By Mark Johnson

One area where many franchises should take stock and resolve to do better is with their internal ecommerce systems and strategy.   

Chances are that businesses that are selling goods in a business to consumer or B2C environment, have   already developed an ecommerce strategy, no matter if they are selling all their wares or just T-shirts and gift certificates. But every franchise business in the world has a need for goods to be requested and shared throughout their franchise system. In other words, every franchise in the world should have an internal ecommerce system and strategy in place, yet many fail to give it the full consideration it deserves.   

Why you need an internal ecommerce system and strategy?     

The core of the franchise system is the sharing and distribution of information, ideas, procedures and assets to quickly enable locations to succeed and concepts to expand at a faster pace than through company owned or individual growth.   

The purpose of an internal ecommerce system is to facilitate the ordering and distribution of all these items necessary to run a successful operation. An internal ecommerce system and strategy provides the connectivity between franchisor, franchisees and suppliers. When fully implemented and leveraged, franchisees can order facility supplies, advertising, promotional products, training materials, incentive programs, digital assets, direct goods and more. Virtually any product from any functional area can be included in an internal ecommerce system. An optimal internal ecommerce system includes:    

  • Marketing Resource Centers
  • Print and promotional marketing   
  • Social and digital marketing   
  • Asset management   
  • HR Resource Centers  
  • Employee incentive programs   
  • HR forms and manuals   
  • Operations Resource Centers   
  • Training manuals   
  • New location opening guides   
  • Ordering Hubs   
  • Centralized ordering for:   
    • Direct goods   
    • Indirect goods     

All of these functions are then delivered from one central place with custom workflow to match your business needs, custom user experience to match your brand and custom reporting and analytics to drive actionable intelligence to inform ongoing strategy.   

The most obvious benefit of a good internal ecommerce system is that it can make it easier for your franchisees to get what they need to be effective. However, a well thought out internal ecommerce system provides much further-reaching benefits. The right internal ecommerce system allows the franchise to maintain consistency and efficiency across the organization making it more nimble, reducing costs, saving time and enabling growth. Identifying Your Current System Strategy   

The first step to succeeding with any New Year’s resolution is to evaluate what your current status is, to step on the proverbial scale. The first step to getting more out of your internal ecommerce strategy is the same: understand what your current strategy is.  

Every organization already has systems and procedures in place to facilitate their internal ecommerce, however, these systems are often dispersed and have not been thought of strategically. For most organizations, the internal ecommerce system strategy falls into one of three categories:   

  • Supplier Provided Systems Many organizations have adopted a supplier provided strategy. In a supplier provided strategy, the technology that powers internal ecommerce is provided by the suppliers of the different required items. For example, your business may have one system for printed materials, another for maintenance, repair and operations items, and yet another for HR materials and so on. This strategy is typically the easiest to implement, but over time can become the most difficult to manage and control.
    • These systems are built to simplify the lives of the suppliers, not the franchises, and typically serve basic needs. Additionally, having multiple systems can make it harder for franchisees and franchisors to do business.    
       
  • ERP/Technology Provided Systems For some organizations, an internal ecommerce system was bundled in as part of the purchase of a broader management information system. Once in place, this or other technology-provided systems can sometimes simplify the process for both franchisees and franchisors. A single point of interface that is tightly integrated with some, if not all, of the systems being used can be an advantage.   
    • For newer and faster growing franchise groups, the cost of purchasing this kind of system, rooted in expensive owned software and an additional purchasing/ commerce module can often be prohibitive. Further, these systems are often not built to facilitate internal ecommerce and have some limitations to their scalability and flexibility for more complex scenarios. Still, this system is not customized to your business needs.
        
  • Comprehensive, cloud-based strategy Every day there is a greater understanding of the importance of internal ecommerce to the success of an organization. Franchise models have always focused on how to help franchises sell and control costs of the direct goods and supply chain. Internal ecommerce certainly has not been ignored, but organizations are increasingly making it a priority to control this process and create greater efficiencies in these efforts by matching systems to their specific business needs.     
    • This recognition, along with the advancement of cloud-based technology has spawned a third strategy for internal ecommerce: a strategy built around a franchisee-centric solution that is cost effective, scalable and custom. These solutions help connect franchisees to franchisors to suppliers and provide a customized, consistent user experience regardless of the products ordered or the person ordering.   

These solutions have come about in part from the growth and acceptance of cloud-based commerce and the lower costs and efficiencies that they bring to the market. The biggest challenge with these systems is they require a strategic approach. Some foresight to implement and an ongoing diligence is necessary to ensure they maximize their potential to provide scalable, economical solutions.   

How to Assess Your Needs   

Once your organization understands what its existing systems are, it can begin to build a more comprehensive strategy that can be leveraged for the franchise. To find out if your system is working the way it should, ask yourself these questions:   

  • How many systems do we have currently for internal ecommerce? Too many systems can slow growth, consider consolidating.   
  • Do these systems aid us in doing business or impede us from doing business? Every system should have a purpose and a business growth outcome.   
  • Does our system provide us a competitive advantage? The best competitive advantage to be gained from a good internal ecommerce system is speed.     
  • Does our system help us reduce costs? That’s what technology is supposed to do, if it doesn’t it may not be valuable anymore.   
  • Do our systems and strategies provide operating leverage and efficiencies?   
  • What systems do I need to integrate with?   
  • How will this system make it easier for my franchisees?   

A strategic approach to internal e-commerce does not always make the top 10 list of things to accomplish. Smart franchisors continue to recognize the benefits that a strong internal ecommerce system can provide; benefits include operational efficiencies, lower costs and higher profits. And that is a resolution that everyone can get behind.   

Mark Johnson is the CEO of Four51, a cloud-based ordering solutions and technology provider to hundreds of franchises across tens of thousands of locations worldwide.

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