Martin Newman is an e-commerce expert who we recently commissioned to produce a step-by-step guide called Delivering Successful E-commerce Projects, which I have just published. 

Here I talk to Martin to cover some of the key challenges and issues for e-commerce project managers. These are outlined in more detail in the report, alongside lots of guidance (it contains more than 400 practical recommendations). Why not grab a copy today?

What are the most common issues and challenges in managing e-commerce projects?

There are a multitude of potential challenges that will dictate the overall level of success. Managing expectations is hugely important. You must have a well thought-through and achievable business case and commercial plan for the e-commerce channel. There is still too much finger in the air going on when it comes to determining the scope of opportunity for the channel

Supplier selection is a minefield. It’s quite amazing that even today, 10 years on from the height of the dotcom boom, you can get such a wide variety of quotes and capabilities within the current e-commerce supplier space. 

A comprehensive request for proposal (RFP) is needed, followed by a robust level of due diligence to ensure you’re choosing the right supplier. Value is obviously important, but price should not be your only driver. Too many choices are made on price with a real lack of thought having gone into the capability of the supplier to deliver your requirements.

Weak project managers are also a major cause of e-commerce projects failing. This can be due to them allowing scope creep, not ensuring deadlines are met, not communicating effectively and so on. So, a good project manager is quite literally worth their weight in gold. This should be a mandatory requirement.

Engaging stakeholders is also vital. You need to gain commitment and build consensus, and the best way to achieve this is by engaging both executive stakeholders as well as those who will be affected by e-commerce in the day-to-day operation of the business.

How and why do these problems typically arise?

Problems arise due to a combination of internal client issues and external supplier issues. On the client side, some issues are due to a lack of experience in the e-commerce space, and some of the supplier related issues are due to many suppliers having been too focused on winning new business, and not enough on delivery. 

Clients are responsible for choosing a supplier and for ensuring that all key stakeholders are engaged in the requirements gathering process. Both of these processes can become problematic when e-commerce is being managed by a relatively inexperienced head of e-commerce, or when the board make the supplier selection decision. Boards typically lack knowledge and experience of the e-commerce space, and should have the final say in this area. 

Suppliers are responsible for ensuring that they deliver on their promises and by providing some fair SLAs. The supplier should also ensure that they provide an experienced project manager in place. 

It is also absolutely vital that when a client doesn’t have a particularly experienced in-house e-commerce resource, that the supplier provides guidance on the scope and helps the client to understand what is ‘base level e-commerce’, what is ‘fit for purpose’ and what a ‘best in class’ solution looks like.

Team structure and stakeholder buy-in remains a key factor in the success of projects. How should managers go about securing the resources they need?

I have pretty strong views on this. I do believe that, in many cases, e-commerce merits a board level position. The reason for this is quite simply that when this isn’t the case, too many key strategic decisions are taken by people who don’t understand the channel. 

Decisions made around forecasts (scope of opportunity), levels of investment, structure/headcount and the overall vision for e-commerce are often flawed. 

This tends to be the result of e-commerce too often being thought of only in relation to the incremental revenue that can be generated from the channel, whereas it’s a driver for every channel in the business. There is a growing belief that for every sale you generate on your website, the site drives three or four sales in your offline business. 

So to answer the question, a head of e-commerce needs to engage executive stakeholders in the planning process, assuming that they haven’t already made all the big decisions. They also need to talk through the scope of opportunity, the different adoption models available and the choices of platforms and suppliers. And then present the business case for the potential strategy. 

It’s always a good idea to involve the finance team in the creation of the business case as this collaboration will add credibility to the business case you present.

After that you need to involve all of the operational functions that will touch e-commerce and have a part to play in its success. Who this is will depend upon the structure in the business but will most likely include buying and merchandising, customer service, marketing, IT, finance, supply chain and distribution.

Pre-planning is crucial. What are the most important things to consider for client-side e-commerce managers?

As mentioned above, you need to ensure that there’s a well thought-through business case. It’s a good idea to involve someone in the finance team to help you pull together the numbers for the business case as this will add credibility to your case and to the opportunity. 

When doing this remember to consider the impact that the site will have on the other channels in your business, particularly your bricks and mortar stores.

Managing expectations is vital, to ensure that the expectations of the sponsor and the board are realistic and this applies to both the forecast for revenue generation/ROI, the investment required to deliver the vision for the e-commerce channel, as well as the timeline for successful delivery.

It’s also a good idea to conduct some high level risk analysis. Focus on the key risks. If you have an internal audit department, this is a good time to involve them (as a key stakeholder in your project).The audit department’s early and continual involvement will very much help you in terms of assuring your sponsor (and the board) that you are considering all implications throughout the lifecycle of the project (from a due diligence and compliance perspective).

Identify all of the key stakeholders. Including those who will be affected from both strategic and operational perspectives. Clarify who fulfils which roles in the project. Document these on the project plan and clarify what the remit for each of these roles will be.

There are so many other factors, as discussed in far more detail in the Delivering Successful E-commerce Projects report. 

What’s the best way of choosing a supplier?

First of all you need to consider what model you’re going to adopt. Are you going to outsource everything including the platform, customer service, marketing and fulfillment? Or are you going to manage all of this in-house?

Once you’ve made this decision, you then need to produce an RFP covering all of your key requirements, and then select a number of suppliers to give the RFP to. You may initially want to have a ‘beauty parade’ and review their credentials before deciding upon whether or not to shortlist them and give them the RFP.

I recommend having four suppliers on your shortlist. In terms of selection criteria, focus on how effectively the supplier responded to your RFP and brief, and whether they challenged any of your objectives? This can be a good sign of an agency able to add value to your strategy. 

How much do they want and value your business? If your account is too low in value and you’re one of their smaller clients, you need to ask yourself and the supplier, will you get the level of service and commitment you require? 

Also, think about creativity vs optimisation. Is the agency really creative? Are they driven by winning awards for creativity or are they motivated by helping you to achieve your ROI? You need to work with someone who can demonstrate what best practice looks like in your space 

Finally, what level of customer retention do they have? As this will provide you with a good indication of their focus. Are they more focused on winning new business or retaining existing accounts? How long have they held all of the client accounts they profess to have? 

Many e-commerce suppliers have grown fat over recent years due to the huge organic growth in the market and have had more new business coming in than they could handle. As a result, for some, client relationship management and project delivery have not been the focus.

Do you always try to agree on service level agreements?

I do. It’s so important, because without them, the supplier has no real incentive to ensure they deliver on all of their promises. And if they don’t, as a client, you’ve got no real control over the issues.

But these should be fair and there to both penalize failure and reward success.

Do you favour working with an integrated agency, for the one-stop shop approach, or working with a range of specialists to bring a project to life?

That’s a great question. I honestly think it’s a case of horses for courses. I like both approaches and the specific nature of the situation will dictate which approach is the best one. Each approach has its strengths and weaknesses. 

For example, the more suppliers you work with, the more chance there is of something going wrong. But the flipside of that is that very few agencies can genuinely profess to being ‘masters of all.’ They are usually stronger on either the interactive media/design side or on the technology side.