More, online businesses are finding ways to centralize their digital infrastructure as the benefits become clearer. As more companies go digital, managing the different tech capabilities important for daily business can get clumsy. However, as valuable as the technology is, a poorly designed digital infrastructure can pose significant drawbacks. To benefit from the efficiency of an effective digital infrastructure, the services of a digital agency is vital. Digital agencies look more broadly at the entire digital framework underpinning business whereas system integrators focus on a specific functions.

The ideal scenario for managers is to have all digital capabilities managed in a centralized manner, preferably under one system. At the least, an agile digital network of smart technology that effectively complement each other. Many companies find themselves with ERP, CRM, eCommerce and other capabilities operating out of sync with each other. Unfortunately, this can undermine some of the efficiency value of a firm’s entire digital infrastructure.

 Centralized inventory 

Centralized inventory is arguably the biggest win eCommerce stores bring to businesses. It ensures that businesses can manage all products in one location. This streamlines the process as goods produced or manufactured are directed to the same place and transported out from there. This eases the estimates of the shipping rate and shipping speed. When shipping everything from the same place, it allows operations to be optimized faster. The advantage, is better lead time, transit day and rating data. This enables better accuracy in customer pricing. On the other hand, there are problems with only a single location. The main downside, however, is that with just one location, business can have slower shipping speeds to many customers. 

Cost and customer service

Firstly, centralized warehousing require merchants to pay the associated cost for one location. This includes, utilities, rent, wages, and others, Centralization allows for a consolidation of these costs in a single location. This has the added benefit of making the operation cost effective. In turn this increases profit margins on high value products, making it ideal for many merchants.

However, it might have varying effects on customer service. A centralized customer service location limits a businesses flexibility and adaptability. While companies benefit from centralization with data they lose the ability to ship quickly items that are out of the region. With a centralized inventory, a company is in a sense putting all the the resources in one place. That comes with the associated disadvantages. Not just in inventory.

In conclusion, proper consulting and key third party integrations is important to get the benefits of a centralized digital infrastructure. As observed a centralized eCommerce operation has its positives and has some significant drawbacks. It’s up to digital agencies like DigiCommerce to help businesses integrate an eCommerce store in a way that maximizing the substantial advantage of a centralized system. Moreover, while doing this they must mitigate the associated problem. DigiCommerce often delivers this for clients with a mix of effective customization and deploying relevant third party applications. However, it is vital to centralize some aspects of eCommerce or digital infrastructure but as we can see, it has its limits for many businesses.