Retailers are racing to offer shoppers technologies like facial recognition, holographic stores installations, mobile payments and alternative currencies. Shoppers have become conditioned to demand the latest and greatest from retailers. And if that isn’t enough, all brand interactions are now expected to provide customers with the “shop anywhere, anytime” experience that they demand.
While our industry buzzes with discussions about these popular new trends and technologies, one of the biggest issues faced by today’s retailers has become a topic that we seldom discuss: software integration of an end-to-end enterprise resource planning systems. This may not be as scintillating a topic as in-store facial recognition technology, but when managed strategically, a fully integrated software stack inevitably saves time and money. There are few corporations that wouldn’t stop to consider how.
Faced with growing competition and tighter profit margins, retailers that require software automation in specific business areas will often opt to solve one particular problem (and disregard related issues) in an effort to save money. Take a brand that has historically suffered from inefficient allocation. Software designed for that specific problem would certainly be an appealing option for that company. But while it may incur less initial costs, it actually costs more in the long haul. Retailers often fail to recognize that in their efforts to save money, investing in a stack of different software leads to unexpected operational inefficiencies that are ultimately costing them money, not saving it!
On average, we estimate that organizations working with multiple software vendors experience 40% redundant costs – costs that could be easily eliminated with a single-supplier platform.
We often see retailers that are running their business on six or seven different platforms – one for every aspect of their operations. Individually, these applications function as they should to collect data into their native environments. However, information is useless if it’s not shared across the organization. In order to get a clear vision into their operations, retailers need cross-system communication. Unfortunately, problems are inevitable when trying to share data across platforms. Robust integration points must be set up to bridge one application to the next. Not only is this a costly undertaking, but it must be maintained every time applications require upgrades.
Another common frustration when dealing with multiple software vendors is a decentralized pool of resources. When a company has multiple systems managed by various vendors, they inevitably run into an overlap of services. Retailers are then faced with a situation where they’re paying for the same services multiple times. Another unfortunate consequence that we see with this business configuration is finger-pointing. In a decentralized IT setup, it becomes very easy during software malfunctions for vendors to push the blame onto one another, aggravating a matter that would otherwise be corrected by a centralized team.
Scalability during business expansion becomes a tremendous challenge as well. Retailers that have consolidated software infrastructure run into fewer hurdles because they aren’t struggling to scale various interfaces simultaneously. Ultimately, a partner that can propose a unified platform will offer better communication, collaboration, business intelligence and reporting.
This is not to say that area-specific software doesn’t bring value to the table. For long-term and broad-scope business strategies, though, there is tremendous value in system consolidation, especially when a company is in full expansion or managing a multi-brand or multi-sales channel business.
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