What are the main challenges in designing and implementing an omnichannel architecture?
Large software companies are often capable of combining many different omnichannel architecture components into one omnichannel solution. Although this is true, there are almost no organizations that have managed to truly combine all components into one omnichannel architecture. This is due to the following challenges:
- Usually, these organizations work with legacy systems that can't be replaced easily
- Retailers often have very detailed specific demands, that require small, custom tailored solutions
- Large software solutions often don't provide detailed support for niche topics, which means niche topics aren't fully supported in an integrated solution
- Organizations may intentionally choose for an architecture comprised of parts from different suppliers, in order to diminish dependencies from the supplier, or to spread investments
Of these challenges, experts have pointed out that system legacy seems to be the most prevalent. This is especially the case for traditional retailers. Younger retailers that have managed to grow significantly within a relatively short period of time, have often adopted innovating architecture solutions with a strong online focus. Many of these companies have made a fairly easy switch from purely online systems to a fully equipped omnichannel architecture, mainly because their systems were already prepared for this change.
For most retailers however, data that is still used by the business is often stored on old systems that are no longer supported. These systems are called "legacy" systems. It can be a very time consuming and complex task to transfer data from these old systems to modern systems. For traditional retailers it is therefore suggested to identify whether it's possible to transfer data from old systems into a new system, within the desired budget. Here it will have to be decided how "broad" this new system is supposed to be, depending on the situation of the retailer.
An integrated system vs. a "best-of-breed" architecture
While making choices on the system type, organizations will have to take into account several aspects. Currently there is no ultimate answer for all retailers - yet. The situation may differ substantially per retailer. Important aspects to take into account are:
- Which distinctive characters are desired, and which solutions can support optimally support them?
- Which level of flexibility is necessary, and in which amounts can integrated solutions bring flexibility?
- How manageable will a system landscape be with multiple systems, interfaces and/or web services?
- Which developments happen at software providers regarding consolidation and/or specialization?
- Is there enough agreement between departments on the business requirements to make decisions about the system?
- In case there is no agreement between departments, a "best-of-breed" architecture may be best suited, do to it flexibility and many communication options.
- In case of a legacy situation, a switch to a "best-of-breed" system would also be a sensible choice.
The most important requirements is that the system should support the omnichannel mind set of the customer, while the system is stable and facilitating.
Characteristics of a "best-of-breed" architecture
A best-of-breed system landscape can be simplified into several parts. In general, a few 'domains' can be distinguished:
- Channels: all direct interaction with the consumer occurs via a few internal channels (sales channels, communication and used devices) such as the web shop, cashier and app, but also via external channels such as shop-in-shops on international trade platforms
- Business partners: all (integration with) third parties such as product vendors, content providers and/or service providers. Here you can think of logistics parties or payment providers
- Omnichannel integration layer: this is the conductor of all customer journeys and supporting processes. When receiving a returned product in the physical store, how does one know where to send the product? How does one know which amount to return to the customer? What happens to the loyalty points? And did the customer actually even pay? The omnichannel integration layer also facilitates integration between parties and systems (interface management)
- Analyzing & reporting: On the basis of all available, relevant data (usually a combination from sources and systems), analyses and reports are created
- Single truth data repositories: the above mentioned integration layer and adjacent systems and parties should all use the same data. For all types of data, a 'single truth' should therefore be determined. From this single truth data repository, all used systems and parties are provided with data (from one source)
- Applications and sources: for the back end of the system, in terms of functionality and data, (customer journey- and back office)applications are used. These applications provide the functional domains with the correct system support and data