no room for error – you have to get it right the first time. In my experience, there are several factors your midmarket organization needs to consider when budgeting for a commerce platform or other major technology initiative.
1. Consider enterprise impact
When it comes to IT investments, midmarket organizations need to think like their enterprise counterparts. Here’s what I mean: Rather than solving for a problem today, your midmarket firm should consider the enterprise impact of its IT decisions. Because IT investments often touch the entire business, it’s important to think about how decisions will affect business operations and the organization’s long-term trajectory.
For example, it’s common for organizations that need ecommerce technology to select a cloud solution simply because it’s the fastest way to get their commerce programs off the ground. Essentially, the cloud is a hammer that drives a short-term nail, i.e. the organization’s need to rapidly deploy a digital commerce solution. But while a cloud solution is often the right answer, it isn’t just about speed – the cloud delivers additional business impact in the form of agility and responsiveness to changing market conditions.
Midmarket IT investments should never revolve around finding solutions to hammer short-term nails. Instead, they should focus on solving business problems your organization can skewer with the nail. In the case of an ecommerce solution that’s opening a channel for increased revenue, reduced costs and better customer engagement. By evaluating technology investments in the context of business, you can maximize the value of the investments and prioritize technologies that have the most benefit for your organization. In the end, a cloud solution may well be what you select, but by considering the impacts, you’ll know you selected it for the right reasons.
2. Be careful about investing in customized user experience (UX)
Midsize organizations usually lack the resources to invest in significant user experience (UX) research and design. On rare occasions, a customized solution is necessary to address desired APIs for a project. But an out-of-the-box solution is the better option for most midsize companies.
The process for selecting an available solution starts with determining the features that customers like and use. From there, you can leverage a sophisticated, well-designed cloud solution built around customer needs. A cloud solution is beneficial because it reduces time to market and allows you to focus on configuration rather than customization. Plug-in functionality and APIs help create a tailored customer experience without the investment of custom UX design.
There are several cloud solutions available on the market. The important thing is to choose the one that best aligns with your organization’s needs and priorities.
3. Streamline back-office integrations
Midsize companies frequently complicate back-office integrations instead of approaching integrations through the lens of a classic risk to reward ratio, i.e., a common-sense analysis of the benefits that can be achieved from potentially complicated integrations. Rather than introducing complexity and risk in exchange for low-value outcomes, focus on integrating with the back office in ways that deliver the most impact to the business.
For example, should you invest in low-level, low-value integrations for pricing and product information? Maybe not. It might be more important to streamline order processing and integrate to your ERP for orders so financials flow clearly and the CFO can do her job more effectively.
Questions to ask at the beginning of the process
When a technology investment goes over budget, it can be difficult to bring it back on track. The best hope is to recalibrate with your partner or vendor on a set of best practices to meet business objectives, and then identify software capable of driving revenue or cutting costs.
It’s much easier to ask the right questions before you launch a technology project.