Featured contributors: Chris Brabender, Lead Magento Developer, and Nikola Lazic, Architecture Engineer
When Magento Enterprise first hit the market in 2008, there was some skepticism that a traditionally open source and no license cost ecommerce software could be adopted by larger organizations. Since then Magento Enterprise has evolved from a technology disruption to an industry analyst-validated application for the broad swipe of the market, including first generation, high potential volume ecommerce initiatives, medium-sized businesses, and emerging enterprise merchants.
The launch of Magento 2 underscores this evolution to a modern enterprise-grade platform. Whether your business is currently running on a previous version of Magento or you are considering a replatform, Gorilla Group recommends placing any investment into scale, marketing, and features and function, and not tirelessly trying to bandage or “keep the lights on” with an outdated commerce platform.
As exemplified in Gorilla’s recent Magento 2 launch of Canadian omnichannel pet supply retailer, HomesAlive.ca, the business case to migrate to Magento 2 hinged mainly on reallocating maintenance costs to investments in stable technology and growth potential. As Homes Alive continues to scale their physical and digital footprint, their decision to select Magento 2 as their next platform was strengthened by a robust roadmap which has already come to fruition since selection. More to come on this later.
Magento 2 features that have resonated well with merchants include enhanced content and commerce capabilities, content staging, tightly integrated order management, and the ability to run both direct to consumer and business to business operations on a single platform. This gives merchants options and could alleviate the fear of “outgrowing a platform” in upcoming years.
That said, we understand that a business case will still have to be made, so here are a few ideas to take into account beyond just implementation costs and licensing of the software.
Key Business Case Considerations when Evaluating a Magento 2 Migration:
- Evaluate your existing cost of platform maintenance and assume a large percentage (usually greater than 50%) will decrease with a stable platform.
- Review projected future online revenue taking into account the past 3 years of revenue data and then build conservative, moderate and aggressive growth plans (the factors will depend on your business model and industry) to get a cross section of anticipated growth.
- In order to determine a budget for the upfront cost of the replatform be sure to review past costs of building and customizing the existing platform over the past 3 or more years. Be sure to include services fees as well as internal resource costs and salaries. This is important if the baseline goal is to establish feature/function parity from current to future site.
- To further hone in on platform migration budget, Forrester recommends using a factor of 5:1 cost of upfront implementation to platform licensing costs. If the capital expenditure becomes more than expected, Gorilla Group could provide options to allocate that cost over time as an operational expenditure.
- If expanding upon a B2B footprint, evaluate existing costs and error rates of B2B transactions if the order placing is managed in an outdated platform or via phone or fax. Assume that there will be a significant decrease in costs associated with errors and more efficient self-service transactions for your customers.
- Evaluate B2B digital commerce for the business in general. For a business looking to make their first foray into B2B, Magento has proven to be effective at leveraging B2B and direct-to-consumer experiences. For instance, Saltworks partnered with us to create a single commerce experience, which could help achieve their multi-faceted goals for business and consumer customers.
- Review the Cost Per Acquisition of current customers and assume that this will decrease with enhanced brand exposure. This is especially true in a B2B model where lead generation and new accounts are a focus area with the replatform.
- Evaluate existing costs of integrating legacy systems handling Order Management and consider if an Order Management System (OMS) upgrade is necessary.
- Consider current site conversion rates and understand that those rates may increase by leveraging the superior performance enhancements and page load times across devices.
- For older sites: Examine your bounce rate and conversion across desktop and mobile. All Magento 2 builds will utilize responsive design and will enhance the buying experience for mobile traffic.
- For existing Magento sites: In 2017, Magento will cease to support any Magento 1.x sites in any capacity, including security patch updates. Migration is essential to maintain a secure and PCI-compliant platform for the future. Costs associated with PCI compliance, and even worse, customer data breaches, should be important consideration factors.
- >Upgrades: With “seamless upgrades” being a core tenet of SaaS platforms for years, Magento has made great strides towards making Magento 2 easier to upgrade with improvement to the overall site architecture. Using service contracts means modules and customizations have less effect on Magento’s core code and result in smoother, faster upgrades.
- Site Performance: With additional up to date technology such as PHP 7 + Varnish for caching, the sites will see a boost in page load speed and performance especially during high peak periods such as the holiday season. As discussed in the business case, this has tangential benefits such as conversion rate increases and page load, which is a ranking factor in SEO.
- Order Processing Performance: The architecture of Magento 2 has allowed for split databases for both business and backend processes, including checkout, to alleviate peak order stalls and reduce IT resources needed to manage those instances.
- Checkout/Conversion: With hundreds of thousands of merchants running previous versions of Magento with an almost uniform checkout process, Magento reviewed data and took a best of breed approach to efficiency and user experience to provide a streamlined and performant checkout process.
- PayPal/Braintree: The break from eBay has allowed PayPal to flourish in innovation, and their bonds with Magento remain as strong as ever. PayPal and sister company Braintree have truly become a standalone Payment Gateway with the release of Magento 2.1. Now featuring saved credit cards and an in-context, modal checkout experience, PayPal speeds the customer’s path to conversion and eases the merchant’s burden to maintain PCI compliance. Braintree’s hosted fields allow complete creative control over the look and feel of checkout while using small, transparent iframes to securely gather and transmit payment data.
- PCI Compliance: Besides Braintree and PayPal, all of the native Magento 2 payment methods have been redeveloped from scratch to support lower PCI burden technologies such as direct post.
- Content: As the lines between Content and Commerce blur, we have seen traditional commerce-focused platforms enhance their capabilities regarding content production, staging, and deployment of non-product content pages. Magento 2’s staging capabilities will allow for marketers to deploy content without the assistance of IT of development resources to launch that important how-to guide, feature list, blog post or explainer video easily.
- Promotions: In addition to the robust content staging, Marketing and Merchandisers could stage promotions and incentives concurrently, view how they interact, preview changes in the "day of" mode, and go through checkout to confirm all discount rules apply as intended. Case in point, a sportswear retailer, anticipating a series win from one of their most popular teams, could premtively stage a congratulations post, hero image, and placeholder content celebrating the win, schedule a promo code and, most importantly, test everything before peak traffic hits.
- B2B: The mandate for businesses to adopt B2B digital commerce within a variety industries over the last couple years has been clear and the B2B commerce footprint is rapidly expanding to include product as well as services sold online. Additionally, traditional B2C companies are preemptively expanding their platform capabilities to include a B2B foundation, including functionality for user hierarchies and purchasing workflows and tight integrations with their important downstream back office systems. In the end a unified platform provides substantial benefit in lowering maintenance overhead and increasing platform usability through an enhanced feature set.
- User Experience Functionality Components: Enhancements that have been conducted to the site over time should be evaluated to determine if the functionality is still being used by your end consumer. Is this an opportunity to decommission that blog, gift guide, or product selector widget that was a key initiative several years ago. In some cases Gorilla has found that less is more and complete feature to feature parity from your existing platform is not always the best course. Funds to rebuild a module not driving value could often be better spent in post-launch marketing, and A/B testing, and revenue driving initiatives.
- Back-End Data Migrations: The first step is to evaluate the porting of online catalog content from your current system and understand that some data cleansing and data creation may be necessary depending on the status of available product information. You should also consider if and how to port existing customer and corresponding order information into the Magento platform or if this will be a net-new initiative. Magento has accounted for existing Magento customers and their need to maintain site data as they upgrade to Magento 2. With this goal in mind Magento has created a robust and extensible set of data migration scripts to help solution providers and their clients port legacy data, and to ensure existing customers have a smooth transition to the new Magento 2-powered site.
- Module Availability: If your existing site uses 3rd party modules and middleware, this is also an opportunity to review the data integration and determine if the software connector is supported pre-built into Magento. In cases when migrating from an existing Magento platform, Magento has provided an extensive program to ensure quality and compatibility. The most up-to-date list of approved 2.0 modules can be found here.
- 3rd Party Integrations: It is understood that some existing back office systems (such as the ERP) are mission critical to your downstream business beyond the ecommerce channel. The effort level associated will depend on the number of current “hooks” into the system(s) and the frequency with which you require those systems to communicate. For good reason, many IT personnel will pay close attention to service providers with experience integrating with specific software platforms due to past work. Luckily, Magento 2 Enterprise Edition has alleviated known fears of cumbersome and often costly 3rd party integrations with its asynchronous queuing technology. Without getting overly technical, this simply means more robust “piping and wiring” in place natively to connect data to another system. Understanding and documenting your existing commerce system ecosystem in a flow chart is a good exercise to understand the data flows into and out of the platform.
Features, Functions and Underlying Technology
We encourage any company evaluating Magento 2 Enterprise Edition to set up a demo and discussion where we could provide a deeper dive into the following enhancements. These elements should be evaluated against not only current Magento 1.x functionality if you are a current Magento merchant, but also competitive platforms.
How to Pre-Plan for Replatforming to Magento 2
Similar to most major platform upgrades, audit processes should be taken into consideration when upgrading to Magento 2, regardless of existing ecommerce platform. Gorilla has provided the following high-level examples, but for a more comprehensive evaluation, please refer to Gorilla’s Ecommerce Replatform Checklist whitepaper.
With several Magento 2 clients transacting millions of dollars to date, and several more approaching the launching pad, Gorilla Group will continue to share innovation with the next generation of Magento merchants. Feel free to reach out for assistance with full replatforms or platform shifts from a legacy Magento application. Our team will help you get on the right path to stability, scalability and growth of your ecommerce operations.