February 25, 2009, 12:00 AM

Retailers should ask questions before ceding control to an on-demand vendor

Retailers must ensure an on-demand platform vendor is financially healthy, offers a robust infrastructure, and enables thorough testing and results reporting, experts advise.

When a retailer uses an on-demand e-commerce platform vendor to operate its site, it must cede some control to the vendor. As a result, it must have full confidence that a vendor will be a helpful and reliable partner. This means asking questions before signing on the dotted line.

One question a retailer should ask concerns the financial health of the vendor and how much money the vendor puts behind research and development and meeting compliance standards.

“If a supplier’s financial health is weak, they may not be investing properly in keeping their technology current,” advises John Marrah, CEO of e-commerce platform provider ProfitCenter Software Inc. “Their technology may have the latest bells and whistles but it may not be compliant with security standards like PCI or internal auditing standards such as Sarbanes-Oxley, which are essential.”

Infrastructure is another key issue that a retailer should address before deciding on a vendor, experts suggest. The retailer should verify the redundancy of a vendor’s platform to make certain the vendor has adequate infrastructure to not only handle spikes in traffic but also keep clients’ web sites operational in the event of technical problems or disasters, says Jeff Max, CEO of e-commerce platform provider Venda Inc.

“When a web site goes down or pieces of it are not functioning properly because the platform can’t scale to the volume of traffic, it costs retailers business and that’s something they can’t afford to have happen, especially in today’s economic climate,” Max says. “The resilience and redundancy inherent in the multi-tenanted model protect against this kind of calamity.”

And testing is a critical factor to be considered before signing with a vendor, experts say. It is in a retailer’s best interest to become familiar with a vendor’s testing procedures and make certain results can be made immediately available to the retailer, says David Murken, national sales executive, on-demand communications, at e-commerce platform vendor CDS Global Inc.

“There has to be visibility in testing to be sure it is being done properly,” Murken says. “Transparent testing is the best way to prevent performance problems before a change to a web site is rolled out.”

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