Having been deeply involved in the FMCG wholesale industry for years, I have witnessed many companies seeking transformation and upgrading to build B2B platforms. In interacting with these transforming entrepreneurs, I found a common confusion: how should the information system platform be established? Should we buy off-the-shelf products or build our own team for in-house development? Below, I will briefly elaborate on the ten challenges faced in the process of building an information platform.
1. How much does it cost to develop a system? A few thousand? Tens of thousands? Hundreds of thousands? Millions? Tens of millions? There are various answers, and the gap is huge! This is due to different levels of attention and cognitive height towards new things. It's like an outsider asking an insider how much it costs to build a 10,000-square-meter warehouse. The cost standard mainly depends on business needs at different stages. As business changes, the system must match business needs, requiring continuous R&D investment and technological innovation to support long-term development. For internet platforms, users' high dependence on the system and picky experience requirements mean the system will only become larger, and R&D division of labor will become more refined. From extensive operations to fine division of labor, everyone becomes a screw or nut, with quality increasing but costs rising. Is this progress or regression in management? Some also say that after the system is developed, we can cut most technical staff and keep a few core people for maintenance. If it really comes to that, we can label it 'terminal cancer'. I have also met technicians who talk about one-off deals, saying 'such a system can be done in 3 months for 500,000', and I can only smile. Seven years ago, I fell into such a pit. Not to mention the capital cost, what hurt me most was wasting ten months of time. This lesson proved again that 'there is no shortcut to success; shortcuts may be your highest cost'. In the B2B industry, Zhongshang Huimin and Zhanghe Tianxia both have large R&D teams, but they still choose to cooperate with professional technology companies like our Zhongke Shangruan. We all know that R&D costs are a bottomless pit. To sum up with an industry saying: 'The system is always a semi-finished product!' 2. How long does it take to develop a system? According to conventional standards in the software industry, building a mature and stable product requires at least more than three years. Even after three years, the product's functionality may still be relatively simple, lacking practical experience from a large number of user cases. A good product is definitely not developed behind closed doors. The product manager's familiarity with the industry, comparative analysis of various research data, eliminating false business needs, extracting efficient solutions, rigorous and thorough analysis of various business logic possibilities, including future business expansion, writing detailed and reasonable requirement documents, and drawing prototype diagrams for each functional module's details, describing the backend calculation logic for each text or button—all this takes a relatively long time. The B2B industry has various models that conflict with each other in information management. How to make trade-offs is the hardest to control and the most error-prone. You cannot create a system that is neither fish nor fowl, unless you create different versions for different models, but that requires a separate team to develop in another direction, doubling costs. If multiple models are mixed together, it may seem user-friendly on the surface, but the consequence is that the system is too large, limiting future scalability, with too much code and complex logic, leading to slow operation, increased error rates, and poor user experience. When communicating with many entrepreneurs about models, I found that many are not particularly firm about their business model and change it at any time. A single conversation might change the company's direction and business model. In fact, technical engineers fear uncertain requirements the most, as they have to modify repeatedly. It's like drawing on a blank paper with a pencil, erasing and redrawing; after several times, the paper is ruined. To sum up in one sentence: As long as the enterprise can survive, the system development time will be that long. 3. What kind of system architecture do we need? System architecture is a deep subject, but it's easy to understand. For example: To build a family house on an empty plot, we only need ordinary construction workers; if we want to build a residential complex, we need to consider water pipes, sewers, gas pipes, strong and weak currents, transportation, lighting, etc., requiring multiple professional teams to work together; if we want to build a city on an empty plot, we need to consider every aspect, hire top experts to design and build, and then have several professional senior companies to execute. Your needs determine how large your architecture should be, and whether the investment and returns match. A family cannot live in an empty city, and a city's population cannot live in a single house. Some people greedily say, 'Just build me a city directly, don't worry about whether I can use it.' But what are the resources and costs required to build a city? So we need to be pragmatic. Don't always compare with Taobao or JD.com, saying how rich their systems are and how smoothly they run. Those are built with real money. You want to build a system like theirs with a few hundred thousand when they spent billions? Wake up, stop dreaming. In our country, truly top-notch architects are rare, and they are monopolized by national institutions or BAT companies. Ordinary companies cannot afford them, but the difficult-to-crack technologies are in their hands. To solve difficult technical problems, we have to find ways to network and find people, inviting them over for tea and chat at a friend's price of 10,000 per day during their rest time, to enrich the R&D team's knowledge. I remember in Beijing, some big bosses drove luxury cars as Didi drivers, waiting at the entrances of large internet companies late at night to pick up passengers. Once passengers got in, they would ask about their resumes, and if suitable, they would negotiate terms on the spot. Talent is so scarce that truly capable people never need to post resumes; they are poached by BOSSes. My suggestion for distributors doing B2B is to do what is appropriate for the current stage, not too advanced or too backward. Don't pursue perfection excessively in some areas. We are essentially using 20% of the money to do 80% of the work, not 80% of the money to do 20% of the work. First achieve 'quantity', then pursue 'quality'. 4. What kind of technical team do we need? Enterprises need to introduce different talents at different stages. The team building must be proportional to the enterprise's growth. Here I only talk about the core part: 'Whose money is being spent?' For example: The hired CTO will continuously propose conditions, requiring a clear and sound organizational structure and job responsibilities, staffing according to the specifications of a formal company, and good employee benefits to retain people. Can you say the CTO is wrong? You can't find any fault. But if the R&D team is built with your own money, it's completely different. You won't hire people who are dispensable at this stage, you won't hire full-time staff for work that can be done part-time, you won't postpone work that can be done overtime to the next day, benefits become chicken soup for the soul, and you will try to transfer costs wherever possible. The FMCG industry is a hard business with thin profits. It's not easy to save money. Don't spend money on things you are not professional in. Find professional people for professional things. Everyone has their expertise. 5. How to translate business needs into technical language? We often hear about arguments between the marketing department and the technical department. Standing from their own job responsibilities, neither seems wrong, but things often don't go as expected. For example: One day, a wife asks her husband, who almost never does housework, to clean the house. She says, 'I have to go out urgently today. Clean and tidy the house properly.' She leaves immediately. The husband is helplessly given a task with no standard of measurement, doesn't know where the cleaning tools are, and is unclear about which areas to clean. He calls his wife repeatedly to ask where things are and whether to throw things away. The wife, receiving calls constantly, thinks, 'A grown man can't even do housework properly. He's useless.' The husband feels wronged, thinking, 'She asked me to do housework but didn't tell me anything specific. How am I supposed to do it? I might as well not do it.' I use this example to show that technical R&D personnel are rigorous and single-minded. You need to tell them every step and standard, and they will follow your process and standards. But marketing personnel don't have that patience. At this point, you need a product manager who understands both business and technology to bridge the gap. The product manager must anticipate all possibilities that the marketing department hasn't thought through. Such people are rare. Problem summary: R&D is a systematic project; all parts are indispensable. It's definitely not about hiring a few people who can code to produce a system. The water is deeper than you think. 6. How to measure the speed and quality of R&D? As the saying goes, 'Outsiders watch the excitement, insiders watch the craft.' Outsiders only propose requirements and demand quick results, not caring about the quality of the program. A exaggerated example: Flying from Beijing to Shanghai, normally it's shortest to fly south, but can you fly from Beijing in the opposite direction around the earth to reach Shanghai? Theoretically, it's possible, but the difference is huge. The goal is the same, but from a computer's perspective, the difference is just a few seconds. An outsider can't see the problem at all, and even if you see it, they can brush you off with one sentence. Remember not to blindly pursue speed and ignore quality. The necessary processes cannot be omitted, otherwise you will pay ten times the cost to make up for mistakes later. For developers, the worst case is just changing jobs, but your hard-earned money will be wasted. 7. How to handle system accidents and responsibilities? Our traditional industry is not as high-end as BAT internet companies, which attract top talents. We usually hire intermediate programmers and cultivate them. Since it's cultivation, they need training, and during training, they inevitably make many mistakes. Although most mistakes can be found during inspection and testing, there are still many problems that cannot be tested internally and can only be discovered in a real environment. For example: 1. Customers place orders but the warehouse doesn't freeze inventory, leading to overselling; 2. Warehouse locks inventory, causing goods to be unsold; 3. Customers pay online successfully but the bank delays returning instructions, causing transaction failure; 4. Different phone brands, models, and system versions cause different problems. We cannot buy all phones on the market to test, nor can we hire so many professional testers. Even big companies like Apple and Microsoft have endless system issues. When a system vulnerability occurs, who bears the loss? The root cause may not be one person's responsibility but the result of multiple parties working together. If you make the programmer pay for it by deducting from their salary, they may feel wronged and leave. Then they can get a 30% salary increase at the next company. Would you be willing to let them go? If they leave, you have to recruit and train a new person to familiarize with business processes. Can you guarantee the new person won't make mistakes? In the end, you can only comfort and encourage, like treating your own child, saying, 'It's okay, every mistake is a growth. Don't make the same mistake next time. Be more careful in the future.' The final responsibility can only be borne by the company. 8. How to solve programmers' sense of belonging and achievement? In domestic enterprises, business-oriented companies rarely take technology seriously, thinking all credit goes to the business department, and the technical department is just a supporting tool. Once something goes wrong, they blame the technical department for not being effective, because the technical department delayed the business department's work and performance. Technical people are not good at talking and don't like to flatter the boss. They are practical and straightforward. So technical personnel find it hard to achieve success in business-oriented companies, and bosses find it hard to understand their difficulties, even thinking they can replace people anytime with money. They don't consider career planning or learning growth space for technical personnel. Where is the sense of belonging? In contrast, a technology-oriented company places technology at the core, naturally understanding and empathizing with their feelings, providing career planning and learning opportunities. When facing difficulties, we face them together; when achieving victory, we celebrate together. Technical personnel receive full attention and space to develop, naturally gaining a sense of belonging and achievement. Summary: Birds of a feather flock together. If you want to get him, you must first become him. 9. How to face technological iteration and innovation? With the rapid development and popularization of the internet, the speed of technological iteration and innovation is accelerating. Early development tools could last more than ten years without becoming outdated. Now technology changes significantly every three years, and in the future, it may be faster. This means the advantages of young people in the IT field are becoming more obvious. However, in our field, most technology companies are still very traditional, using development tools from twenty years ago to patch things up, even to the point where they can't recruit developers. Old technologies cannot effectively integrate with the internet. So why don't old companies with brand advantages and industry experience innovate? Several main factors: 1. They are older, with outdated and conservative thinking, always believing the internet is a bubble. 2. Technological innovation requires major changes, and most of the company's talent needs to be re-recruited and trained, which is time-consuming and costly. 3. At around 50 years old, they don't want to make too many changes. Innovation is hard to compete with young people, so they'd rather save money for a stable retirement. Summary: How can a three-story residential building support a high-rise? It can only be demolished and rebuilt. The cost of iteration is cruel. Are you ready? 10. What money do we use to pay for it? We don't compare with BAT. Let me use the technical staff of 'Zhanghe Tianxia' and 'Zhongshang Huimin' in this industry as examples. When we cooperated with Zhanghe Tianxia in 2014, they had over 100 technical staff involved in the system. In 2015, they had even more. When we cooperated with Zhongshang Huimin in early 2016, they had over 50 technical staff, and now nearly 100. Even with so many technical staff, they still need to purchase mature systems from outside for cooperation. They are big companies; are they dumber than us? If you set up a technical R&D department, can you guarantee it will be more economical? Not necessarily! For example, even if you are smarter and more capable than them, using one person for two people's work without increasing salary, you would still need at least 20 people. Even if you are amazing enough to recruit all technical staff within a month, and the team doesn't need to磨合 and doesn't consider resignations, such talent would cost at least 15,000 per month on average. So let's calculate how much it costs per year. Annual technical investment calculation: 20 people * 15,000 yuan * 12 months = 3.6 million yuan/year Our FMCG distributor industry's average net profit is around 2%, meaning we need to work hard to earn 200 million in revenue to support this technical team. This is the most conservative estimate. You have been distributors for one or two decades; do the math yourself. The difficulties and setbacks to overcome are far more than these. Here, I especially thank the enterprises that have given us support and help. It is your patient guidance that has made us walk more steadily and solidly, laying the foundation for Zhongke Shangruan's achievements and leading position in the industry today. Finally, to sum up in one sentence: Enterprises should use the way of integrating talents and resources to become bigger and stronger. Delegate professional matters to professional people, leverage everyone's strengths and values, and strong alliances are the king's way! Zhongke Shangruan has been engaged in software development in the wholesale and retail industry for ten years. The self-developed BS architecture private cloud systems include: 1. B2B Supply Chain Platform System (APP ordering system, salesperson APP field promotion system, WMS warehouse system\TMS distribution system\vehicle sales APP system\PC ordering system\online supplier system). 2. Chain ERP Management System (headquarters control center system, CRM member system, promotion management system, financial report center, product management, regional management, personnel permission management, etc.) 3. Store POS Management System (store purchase, sale, inventory, membership, settlement, mobile payment, online order management, report center, etc.). 4. O2O System (LBS-based WeChat mall system, points, coupons, promotional activities, online ordering, store delivery, etc.). For more information, please visit Zhongke Shangruan's official website: www.zksr.cn -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Distributor management | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]