Chris Reddick (president, CEO, and co-founder of Clarity Ventures) and Ron Halversen (vice-president sales and marketing) continue their discussion of searching for a vendor for eCommerce platforms and integrations.  

Part 4 of a 4-part series. (Click to return to Part 3)

RON: How many of our clients, and I know the answer's well over 50%, come to us because they've had a tool that they've outgrown? Right.

CHRIS: At least 50%.

RON: If not more, right?

CHRIS: Unfortunately.

RON: They bought a tool. And I know that's a significant reason why, and I've worked with Clarity for 12 years. I became one of the partners 10 years ago, but I was a client. I was your client for two years before I joined the team.

CHRIS: That's right.

RON: And back when I met you guys and we started, I remember talking to you one time and we were having this conversation, because back then, you'd only been in business like three years. And I said, "Why'd you get into this business of building a platform and building your own eCom if you were really in a services business of just building websites?" And your answer was, really interesting. And basically you'd said something along the lines, and I'm paraphrasing here, but I remember you talked about it and said, well, when we started, we were consultants and we would sit down with a client and we would talk through all their custom scenarios and what they wanted to eight and how they wanted to run their business. And then as soon as we got that information, we would have to go see if there was some off-the-shelf product we could find to use that could be customized. And then we would do the integration from scratch and we would deliver it. And it worked really, really well. And this was the interesting part, for the initial delivery.

But then you went on to say, no business is static. Every business changed, they divested, they acquired other divisions. The companies just grew, their clientele changed. They added more products. Every single business morphed and changed. And when they would come back to you and ask for those customizations, you said, half the time you were, "No problem." And then the other half the time, it was, "Sorry that off-the-shelf product we picked a year ago can't do that. But we had to start over from scratch." And you said, that's really what led Clarity into building their own eCommerce platform, because you never wanted to not be able to be customized and grow and expand or contract or change with any business's needs.

what is hipaa

CHRIS: That's right. Yeah. That's exactly right. And it's interesting because if you look at some of the SaaS-based platforms, especially if you're looking at the benefits, the pros and cons of SaaS, it truly is one of the biggest downsides to a SaaS-based model, especially a multi-tenancy model. And this is most of the SaaS platforms that are out there today. They're going to have some limitations. Now, it doesn't necessarily mean that they can't do what you need for your first phase of your project. And that may be fine. But we encourage clients to really look further down the horizon and really understand where things are going to evolve or potentially evolve so you can project forward.

One of the big things that we recommend looking for is, can the system that you're working with currently do some of the intricate customizations? Do they have the ongoing maintenance to be able to handle some of the upgrades to your systems? Is one of the things you need to understand whenever you're working with disparate systems is you're going to need to upgrade and patch those systems from just a pure security perspective, if not the functionality enhancements, etc.

And so whenever these things change, it can break the integrations and it can change the protocols for the integrations. And this can cause a lot of challenges logistically if you don't have good ongoing maintenance. But yeah, whenever you talk about customization, it raises the hair on my arms because it truly is one of the biggest challenges that you see with Multi-tenancy SaaS systems. And like you said, that's why we started doing this. That's where we really saw a huge value to clients is being able to provide this unlimited capability. Just to be specific here, whenever we do implementations, they're typically implemented as a single-tenancy SaaS eCommerce solution, which gives basically the majority of the benefits of being SaaS-based with all of the benefits of being able to fully customize. And so I think that's a huge strength that folks need to know about and just understand the limitations.

If you do choose to go with a lower cost solution or a solution that is SaaS-based, be aware of what the limitations are going to be. And in particular, understand what it's going to take to customize the system, because that's usually about 80 to 90% of the cost that is going to exist long term is going to relate to how many customizations there are, and what kind of maintenance there is? That's really where your cost is going to grow if you're trying to fully automate your processes. It's not going to be just the cost of the tool. It'll be the cost of actually implementing your business fully and customizing to cater to your business.

RON: I agree with that. I want to talk about two things. One, I'm going to mention something and then I want you to talk about securing the data, because that's a big one. But for me, one of the things that's been very interesting, I don't know what else to call it, data manipulation, data calculation. We really haven't talked about it, but this is where I've seen so many other platforms fall down. For example, we had a client who just had an eCommerce storefront and an ERP and then they introduced Amazon into the mix. Typically, not a big deal, right? You're pushing your products up to Amazon to be sold.

The problem occurred was every two weeks—instead of in real time, every two weeks—Amazon Central would send down the sales record of the money that they were being paid. Well, the problem would happen and I'm just going to give a quick example. They would sell four items on Amazon. Those orders come down in real time. Now, in the ERP, they have four items and let's say they each sold for 25 bucks just to make it simple. Now, in their ERP, they show four items. They fulfill it, they ship it, they're gone. Now, one of the people, whether they're being dishonest or not, they return that item. Well, they don't return it to them. They return it to Amazon. They request a refund on Amazon. Now on the 15th, when their sales record comes down, our integration is trying to reconcile the dollars that are finally paid from Amazon with their ERP fulfillment. But the payment from Amazon comes down and said only three units are sold at 25 bucks a piece. And there is no one-to-one line matching it's out sync. One of the things we had to do for this client is if the items that came down from Amazon, at the Connect level, we would sync. And if they were a one-to-one match, we would tag the item in the ERP sold.

If they didn't match, we actually built them administrative interface that they could log into a web interface and they could see everything that did not match. So they could go through and reconcile and say, well, which three ended up being paid and which one was the one that was returned? Because that information didn't come down from the sales record, they'd actually have to go figure out which one initiated a return. And then in that interface, they could go through and tag which one of the records is actually been paid, which one was returned. We had to do some additional data manipulation. And I've seen where people have had us turn Clarity Connect's database into a data warehouse where data from both sides of the integration were stored there and then have us throw a Power BI or one of our reporting solutions on there.

I've seen some really interesting things with data manipulation. Even pulling a sales order in, we go out and check to make sure it's a viable shipping address. If not, edit the address in line before we pump that address into the ERP for or fulfillment, things like that. Data manipulation and calculation can definitely be something you're going to want to know. But I'd love for you to go into securing the data and some of the different protocols and compliancy issues that we deal with that we address with our integration platform.

CHRIS: Absolutely. And yeah, what a great point on the data manipulation side of things and automating that where possible. It can be huge to be able to scale. And just along those same lines, being able to customize for specific security requirements. There are so many security requirements nowadays, mostly because there are a lot of breaches, unfortunately, that occur. it's expensive for the end users that have real issues because their data was breached and taken advantage of. In addition, it can be really expensive for the organization to be able to try to resolve that or patch up their credibility and maybe even impossible to do. And so it's very, very serious overall. And so yeah, ultimately, whenever we're doing an integration, especially if it's incorporating very sensitive data, then we want to work with your team to understand what the data is that is sensitive and help your team understand certain requirements if you don't.

We're not lawyers here, but we do have a lot of experience working with HIPAA compliant websites,or NIST, CMMC, GDPR, PCI DSS and other different compliance needs. And so we can really help get you started going in the right direction. We work with a lot of partners who basically will do audits of your internal systems and work with your internal team to make sure your entire process is HIPAA compliant, for example. And then as part of that HIPAA compliance, also audit and work with our systems to make sure that they're constantly patched and kept compliant. And so anyway, the point is that whenever we're implementing our connector, we're looking to bring to bear some knowledge and experience that we've had in your respective areas of security needs.

And in particular, we're happy to bring partnerships that we've had a lot of success with, into the relationship to help expand your capability there and make sure that things run seamlessly for your organization. And then specific to our connector, from a technical perspective, we have the ability to do some really interesting things. And I'll just give a few examples here, Ron. But just for the HIPAA scenario, as an example, we do have the ability to persist data for caching and performance purposes. And as you can imagine with HIPAA, that can be a really major concern. If data is cashed and persistent, most clients choose not to persist data that is secure. Maybe it's PHI data, for example. But ultimately, if there's a need to persist data, we can encrypt it at REST. We can allow the system to enable robust logging for HIPAA compliance.

We can enable a very specific key vault system so that all of the data that's encrypted is only decryptable on an individual account level or customer level, for example, or key record level for the data so that every single record has a unique encryption within the already encrypted system. And then we can further encrypt that by tokenizing the data and storing the secure data in another vault that only shares with us a unique identifier, that we then have to log in to be able to get the secure data out of the vault. And without boring you with all the details, the point is that the system that you're working with, it really ought to be able to handle very specific needs for security purposes. Mostly, making sure that the entire system is sanitized of any secure data. Whenever these integrations are running, you don't want to leave data in your connector and your integration platform, that could get compromised. Most of the time, the big requirement here, Ron, is just to make sure that it doesn't stay around after the job completes. But in some cases, if it does need to be persisted, it needs to be persisted securely.

what is hipaa

CHRIS: Again, we recommend working with partners that we can bring to bear and work with you on to identify the best solution. But partners who can help you with an automated reach and automated patching and compliance requirements tool so that you can employ that. And then possibly depending on the complexity of the compliance needs, an actual compliance team that can help you with your whole enterprise implementation of compliance, not just on the technical level.

RON: That may sense, especially, I mean, our largest vertical that we deal with in the 10 years I've been here is medical. We do a lot with medical and it always seems like HIPAA compliance and some of the other compliancy is really important. But even then, with doing some of our eCommerce in overseas, dealing with NIST and WCAG, and now the real big push on ADA, and all this kind of stuff, it just seems like compliancy and protecting your business seems to be one of the most important things, almost as important or more important than the technology you select itself. While you're out looking for a technology, make sure you look for a vendor, a partner who actually has experience in these areas and can help you to ensure that the business is protected. And don't give you just a great deal to throw a technical solution in and potentially expose you legally.

In selecting a vendor, one of the other things, too, that people ask me when I talk to him about these deals is the cost. How much are the cost of these things? And it's interesting. Our model, I feel is definitely different than many. I see so many when I was talking to a couple people last week and they said, and they called it a tool, "The tool that we're using charges us every time it makes it a query." And I said, "What do you mean?" And they said, "Well, because it's a SaaS-based solution, every single time it makes a call to the other platform to move data, it charges us for a call. It charges us for every record that is collected. So as our business grows, the cost of this solution just goes up and up and up."

But they're not even persisting the data in the middle, they're just literally transferring data, but they're charging them per query, per record transferred. And then they're charging them an annual maintenance fee. Their solution is literally going up and up and up, even when no work is being performed whatsoever. It's almost like you pay the 500 grand, you move into the house. And even if they don't do anything with the house, just because they have to come and mow the lawn, they're going to charge you more than what the house costs over time. Is just crazy when I see these costs. One of the things that we did, as ownership here at the company, we decided to come up with a model where it's like a set of Legos. I can build anything I want with the Legos, but I got to buy the set of Legos first. Once I own the Legos, I can go in and build anything and I can rebuild.

And that's one of the things that we've done with our base license with our platform is we've got, we call it the one time cost. It's a CapEx. You can pay for the platform. You can pay for the connectors that you need. And then we'll come in and hold your hand at whatever level you want, get the full integration done and then walk away. And convert ourselves from maybe the construction crew to maybe like a handyman. Whereas if you don't need our help, I've seen people on our eCommerce platform that we've done in integrations were seven years ago that have never talked to us, and then all of a sudden out of the blue they'll call and say, "Hey, we've upgraded from Sage 100 to Sage X3. Can you come in and swap out that connector for us and fix our new connection into our new ERP." Absolutely. And we'll go in there and do that work form.

As far as a cost perspective, I certainly think it's a no-brainer. But again, I'm a little biased. All I want to do is just make sure you uncover all the fees. I've seen way too many transactional fees included with some of these other platforms. So just make sure to uncover all that before you go. But from a technical perspective, and I know you've talked briefly about some of the benefit, especially around HIPAA and having that experience, from a technical perspective, Chris, why would someone choose Clarity to work with as their vendor and/or platform?

CHRIS: Yeah, that's a great question. Thanks, Ron. And I would say to be non-technical for a moment, I know this is going to be shocking, but it's really to reduce your headaches. And if you want to make sure that your project is successful no matter what and reduce your headaches, Clarity is the right vendor for you. And basically, if you don't choose Clarity or you don't work with us, keep in mind that you're going to need a team at some level, that's going to be able to deal with all of the different integration endpoints and be able to make those accessible and work with them and securely. Make sure that they're working in a sandbox environment and then be able to convert to production, deal with performance and scaling. And like you said, Ron, a lot of the different compliance needs, HIPAA compliance being one example.

And, and then the other thing is, having the ability to customize and adapt. And again, from a technical perspective, this is just removing the headaches. The business side to be able to say, we need these things to do this workflow in this way. And we bring a team of business analysts and technical specialists into the discovery process so that whenever you're initially explaining everything, we memorialize it, document it and build out a really specific plan for your business. And then we execute against that and we don't really have any limitations. And any limitations that would exist are typically going to be related to these external systems that we're integrating. And we've continued to build capability over time so that if those systems do have limitations, we can let you know during discovery. We can advise you on how to work around those and how to bypass some of these challenges that we've seen over the years with these different integrations that we've done. Like you said earlier, 1000s and 1000s of these different integration workflows.

We certainly hope that that was helpful just to give you some that background on just overall what to look for in a vendor. And generally speaking, how to reduce your headaches and really enable your business to get the results that you're looking for. And with that, Ron, I just want to say thank you for all of the detail and thanks to our viewers for taking a look at this webinar today. Any closing thoughts that you have, Ron, for folks that are watching?

RON: No. Thank you. We really appreciate your time. Would love to help you guys talk about your integration projects and give you some guidance. And thanks, Chris.

CHRIS: Thank you, Ron. Bye, for now.

RON: Bye, for now.

 

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