A new study from RSR Research finds that retail IT is not involved in retailers' efforts to keep up with consumers' demands for the latest in social or mobile innovations. And to some degree, it's the marketing department's fault.
Indeed, the study found line of business departments led by marketing are working around IT to bring these consumer-facing technologies to market. Unfortunately, failure to align IT with corporate strategy in its early stages tends to create the self-fulfilling prophecy of IT being too slow to respond when its expertise is most needed later on.
"The problem is not that business users don't understand what's happening in IT's backyard, it's that they simply can't wait," the authors state in the report, Pandora's Box? The Impact of New Technologies on Retail IT.
"Business conditions and cycles have sped up dramatically, the consumer is stunningly technologically savvy, and business departments, most especially marketing, must respond."
In many ways, it's a case of déjà vu.
During the late 90's, IT was busy setting up bunkers to prevent a Y2K catastrophe and websites came to be managed by marketing departments to capitalize on the internet boom. The early, simplistic, "eye candy" websites eventually roped in IT when adding e-commerce functionality landed way over marketing's head, the study states.
Today, business users are once again largely forgoing IT to catch up with the world of Facebook/Twitter, mobile shopping, and augmented reality applications. Outside agencies are being used to design and enhance the new applications while marketing interns are hired to inspect and review tweets and Facebook posts, the study finds.
But the technical complexities promise to become more challenging as some retailers are already starting to sell directly on Facebook. The authors state, "Clearly by the end of 2010 consumer expectation of full data and order integration across any and all selling channels has put the data 'problem' squarely in the hands of IT, where it shall forever remain."
Moreover, an accompanying survey of retailers shows that the fact that business users can make decisions around these new technologies without IT's help ranks as the perceived greatest organizational business inhibitor to IT's effectiveness and responsiveness. (More than 80 percent of respondents came from IT departments.) The second biggest inhibitor was seen as perceived user intransience to change their own processes to support new capabilities that have been brought in house.
The IT-biased respondents did admit to their own department problems. Asked to list the top three "technical" inhibitors to becoming faster and better, coming in third was an IT development methodology that is "rigid and takes too long," particularly given the rapid pace of change in the marketplace.
Overall, RSR's top recommendation for retailers is to establish a strong IT governance model. RSR wrote in the report, "Keeping track of outstanding projects and discriminating between wish lists items and nice-to-have from need-to-haves is virtually impossible without true IT business governace."
Discussion Questions: How, if at all, do you see retail organizational roles changing with the arrival of more technologically-driven shopping options? Does marketing have to cede some clout to IT in order for retailers to fully capitalize on the emerging social and mobile technologies? What primarily hurdles do to see affecting change?