2017 CompuCom Insights Series
IT Leader Pain Points
Retail IT leaders will need to update a number of systems in order to implement Store of the Future initiatives and compete with e-commerce. Some gaps are larger than others, but retail IT leaders across five sub-segments have identified the pain points they encounter most frequently:
- Legacy storage and network servers are complicated to integrate: Installing new hardware such as inventory scanners, mobile POS systems and self-checkout capabilities is necessary to stay competitive in the retail world today. These technologies not only come with significant upfront capital expenditures, but also come with new software that oftentimes is extremely difficult to integrate to legacy storage and network servers. As new technology is implemented at a rapid rate, IT leaders must deal with the added complexity of making sure systems stay running before, after and during integration.
- Managing inventory is becoming increasingly complex: 2/3 of customers have made purchases in the past six months that have involved multiple channels. Consumers can now order items anywhere and at any time with the rise of omnichannel, creating more complexity in determining real-time inventory levels by store and throughout the distribution supply chain. In order to satisfy consumers who have come to expect this increased visibility into accurate inventory, retailers are tasked with devising and implementing stronger tracking mechanisms through the use of technology solutions.
- Increased pressure on retailers to decrease distribution costs: In order to compete with e-commerce prices and offerings, there is an increased pressure for IT leaders to deploy cost cutting mechanisms aimed at lowering the service cost of distribution. As technologies enhance and e-commerce focuses on optimizing the ”last mile of convenience”, IT leaders will continue to deal with the pressures of competing with new and changing competition that will only continue to drive smaller margins and lower prices.
- With the quick deployment of new technologies, the right resources are not always allocated to the right problems: Front-line employees are investing too much time going through the multiple layers of red tape to service in-store hardware, causing an overall reduction in sales per square foot. As technology continues to become more advanced and complex, retailers must invest in technology that has built-in streamlined servicing that will proactively reduce front-line employee interaction when a failure occurs.
- Managing a high turn-over labor force results in unnecessary costs: Having to purchase and manage hardware inventory that is only used during peak season for seasonal employee spikes has been a constant frustration for retailers. Store managers who have to deal with inventory management on-site year-round typically see leakage, theft and increases in the overall operating cost burden.
How IT Outsourcing Partners Can Help
Pairing with an outsourcing services provider can help you design the best solution to address your pain points. Outsourcers deal with many organizations who must integrate existing legacy hardware into new IT rollouts. The service provider should have a retail-specific “Center of Excellence”, time and resources to seamlessly refresh or pursue new store expansion and can develop the best strategy to prevent, protect, detect and react to cyberthreats. The vendor should know the specific pain points of the retail industry — they understand how hardware complexity, software demands, bandwidth and consumer security flow together and have seen the pressures of an omnichannel retail platform. By using an outsourcing provider you can relieve the burden of employees having to servicing hardware, allowing them to focus on areas of specialty which drive greater value for the bottom-line.
Implemented correctly, the technology trends referenced in, “Five Critical Technologies Impacting Enterprise Devices,” will deliver value for businesses; in the meantime, however, they are placing increased pressure on IT leaders to provide faster, more reliable and more secure IT solutions. For information on working with an IT services provider to unburden your organization from having to address these pain points in isolation, please read our complete Insights Series. Working with an IT services provider allows leaders to focus more time and energy on more strategic business concerns.
Increased pressure for IT leaders to decrease costs and improve the digital experience will cause major pain points in the next three to five years. It is important to be aware of these pain points so IT leaders can alleviate the associated stress and focus on value-creating activities.
Our insights are based on our 2017 CIO survey, where we interviewed top CIOs and technology executives from the Fortune 500 in 12 market segments — spanning retail to financial services — as well as our deep expertise in deploying solutions for clients over the past 30 years.