Monthly Archives: August 2015

Salesforce Evolves Communities From Forums To E-Commerce

Today Salesforce launched the ability to embed a Buy Button into sites built upon their Community Cloud platform. Click here for press release. This new feature will bring the power of commerce to the world of social: enabling brands to leverage the activity that takes place in social channels and convert it into financial transactions. The following is Constellation Research’s reaction to the news, co-authored by Principal Analysts Alan Lepofsky and Guy Courtin.

Below you can see an example, in this case labeled Cart, which allows community members to add an item for purchase.

salesforce.com
Shopping Meets Social

From the press release: “The new e-commerce capabilities enable communities of customers to discover, research, discuss and buy products in a single location while introducing a new sales channel for companies.”

Alan’s POV: This is significant because it enables companies to blend together 1) their community forums; where current and future customers can ask questions, post reviews and share feedback with 2) their e-commerce platform for purchasing. Today many companies separate these two functions, relying heavily on popular social media sites such as Facebook, Twitter and Pinterest for customer engagement, then shifting those customers to another location for purchasing transactions.  The integration of community (social) and commerce (shopping) will allow for a much more seamless, hence more desirable customer experience.

Guy’s POV: Retail and CPG have long been aware of the growing power and influence social channels have on their brands and products. One only had to look as far as Twitter to see how brands such as @BestBuy or @USAir are acutely aware of any possible issue voiced by their customers. This announcement is looking to take advantage of the positive that comes of out social media – converting sales. Retail and CPG are also both acutely aware that their best sales people are existing customers. Enabling transactions to take place in these forums builds on the aspect of community influence.

Commerce Without Coding

From the press release: “With new e-commerce Lightning Components from Salesforce partners like CloudCraze, Demandware and Bigcommerce, companies will be able to seamlessly incorporate e-commerce into their communities. Lightning Components are reusable building blocks that enable companies to quickly add rich new capabilities into their communities without programming.”

Alan’s POV: While the idea of making it easy for “citizen developers” (line of business workers who are not trained coders) to simply drag and drop components into applications sounds appealing, organizations need to be weary, as there is more to application development than just writing lines of code. Successful applications rely on compelling user interfaces (the look) and user experiences (the interactions). Commerce is a complicated process, involving complex workflows between inventory, purchasing and shipping.  These things require professionals with training and experience. That said, there is nothing wrong with Salesforce making it easier for professional developers to add these new e-commerce functions to their applications. The addition of the Buy Button and other components from their business partner eco-system, help make the Salesforce1 a compelling platform.

Complexity Of Supply Chain Meets Ease Of One Click Commerce

From the press release: “Community Cloud customers are already deploying custom e-commerce solutions, demonstrating the power of combining transactions with communities.”

Guy’s POV: The addition of a transaction function to the communities is not as simple as adding some code to a web site. The supply chain aspects of order management, fulfillment and payment are all aspects of the supply chain that have to be in sync for the promise of a “buy” button to come to fruition. This is no simple task; many e-Commerce players have failed at this step. It will be an interesting play for the software giant if it can integrate some of the efforts it is making with Salesforce retail as well as the partnerships it announced to truly take this to then next level. As the examples given for this new offering revolve around digital assets, the challenge of moving physical goods is much more complex.

Summary: From Forums To E-Commerce

The announcement hold much promise when it comes to the integration of retail and communities. The addition of e-commerce provides Salesforce an edge over many rival social community platforms. However there remains much to be seen as to how Salesforce can fulfill some of the promises, especially when it comes to moving physical goods. What will they build themselves, what will customers need to build and what gaps will be filled by business partners and 3rd party vendors? Constellation supports this first step in integrating shopping and social and recommends customers speak with Salesforce to see if it will work with their specific e-commerce systems and suppliers. This is a space to watch, hopefully with more details and examples being presented at Dreamforce.

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Filed under Current Events, Online Community, Retail, Supply Chain

Infor acquires GT Nexus – bolsters their supply chain offerings.

The following blog post was jointly written with Ray Wang – click here for bio.

Screen Shot 2015-08-11 at 7.11.27 AM

On August 11th, 2015, Infor announced the $675M acquisition of GT Nexus, a private supply chain and procurement network solution vendor.  GTNexus brings $150M in cloud revenue, 28,000 companies on their network, 100,000 users across 66 countries, and $100B of goods each year on the procurement network. Constellation believes this will have long term consequences for both client bases. The largest impact might be in the continued transformation of Infor into a true cloud solution powerhouse. Constellation sees three main takeaways:

 

  1. Manufacturing is no longer an island in the digital economy. Both companies have a strong presence within manufacturing. GT Nexus completes the network economy by including a procurement network and supply chain orchestration.

 

Point of view (POV): Network economies require three things: content (Product) , network (distribution), and arms dealing (software).  Infor brings a huge base of manufacturers and retailers (products) while GT Nexus brings the procurement (network).  The combined clouds (arms dealer) bring technologies to the manufacturers to enable direct to customer and go from product ideation to commerce.

 

  1. Platform play opens up additional total addressable markets. GT Nexus has made major efforts to grow their platform – to become the network of networks.  The platform provides Infor with an untapped market opportunity.

 

(POV): GT Nexus has demonstrated the power of the platform via success stories such as Caterpillar who has leveraged the solution to better manage their network of products. Via the cloud based platform, Caterpillar is not only able to manage this vast range of products but is also able to pull insights from the large amount of data that is being created from the platform. Truly taking the community information and adapting new business use cases. This platform development will open up new opportunities for Infor customers.

Especially when it comes to verticals such as retail where Infor has been working hard to reworking in some cases developing an entire new suite of offerings. the knowledge and experience that GT Nexus brings to the equation will accelerate these efforts. Which could mean that Infor lwill be able to integrate this cloud based platform into their current offerings. The networks that Infor will add, such as the one exemplified by Caterpillar, will bring a tremendous asset to a company that is looking to become “the world’s first industry cloud company.”

 

  1. Combined force can become major player for retail. As stated during Infor’s analyst day in March of this year, the company was building “everything from scratch”  for retail.

 

(POV): With the addition of GT Nexus to the fold, where ever those efforts where they will only get a tremendous boost from what GT Nexus already has in the fold. Working with the likes of Patagonia, Brooks Brothers and Deckers (makers of such brands as UGG and Teva), GT Nexus has addressed a wide array of retailer issues. From better supplier relations to cross channel order management, the GT Nexus platform has been tackling major issues facing retailers. This focus on the retail supply chain is an important piece of the Infor puzzle. This is an area that Infor has expressed a strong desire to become a major player in, with this news it might just achieve that goal.

The Bottom Line: Network Economies Democratize The Disruption Of Digital Businesses

Mergers are nothing new in the world of enterprise software and customers should not be surprised.. GT Nexus was one of the few large supply chain and procurement vendors that could be an acquisition target. Others vendors such as Manhattan Associates, Logility and Kinaxis remain strong tragets for mergers and acquisition in supply chain.  On the procurement side, hot startup Coupa is giving SAP Ariba a run for the money.  The result, it makes sense for large players such as Infor to turn their eyes to such a move and iit fulfills a need that cannot be allowed to wait for development to satisfy.

Recommendations: Rationalize Your Vendors In The Cloud Post Merger

For Infor customers this should prove to be highly beneficial. GT Nexus will add a host of new offerings that Infor customers should be able to take advantage of immediately. Infor customer’s in manufacturing or retail should determine what parts of GT Nexus they can immediately address for supply chain orchestration and procurement network issues. For GT Nexus clients, things should be business as usual. However, be aware that supply chain and procurement networks are not the only priority for Infor. On the contrary, Infor has been more successful in ERP and HCM. Customers should ensure that they are clear as to how they will fit in the new organization and what efforts will be made to ensure that their solutions continue to command the attention it warrants.  As many customers overlap, they should evaluate how the merger streamlines existing contracts and improve the ability to create network economies.

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Filed under Cloud, Current Events, Manufacturing, Retail, Supply Chain, Technology