By Michael Anderson
CEO/Co-founder Etail Solutions
After an interesting conversation with some team members today, I found myself thinking about SimCity, a game I haven’t played for at least a couple decades. After checking today, I can see that it has come a LONG way since I looked at it last!
The question that prompted the thought was effectively “How should a company look at building an ecommerce empire?”
As a company that has been “in the biz” for a dozen years working on all sorts of interesting ecommerce scaling problems, the image I got in my head was that this is not just one problem to solve, it is dozens of significant problems, made up of hundreds of small problems as well, and they are all interconnected.
Its not so different from SimCity when you really think about it. If you are not familiar with the game, here is a quick primer borrowed from Wikipedia:
“SimCity titles are real-time management and construction simulators. Across most titles, the player (acting as mayor) is given a blank map to begin and must expand the city with the budget provided. As the city matures, the player may be able to add government and other special buildings (such as a mayor's house or courthouse), depending on how large the city is. Proper management of the city requires citizens to be provided with basic utilities (electricity, water and sometimes waste management) along with public services such as health, education, safety, parks and leisure facilities. These are provided by building relevant buildings or infrastructure, with each building covering a circular "range" in its vicinity. Inadequate funding of these services can lead to strikes or even urban decline.”
In the ecommerce world, if you are a brand or online seller, you are constantly balancing numerous end-points, integrations, inventory, people and facilities that drive the overall success, revenue and profit/loss of the business. There is a never-ending balancing act of how you balance investments in growth and infrastructure with how quickly you are driving revenue. Using this analogy, here are just a couple of interesting parallels to ecommerce :
- Do you know and understand the impact and priority of the assets you are building?
- When should you invest in roads, utilities, parks, housing projects, etc. (technology, tools, product, integrations, etc.)?
- How do each of these investments impact growth?
- Are you building your roads (think integrations) wide enough to handle the traffic?
- Are the “roads” designed and built in a way that allows you to connect the right facilities (systems) to ensure that the needed supplies (inventory feeds, content, orders, etc.) are getting efficiently (minimal cycle-times) to the right locations to avoid strikes/urban decline (overselling, inefficient delivery times, ticked off customers)?
- Do you have the right tools to allow you to support the properties/utilities (sales channels) that will attract and support more citizens (customers) which drives tax income (sales revenue)?
- Once everything is connected, do you have the appropriate oversight and monitoring to be able to watch how things are performing and be able to adjust quickly when you see problems?
At a certain point the analogy (like any analogy) breaks down, but the concept of embracing and understanding “systems thinking” still applies.
Successfully scaling ecommerce into an empire has a lot of moving pieces that impact each other. Having a centralized approach to the right strategy, insight, understanding, and ultimately a control tower to manage it all, can make all the difference.