DISCUSSION
Build vs. buy: Is that still a question in retail IT?
Written by RetailWire Staff
Photo: @kirsty via Twenty20
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
A lot of old-school thinking still pervades retail management when it comes to information technology as the “build versus buy” argument continues inside many retail headquarters.
On the "buy" argument side, most retail shops are working with application portfolios that are rigid, out-of-date and expensive to maintain. IT backlogs continue to grow and companies struggle to find budgets to devote more spending to value-adding capabilities rather than maintenance.
When it comes to implementing new applications, pushing past a “not invented here” mindset is critical to taking advantage of the latest state-of-the-art solutions.
Many (if not most) core retail business processes are found in every company. Retailers get no credit for managing them well, but they do lose points for managing them poorly. Decision makers should ask themselves, “Which business processes create truly differentiating value that consumers will benefit from and give us credit for?”
The good news is that today’s commercial solutions generally work; unlike the last generation (which were really frameworks more than complete solutions), modern applications are functionally rich and agile enough to be able to conform to retailers’ internal business processes.
But while commercial (and increasingly cloud-based) solutions can accelerate modernization of a company’s IT capabilities, don’t be fooled by promises of an “IT-less” future.
Some commercial solutions are built to easily integrate with legacy portfolios, but companies must address business process re-engineering needs. Eliminating process bottlenecks, reducing cycle times, automating exception handling and other streamlining goals should be a focus for IT teams when choosing a solution.
Proprietary solutions still play an important role. Retailers need to commit to use precious IT development resources for things that help the company deliver truly differentiated value to consumers.
Finally, it’s important to remember that Rome wasn’t built in a day. Many retailers have a significant backlog of work to do to bring their IT portfolios and the processes they support up to date. They should expect to live in “dual mode” for years to come.