Last modified: April 17, 2018
Bringing IT systems in-house can be a costly mistake.
Data is king. So it makes sense that companies want as much control over customer data as possible. Brands also understand the importance of having a highly engaging ecommerce experience. To this end, some companies want to bring all of their IT systems in-house to increase control over their data operations and digital platforms.
While certainly a logical progression, this also is a tremendous mistake. The risks associated with building out IT infrastructure far outweigh the rewards. Brands would be better served both strategically and financially by partnering with IT companies that specialise in ecommerce and can help brands avoid potentially disastrous service interruptions.
Bringing IT systems in-house requires a large upfront investment in servers, backup and recovery systems, IT personnel, and other infrastructure. But the costs don’t end there. As technology changes, brands have to pay to update hardware and add to their existing system year after year. Evolving consumer demands for things like AI, same-day delivery, and fingerprint-enabled payments mean companies are always playing catch-up in their effort to provide the highest possible UX. This also raises issues of system integration, creating a huge burden for IT personnel. All of these costs can add up to millions of dollars in IT infrastructure that still isn’t guaranteed to effectively support your ecommerce destination.
One of the most consequential risks in building IT infrastructure comes in trying to predict how the systems will be used down the road and match capacity to fit those predictions. At the start of the procurement cycle, brands have to build out capacity to match peak traffic spikes that may only be needed in the future. This can be extremely difficult to predict, and a simple miscalculation can cause platforms to crash at the worst possible time.
Even large brands get this wrong all the time. I remember a major company that lost millions of dollars when their servers crashed on Black Friday, not only costing them revenue from those transactions, but also damaging their brand identity and reputation with customers.
This is perhaps the biggest risk in bringing IT systems in-house. Your ecommerce store is your flagship store globally. It’s the most visible part of your organisation and your biggest marketing channel. If consumers don’t have a positive experience when visiting your site because of service disruptions, your brand value suffers. It’s crucial to partner with an IT leader that can guarantee flawless service while supporting your other ecommerce strategies.
Benefits of IT partnerships
Partnering with an ecommerce leader is the best option for any company looking to avoid the risks associated with in-house IT operations. Contracting IT system management allows companies to avoid upfront cost of infrastructure procurement while also negating the need to predict traffic patterns and peaks.
Ecommerce companies continually update their software and hardware to account for changes in technology, allowing partnering brands to remain flexible as consumer demands change.
Having a reliable ecommerce partner gives brands world-class infrastructure that provides economy of scale and a more cost-effective pay-for-use model. All of these benefits free brands up to focus on more strategic initiatives while having peace of mind knowing their ecommerce systems will support any innovation they come up with.
Stick to your strengths
The main lesson for brands is simple: if you’re not an IT company, don’t try to become an IT company. Stick to your core business and excel in providing that service to customers while allowing an ecommerce partner to handle the hassle of IT system management. There’s simply too much at stake to go it alone. Be the brand you’ve always wanted to be, and let ecommerce innovators take care of the back end.