Hi there valued community,
As part of my role at commercetools, I’m working with our prospects and customers on analyzing the Total Cost of Ownership (TCO) and other technology spend metrics for e-commerce businesses.
However, finding reliable sources of information (independently verified), can be a challenge.
I would appreciate your insights and experiences on this topic.
Specifically, I am looking for information on the following:
- What are the key metrics and factors to consider when technology spend (levels) in commerce?
- Are there any reliable sources, reports, or tools that you have found helpful for gathering data on e-commerce technology spend and / or effective benchmarking of this spend?
My take is that as part of a TCO analysis, its relevant to consider the Total Cost of Change and Total Spend Productivity. Benchmarking with independent data can be challenging.
I understand that this can be a complex subject, so any guidance, best practices, or resources you could share would be greatly appreciated. Thank you in advance for your valuable input!
welcome @Sven_van_Hegelsom! what a topic!
Thanks Hendrik! Any suggestions?
This is likely to be hard
It’s the sort of analysis that the bigger consultancies (i.e. Deloitte, Accenture, KPMG, McKinsey, IBM etc.) perform and treat as IP. Sometimes they will publish summary reports.
Ditto companies like Gartner (and may be one of their enhanced subscriptions, not in a basic package), Forrester, etc.
Apart from that need to trawl websites like Business of Fashion (some of which is paywall) or trade magazines and see what shows up. Or maybe commercetools sponsor someone like RSR research to do a survey for you (that would be long burn and would need to be wrapped up in a wider set of questions).
Of course individual retailers will develop their own business cases and budgets; ultimately quantifying various benefits (especially for a replatform) vs. EBITDA improvement (or other metrics like company valuation improvement/stabilisation)
Hey @Sven_van_Hegelsom , Happy to connect you to a few folks I know on the data intelligence side of things. Great topic.
Thanks Vinny! I will reach out to you via Linkedin to set something up.
Hi Miles thanks!
I’d like to show to customers that on average (leading) companies spend about X-Y% of their revenue to innovate/change/run digital commerce capabilities. Historic data would be great to show whether there has been a lack of investment in the past years or not.
I’ve thought of Gartner too - couldn’t find anything directly to benchmarks specifically to commerce IT spend (they do general benchmarking though). Have you seen anything specific to commerce?
@Sven_van_Hegelsom I haven’t seen anything specific (and Gartner searches can be hit and miss, especially for their more “advisory” products that were more the territory of AMR before Gartner took them over). If you have a Gartner subscription it is the sort of point data question you could get in a 30 minute 1:1 with their domain expert, but a fuller report may need a specific subscription.
To get the data you want, maybe look at annual company reports for listed pure-plays (Sales expenses for run, Capex/R&D for change/innovate)? Will need detailed financial analysis to try and remove bundled costs.
Thanks for the suggestion! I will connect with Gartner and see what they have. Limited time to do a detailed analysis for annual reports but good idea (can pick this up maybe later)