Like other industries, retail CIOs had to move fast to facilitate remote workspaces. But unlike other industries, retail also had to launch new business models linking physical and digital channels to support new buyer journeys overnight. For many, that meant quickly implementing applications and services into an already complex and resource constrained IT landscape. Some retailers couldn’t turn the corner with demand. However, others, like Super Retail Group, managed a 176% jump in online sales in the early days of the pandemic by implementing contactless click and collect in just 10 days. And with a 50%+ jump in dog and cat food sales, pet care retailer, Petco, had to fight off competition from all-digital competitors and traditional grocery stores. In addition to aligning space, services, and safety for brick-and-mortar shoppers, it also had to enhance options, support, and experience for digital users.
Retailers that succeeded during this time, were those that found the right balance between optimizing existing technology investments and accelerating work that was already in progress.
How Are We Going to Continue to Pay for It?
The dust is starting to settle, and retail CIOs are now left with a zoo of applications that need care and feeding. In the new normal, retailers need to maintain all the channels that consumers embraced during the crisis in a post-COVID-19 marketplace. New channels, like BOPIS (Buy Online, Pickup in Store), saw a 40% jump in usage during 2020 and shoppers aren’t likely to go back to their purchasing behaviors pre-pandemic. The changing tastes of consumers will require AI, ML, and IoT, which requires adopting cloud, modernizing data and apps, and transforming IT delivery models.
To find those opportunities in your organization, here are three key strategies to follow:
Improve IT Agility:
Keeping up with market shifts means eliminating obstacles to agility. Core ERP systems, like Oracle and SAP, are heavily leveraged in retail. However, the cost and time dedicated to supporting these mature, stable systems often eats away at budget and resources better spent on implementing new technologies that drive competitive advantage and growth.
In an April 2021 research report, analyst firm Valoir confirmed that businesses using Rimini Street, an independent, third-party support provider for SAP and Oracle saved an average of 75% on total ERP maintenance costs compared to vendor support. Aside from savings to reinvest in strategic projects, clients also reported avoiding or delaying unnecessary and expensive upgrades/migrations and access to customization support and tailored fixes and updates as key factors in freeing up resources to increase IT agility and service delivery.
Enforce Strict Governance
More remote employees and new business models spurred by COVID-19 created a zoo of communications and e-commerce technologies. Many were implemented outside of established governance frameworks posing security and compliance risks. Retail CIOs now need to focus on eliminating risk and protecting data with strict governance and robust security.
With thousands of pandemic-related tax, legal, and regulatory (TL&R) updates, CIOs also need to find ways to stay ahead of fast changing regulations with tight windows without further burdening resources. Audit and rationalize your entire IT ecosystem to ensure all elements comply with your governance standards, TL&R changes, and your long-term IT strategy. Seek out alternatives to high cost software vendors that often bundle essential TL&R update into new releases or enhancements that may not be needed.
Prioritize Budget Optimization
Retail CFOs ranked revenue-generating technology initiatives as the top priority of their CIOs, but success requires investment. This leaves the million-dollar boardroom question, “How are we going to pay for it?” To accomplish all of this, retail CIOs will need to make budget tradeoffs that reallocate capital, reduce operational drag, and drive digital growth. For many, that means pragmatic budget optimization to find opportunities to cut waste and fund business priorities.
Retail CIOs need to undertake cost optimization as a continuous business discipline to deliver more value with less budget. Prioritize projects and put spending under the microscope. If it isn’t moving the needle, don’t allocate funds to it. ERP and other software vendor fees can be notorious for draining budgets without delivering fair value.
Avoid expensive upgrades unless there is a defined, business-driven use case, not because of vendor pressure or financially engineered deals. Beware of minimal savings now in exchange for long-term contracts that could hinder your roadmap. A unified services approach to run, manage and support their ERP environments can simplify operations and extend the lifespan and value of existing systems.
Using the funds and resources liberated with these strategies, retail CIOs can create agile, resilient and responsive IT organizations able to respond to a changing landscape, reconnect with in-store customers, and deepen online relationships. The new normal is replacing a crisis, retail CIOs who can do more with less will further cement their place at the leadership table.