It does make sense, however it is important to retain at least some of the IT folks who understand the legacy systems so that the transition is smooth. It is good to hear that that many of the Meijer IT folks have been hired by the cloud firm. It does make sense to have the retailer turn their attention to other, more critical areas, but if the transition to the outside services are chaotic, then valuable time and resources are wasted. I agree with Tom Dougherty, let the experts in cloud or application development do what they do best. Whenever we get pushback that something like what we offer is being handled by IT, the result almost always comes up short, and they end up coming back to us after a year or two of poor results and a lot of time and money spent. Let me be clear, IT plays an incredibly important role, some of which cannot be outsourced, but there are areas that can and should be. Cloud and application development are… Read more »

We have been espousing outsourcing, SaaS applications and cloud computing since long before it because a daily topic of conversation. Any IT function that is not either intellectual property or one which represents a unique competitive advantage should be outsourced. It makes sense for Meijer as for any other company. The functions that should stay in-house are the technical support that often requires that a person walk to the office of the customer to install something or fix something that is broken. In some cases, the development of truly unique software applications that provide a true differentiation factor, and the IT knowledge of the business that will be the liaison to the outside world, should remain in-house.

The transformation of retail also has a direct impact on IT organizations. Outsourcing the IT-related operational processes makes complete sense, and will provide short-term economic relief. There is a clear differentiation between supporting technology and infrastructure.

However by all means the business-facing technology systems, which support the customer facing solutions, absolutely should remain in-house. These include all of the solutions and systems which support the merchandising, store operations, design, e-commerce, digital, mobile, social, teams. This paradigm shift from the traditional IT support model, to one that is focused on the business side was well captured by Forrester’s CEO, George Colony back in 2007. Technology is now your business, and business is your technology.

The leaders within the business technology departments should work in complete partnership with the business retail leaders and do what is necessary to keep, retain and acquire new customers.

This move to the cloud is a no-brainer for retailers. Let experts manage your IT needs, storage and access, and SAAS. Then cut the IT department to 1 or 2 people who gather competitive bids to evaluate vendors who can best supply these products and services. This is what Meijer is doing, and probably saving on space, money, and HR needs. Retailers should focus on what they know best — retail.

Leveraging cloud computing and IT outsourcing makes a lot of sense for many retailers. IT is not a core competency or differentiator for most retailers — it is just a necessity. A cloud approach enables retailers to significantly reduce infrastructure, improve security and increase operational effectiveness by centralizing management of data and processes. Retailers are embracing this move to centralized data as they realize that it is key to accelerating their path to a single version of the truth with a centralized unified commerce platform that is integrated, scalable and flexible to support evolving business needs. Given the move to the cloud and a growing preference by retailers for utility-based, as-a-service solutions, we see the next step in this evolution as “IT-as-a-Service.” This is a real opportunity for retailers with a one-stop-service for all their IT needs — hardware, infrastructure, applications, implementation and maintenance services. This bundled, all-inclusive approach can simplify retailers’ operations and give them the agility and flexibility to quickly transform their business — much faster than they could do with legacy decentralized… Read more »

The digital transformation path for retailers is paved with outsourcing! Retailers need to innovate and spend their technology budget on projects that will differentiate their brand and their store experience for the customer. For many retailers this has to lead to reduced spending on “traditional IT” where they are just “keeping the lights on.” Outsourcing these IT functions so that the retailer’s IT can focus on innovating may be the fastest path to revitalizing their store experience. Especially for more routine/mundane functions that are maintenance-centric vs unique operations. Outsource your break/fix activities so you can focus on being creative and seamlessly integrating new technology that delivers value to your customer.