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The role of technology in an ecommerce business

Published on 13 June 19

It is obvious that in e-commerce technology plays an important role since the denomination itself (electronic commerce) includes it and constitutes the basic communication and transaction channel. In order to analyze the main elements, decisions to make and key success factors in this area, we will begin by trying to understand the role that technology plays in this type of business.

The technology in electronic commerce is, unlike what happens in many other traditional businesses including conventional commerce, much more than simple support of the activity. It becomes a key area in competitive dynamics. Technology is, in some way, an integral part of the value proposition and, above all, a decisive element when developing competitive advantages. A strategically relevant piece.

Technology in e-commerce

Experience shows that the management and the role played by this issue in projects that have achieved great success in their markets is completely different from that in projects that start from a more traditional conception and environment that seeks to occupy this space. Have you ever wondered why in almost all cases the pure players that emerge from nothing are able to almost systematically beat those who are driven with infinite resources from large multinationals dominant in the traditional business? If we look at the sectors that have already been consolidated in the electronic transaction such as travel, ticketing, books, electronics, and a long etcetera, we see that the leaders in the online channels all of these cases, companies that started from scratch as startups relatively recently relegated the big players of that activity to a secondary role, if not to their disappearance . Let's look at the travel sector for example. Who dominates the digital channel, the Viajes El Corte Inglés, Marsans or Hawk of turn or rather people like eDreams, Rumbo, Kayak, Trivago, Booking ...? Why does this happen?

Large incumbents have an advantage in key issues such as margin due to greater purchasing power with suppliers, with a better brand and with a larger customer base. What do pure players have that the dominant offline operators never have? In almost all cases I dare to say that it is the role that technology assumes within the organization the main key.

The big traditional companies are concerned with "having" good technologies and for this, they usually hire prestigious consultants who advise them to buy expensive software from big brands such as IBM, Oracle or Microsoft. Instead, you will never see a big and successful pure player who has one of these.

The startup achievers are characterized because they understand technology as a factor of competitive advantage, an environment where their activity must know and master develops. They develop a customer-centric culture where technology occupies a prominent role. The CEO breathes technology, the CTO occupies a relevant role and they end up developing their own software which constitutes a base of growth and fundamental development for the success of the company. One such example of startups in Zepper, they create their own POS terminal for efficiency in transactions.

In large multinationals, the CEO tends to underestimate the role of technology, the CTO, if it exists, tends to have a secondary role (that of information technology in many cases) and its obsession is to have guaranteed branded software.

This is a personal opinion that usually generates a lot of controversies but is the result of my experience and observation. To show a button. In one of the big companies where I worked, I posed to sell the technology that we had developed to other possible competitors. Amazon sells its technology to anyone, including its competitors, with which it is guaranteed that nobody will ever be able to surpass him in this aspect ... Another example. When I presented one of my projects to investors, they used to say to me "Nacho, that competitive advantage is copyable" and I told them nothing would make me happier if they copied us. While they copy us, they always go behind and, while, we continue to innovate. We will have the problem the day they stop copying and innovate more than we do

This blog is listed under IT Strategy & Management Community

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  1. 04 September 19

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