The Evolution of Technology for E-commerce

By: Robert Killory, Chief Innovation Officer, 3CLogic

Robert Killory, Chief Innovation Officer, 3CLogic

The technology used to handle e-commerce has a habit of both leading and lagging the industry—and where the technology in use lies in relation to channels is the key to understanding whether it is an enabler or an inhibitor. Dynamic channels such as smart phones and tablets, for example, are far ahead of the curve, while in store equipment is typically archaic and unable to adapt to the changing landscape. Key business drivers will request additional demographics (location, platform, user profile), something most e-commerce devices can provide, however storefront gear may be unable to collect this information and therefore will be unable to identify who the customer is. There have been great innovations over the years (like frequent shopper cards), which help to bridge this gap, but standardizing the data across disparate systems and making it readily available brings its own set of challenges.

"Data from every channel should be aggregated and organized in order to garner key business intelligence across channels and specific to each channel"

Security of Technology

Differences in technology have created concerns and challenges surrounding security. By definition, the more dynamic the channel or platform, the higher the security risk is. Hackers and cyber terrorists have exhibited a level of adaptability that most companies do not have the resources to address, let alone stay ahead of. As they say in counter-terrorism, “we have to get it right every time whereas they only have to get it right once”. When executives weigh the various platforms and prioritize which ones get hardened first, hackers know to focus on the less developed platforms and attempt to breach them before businesses can implement all necessary security measures. We have seen this on recent successful hacks of POS terminals in retail stores.

Operational Requirements

The aggregation of data for e-commerce also applies to operations. From the operational perspective, the consumer assumes (or demands) channel transparency throughout their transaction. Since consumers know that store X allows purchases online to be returned at a store location, then they know it is possible and expect every store to provide this service. Permitting such a service without proper association of data, however, can present businesses with the risk of fraud. Every transaction must be reconciled with a core source to ensure an online sale is not returned in store and then also returned online. But to prevent issues such as these, data must be managed and controlled from a single source.

Business Intelligence

Once the primary (security) and secondary (operational) aspects are handled, the tertiary objective of reporting must be addressed. Data from every channel should be aggregated and organized in order to garner key business intelligence across channels and specific to each channel. The design of a system (and its underlying information model) is one of the biggest hurdles in achieving this. Not only does a business need to address all current channels and information, but must also ‘future proof’ the model as much as possible, allowing for the as-yet undiscovered channels.

Operational Flexibility

The multi-dimensional aspects of e-commerce are pushing CXO’s into entirely new territory, requiring a level of flexibility that was not previously required. If a CIO/CTO is not as adept in security as the CSO, then the operations and reporting can introduce risks capable of killing the company. The obvious answer is to expand the staff and expertise used to handle these new areas—but from a financial perspective, the CXO is expected to perform all of these tasks safely and in a way that will optimize performance without greatly impacting the budget.

Just as the hackers only have to score once, the risks of adopting or ignoring a channel presents risk for the CXO. If a CXO does five channels well, but misses the one that becomes more popular than the other five combined, the business tends to remember the miss over the five hits. Trend analysis and forecasting becomes as critical as the execution, and proper CYA (Cover Your Approach) on where you focus and why can be as demanding as the actual execution of the technology.

In summary, the rapidly changing arena of e-commerce, with its subsets of security or efficiency or reporting, increase the workload of the CXO greatly, give them a small chance of becoming a super hero, and a much larger chance of being the scorched sidekick saying ‘how did I miss that one’. Proper planning and education, both for the CXO and his/her staff, can mitigate the risks and allow the super hero scenario to be the more frequent outcome.