The Infosys global supply chain management blog enables leaner supply chains through process and IT related interventions. Discuss the latest trends and solutions across the supply chain management landscape.

« Product Allocation Planning - Managing supply constraints | Main | The 'Cash on Delivery' Payment Option! »

Multi-Channel Commerce: Not viral yet, but definitely diffusing

Yesterday, I, along with a couple of my team members, had the opportunity to present the progress on our Distributed Order Management (DOM) solution to Kris, our Executive Co-Chairman (and CEO till last month). Kris's objective was to understand the solution innovation in what we have done - i.e, building a Reference Implementation on the foundations of Sterling Commerce's base DOM product offering.

This Reference Implementation has been our answer to clients increasing need to get onto the Multi-Channel Commerce (MCC) bandwagon. We've had some good successes of late focusing on the merits of starting off the blocks with a reference implementation in an agile-like manner (I use such terms carefully!) as against blue-sky sessions with a bunch of assorted business analysts and their managers with highly varying interest levels with the finished product looking nothing like what each person there had envisaged in his/her mind.

Retail is an industry, particularly in the US (and to a good extent, UK too) that has been driven by customer tastes (and even whims) the most. This is not just general merchandise alone that I am talking about, even for specialty, apparel, groceries and other retail sub-verticals/chains, the staggering number of customers, item/item categories and even supplier combinations ensure that (hopefully) error free management of high volumes and large sets of transactions has always been the number one priority. Add to this the complexity of trying to make sense of an MCC world (or declining painfully in revenues if one does nothing). Retail end-customers now can use a combination of channels (web, mobile, call center, store, EDI, pick-up & drop points etc) to browse, buy and return merchandise. At the back-end of the supply chain, shopping cart items need to be split and re-aggregated based on stocked/non-stocked items available across central/regional/store warehouses following different delivery models across different suppliers with different lead times.

As Kris was asking of the potential target markets where our reference implementation can help clients with rapid deployments, I was struck by the technology diffusion angle of something as universal as MCC. While MCC is an existential necessity, so to speak, in the Retail world in the US and UK, there are a bunch of other interested parties curiously making tentative experiments and proactively dealing with the beast, well before it is thrust upon them. At the highest level, this diffusion is happening as we speak across four dimensions:

  1. Geography - While I cannot say this for many industries, this axiom is true in the Retail world:  What US retailers adopt today, the rest of the world adopts tomorrow (and in some cases, a few years later!). MCC is a concept is now slowly seeping into (as against sweeping across) continental Europe, LatAm and large parts of Asia Pacific - regions which has so far kept the various channels separate and largely used websites to peddle information about goods rather than peddle the goods themselves.
  2. Non-Retail industries - Consumer electronics companies like Apple, Motorola and Nokia are not into classic B2B transactions alone anymore. They need to know what their customers are buying and why and are actively looking at engaging in ongoing conversations with them. Just a few years back, selling would have meant trusting the electronics retailers demand forecasts - bullwhipped or otherwise - and shipping products to mandated locations in mandated quantities on mandated days. Ditto with related industries like consumer packaged goods, medical instruments and certain sectors within industrial goods.
  3. Tier-2 US Retailers - these are the $1-5bn retailers who're finally opening up to the possibility of cross-channel sales and fulfillment, of using one channel to leverage sales in the other. The pressure factor here is that they won't get the 4-10 years of learning that the Tier-1 retailers had adopting and refining the model - not just in terms of IT landscape, but also everything above and beyond right from sharing warehouse space to store clerk incentivization for online sales. As regards IT, they need to have a platform up and running with all the end-to-end functional integration (web commerce to call center to order management to warehouse management to returns management to financials) in 12-24 months.
  4. Internationalization - Like #3 above, Tier-1 retailers are now all going international. This would bring in newer angles of multiple time zones, currencies and localizations (not just in item categories, but in processes too). But where IT landscape is still nascent and evolving, fitting in a pre-built template would be a lot easier that a classic rip & replace strategy.

MCC is an idea whose time came a few years back. Vendors like Sterling Commerce (now IBM) caught on to it early in the cycle and consequently, have reaped rich benefits. Large MCC programs though are a lot more than a web-front end and a DOM back-end, it requires order orchestration across applications in the buy-side and sell-side with a solid MDM framework to ensure data stays current and clean. In the meantime, it would be fascinating to watch the diffusion of the MCC-impetus across the various dimensions I mentioned. The good news is that these late comers can study and adopt what has worked well in tier-1 US retailers. The bad news though is that the window of time is fast closing in.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Please key in the two words you see in the box to validate your identity as an authentic user and reduce spam.

Subscribe to this blog's feed

Follow us on

Blogger Profiles

Infosys on Twitter