Challenges for Customers and Vendors
If you are a business professional tasked with writing an RFP for a B2B E-Commerce solution you know it can be a daunting task. The needs of numerous corporate functions including marketing, IT, security, finance, etc. must be balanced. The selected solution must be affordable, delivered in a timely fashion, secure, and achieve the primary goal of increased sales. For vendors selling a B2B E-Commerce solution, responding to an RFP can be equally challenging as today’s customers are looking for a system that is not only a B2B solution but must also include a myriad of other capabilities out-of-the-box such as content management, marketing automation, plug and play with various third-party tools, and the ability to be integrated into an ERP system in real-time.
Customers who are unfamiliar with available solutions may come in with unrealistic expectations. Vendors who are under pressure to increase sales may overpromise. The result is an IT project that becomes adversarial instead of the beginning of a long-term partnership where both parties are sympathetic to their counterparts. There are many B2B E-Commerce solutions on the market today. None of them are a silver bullet delivering all the capabilities customers are seeking. All have their strengths and weaknesses. For example, some solutions focus on marketing and content but struggle with real-time ERP integration. Others are pure E-Commerce engines with real-time connectivity to ERP systems but fall short of the customer’s expectations on the marketing side.
This post will address several common topics of a typical RFP for B2B E-Commerce solutions including ERP integration, marketing, and promotions, content management, hosted versus on-premises, third-party integrations, solution customization, license & implementation, and finally maintenance & support. Customers need to approach the selection well-informed, with realistic expectations, and clearly defined priorities. On the vendor side, solution providers must be transparent and honest about their capabilities, cost, and effort to deploy their solutions and not just sell but guide the customer to the appropriate solution.
1. ERP Integration
Of all the topics addressed here, this is the most complex. Solutions on the market today vary in their level of ERP integration. There are solutions where the business rules, pricing, content, master data, etc. all reside in the B2B solution and only the final sales order is submitted to the ERP system. Others will claim ERP integration while exposing only a fraction of the business functions and master data. Lastly, there are those with truly robust integration that support existing business rules, pricing, master data, order simulation and submission, transaction history, variant configuration, etc.
For customers, this is where a key priority comes into focus. ERP systems that have been in place for many years have evolved complicated business processes that are costly to replicate within a B2B solution. When rules change in the ERP system, if the B2B system is not integrated, the systems need to be synchronized. This introduces a significant pain point for customers. Vendors need to be transparent about the level of their integration and serve as a guide to the customer to help them understand exactly what they will and, more importantly, will not get.
2. Marketing and Promotions
Prior to evaluating the capabilities of a B2B solution as it relates to marketing and promotions, customers need to ask some critical questions. While today’s B2B shops are offering more B2C-style features like glossy images, videos, promotions, deals, and reviews, customers need to understand the buying patterns of their consumers. Consumers may know exactly what they want and not be browsing for products or care to read reviews. They log in, upload a file or repeat a past order, submit, then log off. In these scenarios for customers, a B2B solution with robust real-time ERP integration but with less-extensive marketing capabilities may be a better solution. Vendors need to understand that marketing departments are more heavily involved in software selection today. However, they are not technical; they may not understand the complexity of the business processes in the ERP system. Their focus is on customer experience. This is where an experienced pre-sales engineer with excellent communication skills is an absolute requirement as part of the process.
3. Content Management
Content Management is a broad topic and could also appear under third-party integrations as there are numerous solutions available specializing in this. For this discussion, we will limit ourselves to supporting content such as images, videos, pdf documents, announcements, and other messaging presented to a user of the B2B solution. This content appears on the website homepage and throughout the B2B solution, as well as on product detail pages in one or more product catalogs.
It’s important to separate this content from things like standard text on field labels, column headers, reports, etc. Those texts may be editable in one form or another, but that is not considered content to be managed and updated as needed by administrators. Likewise, master data and product data derived from the ERP system, although it may be considered content, is assumed to be managed within the ERP system and not in the B2B solution. Customers should ask where content that can be managed by their team is stored. Is it a separate web server reachable by a web browser? Is it stored in the ERP system? (Hint: this is a bad idea!) What tools are available to manage this? How is it published? Is it cached? As was mentioned above, the people most interested in this topic are usually not technical. Vendors need to tailor their responses and know who their audience is.
4. Hosted versus On-Premises
Another significant decision for customers evaluating B2B solutions is whether to select a hosted or on-premises system. Hosted solutions rely on the vendor to maintain the system technically while the customer’s resources are dedicated to content, catalogs, master data, user management, etc. Customers choose this type of solution because they may not have the in-house skills or resources to maintain such a system. These B2B solutions, even when hosted in a private cloud, tend to be less customizable since implementations are on a common code base. When a new release is deployed, all customers get the new features. As was explained above, customers must determine how customized their ERP business processes are. A highly customized ERP system paired with a very standard and close to out-of-the-box B2B solution may fall short of critical business requirements.
On-premises solutions, which are individual installations on customer infrastructure, tend to be highly customizable. Customers with complex business processes can tailor the B2B solution to meet the needs of their end consumers. When a new version of the B2B solution becomes available, customers may need to migrate their customizations to the upgraded version unless it is just a technical upgrade of the underlying E-Commerce engine. The challenge for vendors offering on-premises solutions is a reliance on customer infrastructure and technical resources for installation, deployment, etc. Vendors need to be crystal clear as to what the customer must provide and support. These requirements should not be buried in contract language or a list of assumptions. They should be presented upfront.
5. Third-Party Integration
There are a wide variety of add-on or third-party solutions which can be implemented to enhance a B2B solution: payment gateways, promotion engines, freight-shopping, shipment processing, content management, catalog management... the list is endless. Some B2B solutions on the market offer pre-built modules which can be activated. Others require custom development to implement.
Customers evaluating B2B solutions may find that hosted solutions offer more of these pre-built modules, but that comes at the cost of less customization. For those vendors with on-premises or highly customizable solutions, there may be fewer out-of-the-box third-party add-ons. While these can almost always be added, it is only through custom development. Once again, the customer must balance the need for out-of-the-box features versus the ability to customize.
Lastly, customers should ask vendors if they have partnerships with any third-party providers. Be aware that vendors, even though they are partners, may not always know certain things such as license requirements. Never rely exclusively on one vendor to provide information about another vendor’s solutions, even if they are partners.
6. Solution Customization
All B2B solutions on the market can be customized, and we have already covered many issues related to customizations above. One important topic related to customization that we have not covered is upgrades. For customized B2B solutions, customers will want to know how hard it is to upgrade when a new release comes out, what is the typical release cycle, how are customizations supported, and is this support covered under maintenance? The further a solution moves away from standard, the more effort it takes to upgrade. More effort means more cost. Heavily customized B2B solutions may also have a slight dependency on the consultants who implemented the system as they know it inside out. This can be solved by having redundancy on the initial project implementation, but that can also add upfront costs. I’ll address this in more detail in the maintenance and support section.
7. License and Implementation
It goes without saying that cost is of the utmost concern. Navigating the maze of pricing, available modules, implementation costs, etc., can be overwhelming. Pricing models will vary based on the type of solution offered. While a hosted solution is more likely to be subscription-based, an on-premises solution leans towards a perpetual license. Every vendor has a different model; so what are the key questions to ask?
For subscription models, customers should ask if pricing is based on things like the number of orders submitted or the number of users. And if so, customers should understand how and how often the system is audited to determine these metrics.
For perpetual licenses, customers will need to know what metric is used to determine pricing – is it the same for small companies as it is for larger organizations? Are there any additional annual charges such as for maintenance? Are these percentage based, and are they pro-rated at the time of purchase? Can any be opted out of? Is a discount available for agreeing to be a referral customer?
Implementation is another cost consideration. Both hosted and on-premises solutions will have initial implementation costs no matter the degree of customization. One important factor here is the size of the team performing the implementation. This varies widely based on the solutions on the market. B2B solutions claiming to do it all from marketing and content to plug-ins and real-time ERP integration will require larger teams and long implementation periods. Customers may be enticed by deep license discounts only to see those savings evaporate when an army of consultants walk through the door and take a year to implement the solution. Such solutions are meant for multi-billion-dollar organizations and not mid-market companies. Ask how large the teams are and what a typical implementation period is. And of course, always ask for references.
8. Maintenance and Support
A major area of conflict between customers and vendors of B2B solutions is maintenance and support. This area is rife with assumptions and misunderstandings. Customers fail to ask the proper questions and vendors assume customers have clearly read their contracts. The word maintenance will often mean two different things to the customer and vendor. For the customer, maintenance means support, and perhaps free consulting hours are included when tickets are submitted. They become upset when they get a bill for support. For the vendor, maintenance may mean support but only for the core unmodified software which does not include any bugs in customizations once approved for production. Communication is key and as this is a common misunderstanding, it really should be the vendor who raises this topic and spells it out clearly.
Once a solution is live, a big concern for customers is how the vendor supports the solution in case of bugs or outages. Again, communication is key as these topics are typically covered in professional or master service agreements, software license agreements, or statements of work. If both parties sign mutual NDAs during the selection process, template contracts can be shared, reviewed, and any questions answered prior to selection and contract signing. An ounce of prevention is worth a pound of cure.
Lastly, customers should ask about ongoing support. Every vendor provides support, but the difference can depend on the type of solution implemented. All vendors should have a ticketing system. Vendors who provide a hosted solution, which is typically less customized, may have a dedicated support staff. Since the solution is not as customized, the consultants who support the solution do not need to be the ones who worked on the implementation. For heavily customized B2B solutions however, support presents an interesting challenge. There could be a reliance on the consultants who implemented the solution to continue to be the primary support. That’s not to say other consultants cannot support the solution – they can – but they may not have access to the customer environment if it is on-premises and it may take slightly longer to diagnose and resolve an issue. There is always a trade-off, which is the purpose of this post: to help balance all those considerations to make the best choice for your organization.
It cannot be stressed enough that both customers and vendors need to think about the relationship in terms of a partnership. This starts with respect and honesty. Customers who have done their research prior to beginning the selection process can better tailor their RFPs and identify a solution which truly meets their needs. Customers submitting RFPs with every conceivable feature, with unrealistic cost expectations and delivery timelines will only find frustration and disappointment. Vendors who respond to RFPs knowing their potential customers may be overwhelmed should respond with the spirit of a trusted advisor and not just as a salesperson. That will increase the chance of a successful partnership if they win the deal.
Finally, everyone’s time is valuable. Customers sending RFPs should consider the time the vendor has to spend replying. All vendors should be able to provide cost estimates for out-of-the-box solutions and implementations along with a few basic assumptions. Vendors can help themselves by asking the most critical questions upfront. Is the project budgeted? For on-premises B2B solutions, does the customers' ERP system or infrastructure meet the minimum requirements for the B2B solution? Research, preparedness, open and honest communication will result in finding the right solution and hopefully the beginning of a long-term partnership. It’s not a sprint. It’s a marathon.