The new retail omnichannel commerce - mini-series - part 3

Focus on the Digital Operations Platform (DOP) - why even the old ERP should be questioned

In the first two parts of the mini-series "The new retail omnichannel commerce", we looked at the new omnichannel requirements, among other things, and examined the approaches that can be used to tackle these requirements. 

This final section will focus on the previously teased scenario 4, in which an "omnichannel retail all-in-one solution with strong OMS and ERP" could replace large parts of the entire system landscape, for example.

Under the term Digital Operations Platform (DOP), coined by Forrester, and driven by trends such as unified commerce, there are a large number of systems that claim to offer a huge range of functions.

In the following, we present our meta-definition in terms of scope, framework conditions and system categories.

A Digital Operations Platform (DOP) potentially covers the following parts:

• • Solution for eCommerce - the online shop for customers
  • Solution for POS - for customers in the advisory situation and during pick-up, including integrated checkout solution
  • Solution for order management with the requirements described in part 1
  • Strong centralised workflow solution for comprehensive automation
  • Strong central data & analytics layer for master data and transaction data, which can be accessed from all processes, coupled with an analysis solution for checking behaviour, quality, etc.
  • Complete Enterprise Resource Planning (ERP) functionalities for companies in industry and trade, but also in the pure service sector
  • Solution for merchandise management and logistics
  • Complete Customer Relationship Management (CRM) functionalities for marketing, sales and service
  • Solution for Product Information Management (PIM) and Digital Asset Management (DAM)

• Integration of marketplaces and other channels
• Integration of backend environment systems - existing, established systems can be completely retained and integrated, which is also necessary when gradually replacing the existing ERP with a DOP, for example

Two Forrester Waves "DOP for Manufacturing and Distribution" and "DOP for Services" were published in 2022.

As is so often the case with US-focussed analyst opinions, many of the systems mentioned there have little relevance for the European market with a focus on DACH and already fail because there are no corresponding implementation partners.

Exciting industry approaches such as "retail all-in-one solution" or even Europe-focussed products are also unfortunately not included, which is why further research is essential.

There are various providers that cover the above-mentioned areas more or less well. Nevertheless, you can't get rid of the general feeling: "A jack-of-all-trades can certainly do a little bit of everything, but nothing really!" And you're probably not even wrong in principle - there is no such thing as the ultimate solution.

But the question that our customers are increasingly asking themselves remains: Can this approach make a difference in my system landscape and if so, how?

There is definitely no generic answer to this question; it depends heavily on the situation and the requirements. Which brings us to the centre of one of our favourite evaluation projects.

Again with a view to the graphic above: A combination of the following, most important framework conditions must be in place for the use of DOPs in an evaluation:

• The level of suffering, especially in the ERP area, is very high
  • The current ERP is end-of-life and a new solution is fundamentally needed.
  • Migrating to the cloud version of the current ERP is simply infinitely expensive and initially offers no added value.

• With regard to the Workflow & Automation and Data & Analytics layers, there is a lot of room for improvement, especially when considering the integration of peripheral systems
  • The overarching orchestration of the company's business processes based on corresponding data is not possible.
  • A consistent focus on the customer and their processes (customer centricity) is not possible.
  • There is a willingness to ensure that the processes are not adopted in exactly the same way - rather, they should be rethought in advance and incorporated into the evaluation process

• Internal IT must be able to imagine a changed, comprehensive and more flexible deployment scenario
  • Several solutions for the IST architectural landscape are not set in stone and are at least open to discussion.
  • Note: For a pure 1:1 replacement of the existing ERP, it is better to look for a suitable, lean cloud ERP.

If several of the general conditions mentioned above apply, the next step is to look at the providers, which are spread across a very confusing field. We categorise the providers into one of the following categories:

• Best-of-Breed under one product name

• • Many components were strategically bought together under one company umbrella, which are now marketed under one product name.
  • It takes a lot of historical research to find out which parts come from which company acquisition and, depending on the time and sequence of the acquisitions, you can recognise the core of the solution.
  • According to manufacturers, a clean integration of the individual parts has been realised. However, experience shows that although this is not impossible, it is rarely the case.

• Platform approach

• • The platform, which has mostly developed from a single direction such as CRM, offers many proprietary modules.
  • Third-party providers are able to develop their own modules. This means that a wide range of functionalities and integrations are available.
  • The range of functions and quality of the provider's own modules, but above all those of third-party providers, is difficult to assess in terms of quality and future viability.

• Complete solution

• • The complete solution was developed for one industry and with a focus on SMEs, but is now also suitable for larger companies thanks to its range of functions and scalability.
  • It is not necessary to integrate individual components. It is actually a single solution with a modular structure based on modern architectural principles.
  • The mostly generic approaches in the structure of the modules and in the interaction with the workflows can have disadvantages in terms of usability.

• ERP industry essay

• Third-party manufacturers have developed complete industry approaches for almost all large, well-known ERPs, which offer a large ecosystem of business solutions.
• The industry add-on extends the ERP across the board and promises very lean projects, as processes, data and interfaces are already designed for the industry.
• The final completion of ERP and industry add-on through applications from the implementation service providers promises on paper a very broad and deep coverage plus a lot of flexibility at the same time. A combination that can later lead to worry lines during operation and further development.

Summary and conclusion - what can you take away from this final part of the mini-series?

• We are convinced that modern approaches such as DOP can lead to more agility and flexibility in a rigid environment with ERP components.
• However, it is a very long way for companies to get involved with one of these systems in the first place. However, if the framework conditions mentioned are in place, it is worth broadening the horizon and “questioning the old ERP”.
• In contrast to a more narrowly defined evaluation of eCommerce solutions for B2B or B2C, for example, the topic of omnichannel management systems with the consideration of ERP components has a scope for which upstream architecture consulting is highly recommended. Only after narrowing down to the appropriate scenario can an evaluation of the suitable solution be carried out in a second step.

We would be happy to work with you to find the right application scenario with the optimum solution for your company situation.

We look forward to hearing from you!