In summary, multi-channel commerce is attained when:
- The entire set of order management processes and supply chain functions across all channels are completely integrated, and all ordering/fulfillment channels have access to data needed to execute all transactions.
- Organizational and customer data aggregated from these functions and processes are leveraged to make intelligent decisions around customer offerings, for order fulfillment and for making decisions pertaining to business policies and operational processes.
Implementation: 3 Steps to MCI Excellence
Achieving multi-channel integration is a lengthy, complex process that involves not only your organization but also customers, suppliers, third-party logistics providers and other partners. Considering its sweeping span, success can be ensured by dividing the journey into small, manageable steps. This allows organizations to derive MCI benefits progressively. Current business operating models, multi-channel readiness, number of channels to be integrated — all these factors play a role in how the journey is undertaken. A commonly used approach is to focus on a subset of channels or functional areas with which to begin. Another approach is integrating by product lines. A third approach is integrating by locations or geographies. An organization can even mix and match these options if it makes the most economic sense — or if it's necessary to demonstrate the benefits of MCI to the relevant stakeholders.
The approach notwithstanding, improving customer experience and increasing supply chain efficiency will necessitate a journey across three distinct phases, as illustrated in Figure 2, which depicts the three phases and a retailer's state of MCC readiness in each. It starts with creating a roadmap and planning the integration of the various channels (Realization Phase), continues on to undertaking the steps needed for channel synchronization (Evolution Phase), and finally transforming the channels through integration (Transformation Phase), thus giving organizations the capability to engage in true multi-channel commerce.
The Road to MCC
These are some of the other factors that retailers should consider when implementing multi-channel integration:
Big Bang or Incremental: Attempting to complete MCI in a single iteration is not always practical. It is best to prioritize the entities that the retailer wants to integrate across channels and take an incremental, evolutionary path to MCC.
Single Source of Truth: A precursor to MCI is building a unified data warehouse for all critical information that is generated across channels, for data such as orders, customers, inventory, etc.
Information Systems: Point systems, legacy or new, should have appropriate handshakes and specific roles to play. Legacy systems should have the ability to handle future requirements, and new applications introduced should have the capability to integrate with existing applications seamlessly.
Channel Conflict: If a customer places an online order, but picks up from store, which channel gets the credit for the sale, in what proportion? Stores may want to protect inventory for store customers, but the online channel may want to offer store inventory to its customers, too. Policies to handle such potential conflicts should be clear to all stakeholders concerned.
Channel Independence: The MCI strategy should allow for channel differentiation. "Cyber Mondays" usually have online-only deals, for example. Of course, retailers routinely sell some products or product categories through a specific channel as a way to calibrate demand. However, the other channels should recognize such orders, too.
Channel proliferation continues to drive up customer expectations about seamless interactions, while also providing organizations the opportunity to increase revenues and profits through MCC. Corporations have largely viewed multiple channels as independent businesses and accordingly set up channel-specific infrastructure, business processes and workflows. This MCO way of working has created silos leading to inconsistent customer experience, duplication of processes and infrastructure, and lowered operational efficiency.
In order to realize their MCC goals, organizations should look at coupling MCO with MCI. Beyond being a "customer experience"-oriented initiative, MCI also helps achieve collaboration across the entire organization and its processes or interactions with fulfillment partners. Broader multi-channel goals can then be achieved via tighter integration of the sell-side and buy-side channels and the addition of customer and operational analytics to enable intelligent, proactive and fact-based decision making. This, to us, is the true MCC end-game.
About the Authors: Arun Channakrishnaiah is a principal in the SCM Practice with Infosys Technologies. He has more than 13 years of experience spanning supply chain functions such as distributed order management, logistics, merchandize planning, procurement and product development. He has architected and managed several large multi-phase Sterling Commerce and i2-based business and IT transformational programs for clients across the Retail, Manufacturing and Logistics sectors. For more information on Infosys Technologies, see www.infosys.com.
Gopi Krishnan is delivery manager and lead with the SCM Practice at Infosys Technologies. He has more than 14 years of IT and industry experience, and he heads the Supply Chain Management practice within Enterprise Solutions, delivering best-of-breed package solutions. He blogs on supply chain management issues that drive operational excellence and enterprise performance at www.infosysblogs.com/supply-chain. For more information on Infosys Technologies, see www.infosys.com.