Last Updated September 2020:
If you are new to the world of eCommerce, especially SAP eCommerce, you are in the right place. This guide provides a gentle introduction to eCommerce, what it offers and how eCommerce is used by companies that use SAP as their ERP platform.
The first part of this guide will start with a basic eCommerce overview, highlight the specifics of B2B and B2C eCommerce models, provide a high level overview of differences between on-premise and cloud offerings and dive a bit into the relationship of eCommerce and CRM suites that many vendors are now offering.
Second part of this guide will review some of the popular approaches companies take to integrate eCommerce functionality into their SAP systems as well as share some of the lessons we learned when implementing SAP eCommerce solutions over the last 10 years.
What is eCommerce?
eCommerce is a general term that describes transactions that are conducted digitally or on the Internet. If you ever purchased something online, you have used eCommerce. eCommerce is also sometimes used to describe other online actives such as online ticketing, internet banking, and payment gateways, but for the most part, eCommerce revolves around purchasing goods.
In the world of SAP, the term “eCommerce” refers to both online sales activities as well as the software product(s) that expose SAP information like products, prices, inventory levels etc. on a web-based storefront. Customers interact with the eCommerce storefront (web site) to make purchases without the need for somebody, in the seller’s back office, to key-in the order into SAP GUI (…using VA01 for example).
Why should enterprises care about eCommerce?
The core advantage of eCommerce is the unparalleled reach to customers and global markets. With eCommerce, you are no longer restricted to a specific geographical area or time of day.
Even if your current customers are loyal (and local) businesses, sooner or later they will start focusing on efficiency and the first step is usually to explore alternative options to purchase what you offer. This search often starts with a Google search for who offers the products they need, and what is their eCommerce presence, especially how easy is to navigate the site, find what they need, order it and get it delivered.
B2B vs. B2C eCommerce
Two of the most common eCommerce models are Business-to-Consumer (B2C) (also known as Retail eCommerce) and Business-to-Business (B2B). The main difference between B2B and B2C is who is the purchaser – in B2B scenarios the purchaser are businesses, while in B2C it is an end consumer. An example of B2B would be a business selling some sort of material to another business to be used in their products.
B2C eCommerce is probably the eCommerce that you are most familiar with and if you ever purchased something on Amazon, you were part of B2C transaction. B2B and B2C both are 2 sides of the same eCommerce process, where each provides a specialized set of features that cater to either the business or the casual user.
eCommerce & CRM Suites
eCommerce is usually the central point where customers start their interaction with a company (e.g. “Nothing happens until something is sold“). eCommerce systems can be often seen as a “hub” that shares information with other enterprise systems (like CRM, CMS etc.) that service the same customers. Because of this tight relationship, many software vendors bundle multiple (somewhat) independent software solutions and market them as “end-to-end” CRM or Customer Experience suites. Some of the most popular enterprise CRM suites are SAP C4/Hana, Oracle CRM or Salesforce Customer 360.
Let’s look at all what makes a modern eCommerce CRM suite
eCommerce storefront is at the core of any eCommerce system. It exposes a product catalog as well as ordering and checkout functionality. Product catalog is the “star of the show” as this is the main “feature” that customers want to see when they visit the eCommerce storefront. In this sense the qualities that make or break the entire eCommerce experience are directly tied to the catalog functionality. How up to date are products and prices, how easy is to customize the catalog based on customers and geography, how easy is to find the items customers are looking for are all characteristics that directly affect the return of the eCommerce investment. Once customer is ready to purchase, they go through ordering and checkout process. This is where a lot of the differences between B2B and B2C storefronts lie. While both strive to provide a fast and painless checkout, B2B checkout process is usually a bit more complicated as it often requires managing of purchase orders and generally more complicated shipping and payment flows. Popular eCommerce storefronts in the SAP ecosystem are SAP Commerce Cloud (formerly known as SAP Hybris) and WECO eCommerce. Both are specifically designed for a tight integration with SAP ERP. Many standalone eCommerce storefronts such as Salesforce Commerce Cloud, Magento, BigCommerce, Broadleaf Commerce, Sana eCommerce, Kentico are also used by many customers. While they provide good front-end commerce functionality, they often require specialized connectors to move catalog and order data between the SAP and the eCommerce system.
Regardless if you sell to consumers or businesses, when something goes wrong with the purchase (e.g. order was incorrect, was shipped to a wrong place or product is defective), customers usually tend to go back to the place they purchased it seek resolution. This is why, apart from facilitating sales, eCommerce storefronts also often serve as a first level of customer support. Customers expect to find in one place their order history, invoices and various shipping documents that they may need for their internal accounting.
For any issues with the product, they will look for ways to get personalized customer support via voice, chat or by creating a support ticket. This is where the integration with Customer Support systems like SAP C4 Service Cloud or Salesforce Service Cloud becomes important. Service personnel needs to know who is the customer and what is their order history before they can provide the appropriate help.
As an extension to customer support functionality, eCommerce storefronts also often integrate with Accounts Receivable payment portals like ePay or Corevist Bill Pay to give customers ability view and pay any outstanding invoices.
Marketing and Sales
One of the most beneficial (from a revenue generation standpoint) integrations for eCommerce systems is the integration with Marketing automation systems like Hub Spot, Adobe Marketo, Salesforce Marketing Cloud or SAP C4 Marketing Cloud. eCommerce platforms naturally feed marketing automation system with data about what products customers are looking at, which products are usually bought together or how customer interaction changes across geography or time of day. Marketing automation then is used to fine tune discounts, promotions and up/cross sells back in the eCommerce system to provide the right incentive for customers to complete the purchase.
When your customers are businesses and products they buy are complex, big ticket items, the sales cycle is generally much longer. Keeping up with the selling cycle becomes a complex task by itself and this is where Sales Automation systems like SAP Sales Cloud or Salesforce Sales Cloud help. They play a critical role in managing sales process end-to-end by helping track all customer interactions, and offering analytics and highly customized configuration, pricing and quotes (CPQ) through the sales process. Often the CPQ processing is automated so that eCommerce systems, during checkout, can obtain a proper price and quote in real time from the Sales Automation system.
A recent trend in enterprise commerce is shifting focus to Customer Experience Management (CX). With the increased popularity of social media and its direct influence on revenues, it is important to know what makes customers happy (or unhappy). Analyzing customer sentiment and making appropriate corrections is becoming an important lever for both driving revenue and differentiate from the competition. Customer experience platforms like Qualtrics and Birdeye are offering comprehensive solutions to track and analyze customer feedback through surveys at various customer interaction points (for example when customer completes an order).
Vendors will sell individual software components separately, especially if you need to start small or already have an existing Marketing or CRM system, but the tight integration across the entire suite is what makes purchasing a suite a compelling offer.
What functionality can you expect from SAP eCommerce Solutions?
SAP eCommerce solutions generally allow customers to go through the entire order-to-checkout process without ever seeing the SAP system (or even know it exists). Customers access a web store, search for products, place an order and pay for it in a simple checkout flow. What the customer doesn’t see is the internal SAP order processing such as interactions with the payment processor, delivery, invoices and various shipping and warehousing processes that are executed inside SAP.
As we outlined above, the core functionality in SAP connected eCommerce platforms is generally focused on 3 main areas.
- Product Catalogs
- Shopping Cart and Check-Out
- Customer and Order Management
Product Catalogs is what customers see first when they navigate to the eCommerce web storefront. Similar to the paper catalogs from the past, they expose all the products that the vendor is offering in way that (hopefully) is easy navigate and search. In addition to being visible to people visiting the web store directly, eCommerce solutions put significant effort to make the product information readily available to search engines. Large amount of traffic to web stores comes from people searching for products on Google or other (often industry specific) search engines.
eCommerce product catalogs provide a way to organize related SAP materials in a way that makes it easy for external customers to find what they are looking for. In addition to exposing products and their prices, they also provide a way to enhance the product information that SAP already has with rich content such as images, videos, drawings, data sheets, product reviews and other sales or marketing materials that can help convince potential customers to purchase the product from your store (and not continue their search at competitor sites).
As SAP does not natively have a place to store some of this rich content, eCommerce systems usually replicate the product information from SAP into their own internal databases. Multimedia content for products is usually stored and accessed from content management servers that are optimized for high traffic volumes and often located in proximity to where customers are. Depending on which SAP eCommerce platform you choose, the material data, pricing and availability can be show in real time or has to be synchronized daily between SAP and the eCommerce system. Product usually catalogs come in several “flavors”:
- Customer specific catalogs: Only accessible to customers who are allowed by your company. They are often used in B2B scenarios when prices or products are different for different customers.
- Open Catalog: This is the type of catalog that most B2C sites use. Allows everybody to see all products.
- Dynamic catalog: Enhances the standard catalog functionality by generating catalogs based on various data requirements such as customer language, or purchasing history.
- Variant Configuration: Configurable products can be added to product catalogs. Utilizes SAP variant configuration capabilities like characteristics and classes to create configurable products whose final features and price are calculated in real time by the customer.
Both B2B and B2C sites rely on the “shopping cart” approach to select all items a customer is interested to purchase. These items can be selected by picking them from the catalog, by searching, or in B2B scenario, also uploading from a spreadsheet. Once the selection is made, the checkout process allows the customer to choose a shipping method and pay for their order using an invoice or bank account (B2B) or credit/debit card or PayPal (B2C).
Checkout process is also where most of the heavy integration with SAP tends to occur:
- When the order arrives to SAP it has to be “mapped” to the proper SAP Order type. Most often it becomes a standard Sales Order (VA01) but sometimes business rules require creation of custom order types like Inquiries, RFQs, Returns, Fulfillment, etc.
- SAP Partner data such as Sold-to, Ship-to and Payer needs to be properly provided to SAP to match selected SAP order type. In some B2C cases, customers are allowed to choose existing SAP partner data or create new ship-to’s and payers, which in turn requires eCommerce platform to also create the appropriate partner records before the order can be processed.
- Shipping and payment methods are usually configurable and can vary from simple selection options to complex integration with third party shipping and payment processors. Shipping and payment integration with SAP often requires bringing specialized 3rd party solutions that can properly calculate the shipping and tax implications based on the products that are selected in the shopping cart.
Customer Order Management:
Customers would often like to view their order status, delivery status and invoices directly within the SAP eCommerce web store. SAP eCommerce sites usually utilize SAP’s internal document flow, so customers can easily find their related documents. All associated outputs from SAP can also usually be accessed from the eCommerce site. This allows customers to view and print order confirmations, packing slips, BOL’s, invoices, etc.
SAP eCommerce stores often provide a built a functionality for tracking customer browsing behavior. One approach that is often used is capturing a “clickstream” (a raw record of timestamps of user mouse clicks during the user session), to track how long a user stays on the website, what products and areas they visit etc. Clickstream data can be analyzed or transferred for further reporting using standard tools such as SAP Business Warehouse.
What is the best eCommerce platform to use with SAP?
This is probably the question you have been waiting to see answered. The short answer is “it depends”. At present, the world of SAP eCommerce solutions can be grouped into 3 categories:
- eCommerce solutions offered by SAP, such as SAP Commerce Cloud (formerly known as SAP Hybris) now part of C/4HANA. This option offers rich functionality and scalability, while also maintaining integration with SAP for product catalogs, pricing, and shipping information. If budget is no issue, Hybris is a safe choice and well supported by SAP. In addition, it’s supported by a multitude of 3rd party SAP partners that can customize every aspect of the eCommerce site. In some cases, adoption. The main factor to consider when going with Hybris is the time it takes to implement. While the cost of the license may be acceptable (and a few resellers can offer deeply discounted license fees), it is usually the cost of services related to deployment, implementation, and customization that end up being the majority of the cost. Consequently, the limited budget causes many mid-size companies to look for alternatives.
- ‘Off-the-shelf’ eCommerce solutions like Magento, Shopify and BigCommerce. Because of their acceptance and wide use across many industries, these options have a vast community of developers which offers a range of integrations to a variety of ERP systems and 3rd party platforms. These integrations include marketing automation, ad retargeting, and sophisticated eCommerce analytics. Off-the-shelf options are a top choice for marketing-driven companies because they give complete control of the look and feel of the customer engagement experience. They also integrate well into marketing, advertising, and social media channels.
A drawback to using an off-the-shelf eCommerce solution is that since they’re built to be ERP- agnostic they require considerable effort to properly connect to SAP, and more importantly, keep up with any changes in SAP for product catalogs, inventory, pricing and shipping conditions. To keep up with these changes, proper and reliable synchronization with SAP is vital. This can be accomplished by using 3rdparty synchronization platforms such as Corevist, or MuleSoft, or by developing custom in-house synchronization, which typically involves using SAP OData endpoints. In either case, the result is an eCommerce solution made up of three, somewhat independent, parts: the eCommerce platform itself; the synchronization solution; and SAP. In order for the eCommerce platform to function properly, it is critical for all 3 parts to run in unison all the time (…and that synchronization is where issues often arise).
One notable exception in this category is WECO eCommerce. WECO offers a fairly complete SAP eCommerce solution that is tightly very integrated with SAP “out-of-the-box” and provides a very good balance in terms of functionality, cost and implementation effort. WECO is best applicable for small to medium sized B2B companies and over the years has become our preferred solution for many of our SAP eCommerce projects.
- eCommerce plug-ins for popular CRM/CMS platforms such as Sitecore, Broadleaf, Kentiko or Salesforce. Companies that already rely heavily on existing CRM/CMS solutions often find it attractive to extend those solutions with a limited eCommerce capability – usually to offer their customers an easy way to purchase spare parts or consumables. While those ‘extension’ projects usually start relatively quickly and with a low budget, they tend to snowball into a big hassle due to the same synchronization challenges that exist with using an off-the-shelf eCommerce platform
Outside ⇨ In vs. Inside ⇨ Out approach
As far as connectivity to SAP, most eCommerce solutions are built from “Outside SAP ⇨ In”. They start with an existing eCommerce platform (like Magento, Hybris etc.) that is designed to integrate with any ERP system and rely on independent solution to shuttle data (products, prices, orders etc.) between SAP and the eCommerce platform’s internal database. While some eCommerce applications themselves can be Open Source (like Magento), the integration with SAP is usually custom, proprietary, “bolt on” solution built by 3rd parties.
Both approaches have their advantages – Inside-Out systems are great for SAP centric companies as they require no external hosting and can be managed day-to-day by internal SAP resources. “Outside-in” solutions are a good fit for companies whose systems are already distributed and data (e.g. CPQ, payments, shipping, etc.) already lives across multiple systems and can afford resources for hosting and managing data synchronization between them.
“Headed” vs. “Headless” eCommerce
eCommerce platforms have a difficult task to balance 2 somewhat conflicting forces. On one side, they serve as a marketing tool to draw and keep customers engaged by providing a fresh, easy to navigate, polished and constantly evolving user experience. On the other side, eCommerce platforms have to execute complex business processes like checking availability, pricing, discounts, shipping, recommendations etc.. Mistakes and “bugs” in any of these processes can be embarrassing (and costly). Think of a bug in the tax calculation logic that misses collecting a tax from the customer, or coupon that supposed to give 5% off but instead is applied as 500% off. With tens of rules that are in play in a typical eCommerce scenario, you can see the nightmare and extensive testing that each of those rules needs to go through.
User facing pages of the eCommerce websites are the usually the battlefield where those 2 forces collide. Marketing department wants to experiment by making constant changes to the web site, adding content, moving things around in an attempt to make the web page a little bit more “sticky” or sells one more product. To engineers who are responsible for making sure all business rules are always working, any page change is a nightmare – every rule that is triggered in the page has to be retested. All planning and testing takes time and effort, so engineers try to discourage any changes to minimize the risk of something breaking.
The evolution of technologies for building web pages, often caused the code for the business rules that a page executes to be intermingled with page’s code for the User Interface components (buttons, tables, sliders etc.) so changes to the look and feel, also often caused related changes to the logic that triggered various business rules (e.g. adding a new way to add/remove products to a shopping cart, needed also to trigger the appropriate business logic to recalculate pricing, discounts, shipping etc.). This dependency required the developers of the web page to be aware of what business rules are attached to what UI component and investigate how they will be affected if the element is moved, removed or redesigned.
“Headless” eCommerce approach tries to eliminate the dependency between page’s “look & feel” and business logic by enforcing a clear separation between the two. The term “headless” denotes that the core of the eCommerce platform does not have ANY user interface (or “head”). The platform is is delivered as a collection of business rules exposed through a set of clear APIs or microservices. This separation allows the User interface to be written in any web technology (React.js Angular.JS etc.) and evolve independently from the business logic and vice versa. This also provides an extreme flexibility to change and test the presentation or business logic independently of each other, as well as reuse the business logic in a variety of interaction scenarios ranging from Web Pages, Voice Control, Chat Bots and IoT devices (e.g. an IoT sensor can trigger a reorder of material using the same logic as if ordering by a human via a web site.). To encourage the adoption of this model, some vendors even provide purpose built open source web UI components that can be used to build complete web sites with their headless eCommerce solution.
Headless eCommerce is still in its early stages with two of the more popular platforms SAP Spartacus (based on Hybris) and Elastic Path being the more mature offerings at this time. Over time other eCommerce platforms will eventually start moving in this direction as it offers more flexibility and greatly simplifies the development and support.
The rise of Cloud eCommerce
Nowadays vendors tend to liberally use the word “cloud” when they name and advertise their products. Names like “SAP Commerce Cloud”, “SAP Sales Cloud”, “Salesforce Sales Cloud”, “SAP Marketing Cloud”, “Salesforce Marketing Cloud”, “SAP Service Cloud”, “Adobe Experience Cloud” are all signs of a recent trend in enterprise software – transition from on-premise to cloud offerings.
The term “cloud” means something different to different people, so here is a quick primer on how the term “cloud” is mostly used in relation to SAP eCommerce. Most software solutions can be grouped based on:
1. Who owns and manages the hardware the solution runs on and
2. Who owns and manages the software itself (e.g. perpetual license vs. subscription)
Here are the possibilities:
- On Premise Model: BGI purchases Hybris from SAP and builds eCommerce solution that it runs it in its own data center. BGI owns the Hybris license and pays maintenance fees. BGI owns the hardware, and BGI IT team installs, manages and configures Hybris. BGI is also responsible to plan for any extra capacity they may need to handle their holiday traffic. BGI staff needs to be able to upgrade and patch Hybris itself, the machines Hybris runs on (e.g. Install Windows/Linux patches) and fix any hardware and network issues.
The main benefit of this model is that BGI engineers can fine tune any aspect of the final solution – from networking to machine hardware to squeeze as much as possible from their hardware and software investment. They can also customize Hybris in any way they want to fit their business. Downside is that BGI needs to have engineers with a wide range of skills to support all the moving parts in a complex eCommerce system 24/7. This model is mostly used by large, companies that already have (..or can pay for) all that skills, expertise and infrastructure.
- Public/Private Cloud Model: BGI purchases Hybris license from SAP and builds eCommerce solution. They still pay for Hybris license and maintenance, but rather than running it on BGI’s owned hardware, they rent the hardware from a cloud data center owned by Amazon, Google or Microsoft (or multitude of other cloud providers) . BGI is still responsible to install, manage and configure Hybris itself, as well as patch the machines Hybris runs on (e.g. Install Windows/Linux patches), but it does not need to worry about fixing or upgrading the hardware or network connectivity. Also, the hardware cloud provider will willingly (and temporarily) rent more machines when they need extra capacity during the holiday season. BGI can fine tune their Hybris install but is at the mercy of the Cloud provider for every networking or hardware outage they encounter.
- Vendor Cloud Model: BGI rents Hybris (in this case called SAP Commerce Cloud) from SAP. SAP will “rent” both the software as well as the hardware. The final solution will run in SAP cloud Platform in a data center managed by SAP. SAP will be responsible to manage and scale the entire solution. This model outsources most of the day-to-day management of the eCommerce system to the cloud vendor using “pay-per-use” model.
The disadvantage of this model is that, similar to a rental house, there are certain constrains that the “landlord” (cloud vendor) imposes on what customizations tenants can do to their rented Hybris installations (because they need to support the overall system). If you are interested to learn more about SAP Cloud, quick overview of SAP Cloud can be found in our SAP Cloud Platform: A High-Level Overview blog post.
Historically the trend has been to move from On-Premise towards Vendor Cloud. Vendor cloud is where most vendors want to eventually migrate to as it generates a recurring revenue and they can optimize their investment in hardware and operations to service more customers with less resources (which increases their profit margin).
Vendor Cloud is also a good solution for many small and medium size customers as it lowers the barrier of entry. They can now “rent” an enterprise grade eCommerce system without the need for a large initial investment. This also aligns the cost for running the eCommerce system with the revenues generated by their eCommerce channel. This alignment is a key for many smaller companies who are transitioning from traditional “phone/fax” sales to an online sales model and want their eCommerce revenues to offset their eCommerce expenses. As of now, the industry is split roughly 50%-40%-10% across the three models.
What to look for when implementing SAP eCommerce solution?
As a conclusion to this (long) guide, we would like to shares some of our experience delivering SAP eCommerce solutions over the last 10 years.
Each company has a set of specific requirements and processes for selling their products. When researching SAP eCommerce solutions, usually the attention is focused on how various products stack against these specific requirements. All vendors have a good set of “battle cards” to highlight how the catalog or shopping experience or whatever other feature of their product is better than the competition. As far as functionality any fit (…or misfit) is easy to spot ands asses. What is not very obvious during the evaluation phase is the overall picture of how everything will work together and how long would it take for the eCommerce store to start bringing revenue. Over the years, we used the following 4 questions to uncover some ‘hidden’ concerns that could have a substantial impact on the success of any eCommerce project:
- How does an eCommerce site fit in the company’s overall web presence? Larger businesses usually rely on a separate CMS system as their main customer-facing web site, and the eCommerce platform is a “new” web property that is customized to fit into the overall corporate brand. For smaller enterprises, the eCommerce solution must serve a dual role: both as an eCommerce platform; and a customer facing web site. In this case, the chosen solution needs to support at least some Content Management functionality and customization to enable the marketing department to adjust the public messaging without requiring the involvement of IT.
- Who is responsible to control and support the eCommerce solution – Marketing? Sales? IT? Based on the availability of internal resources there is usually a tradeoff between increased visual richness and flexibility that Marketing department wants (at the expense of using more resources to support it), or the eCommerce solution can be supported with limited resources (usually those already supporting your SAP system) at the expense of somewhat limited visual presentation. The right choice depends on your situation, but if not considered properly, it can become inconvenient and costly in the long term.
- What is the budget for deployment and customization of the eCommerce solution? License costs are usually known upfront and don’t change once the project is signed, but the implementation can account for 2X to 3X the cost of the license, and frequently is the area where most cost overruns occur.
- How long can you afford to have your resources involved in deploying the eCommerce platform? Even if most of the work is done by a 3rd party, there is usually a core team of your own resources who’ll need to be directly involved. They’ll make key decisions (as well as compromises) that always pop-up in the process of implementation and going live. In our experience, supporting the implementation takes approximately 10% – 50% of their working day, which can’t be spent on their core responsibilities. If your implementation takes 3 months, this may cause a manageable impact. If it takes 8, 12, 18 months, the hidden cost of your resources’ involvement can be felt as your other internal projects are getting delayed or put on hold. The cost of internal resources is rarely budgeted for, yet adds up quickly to the overall cost of the project.
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