Custom Build or Off-the-shelf Software – What is the future of Technology / IT in Retail

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The fifth in our series of blogs on what keeps retail CIOs awake at night focuses on the big question of ’out of the box’ or customisation.

The classic question for an Retail IT Director a generation ago was whether to buy or build a retail software solutions. Traditional IT departments were structured typically with large development teams who were quite capable of developing large scale applications as well as modifications to existing systems.

To build was genuinely a viable alternative, as often the alternative of buying a IT solutions for retail was fraught with pitfalls, cost and the result could lack the required functionality.

Moving forward to the present and the recent history of apps, out-sourcing, agile methodology, off-shoring and near-shoring and the question has changed more into whether it is better to deploy a ready built solution in ‘vanilla’ flavor, i.e. as it comes out of the box. Or whether it is preferable to take the application in standard form and customise it to meet the particular needs of our business.

 You may like this also  – How Retail CIO’s will Face up to the Demands of Omni-channel Retailing

This debate indeed can be the cause of many sleepless nights. On the one hand to take on customisations is not something that should be done lightly as the cost of developing them is only the tip of the iceberg. The total cost of ownership across the lifetime of the application will be significantly higher (10x) than the original development cost.

On the other hand, to stick to a standard process could mean that we fail to support the very essence of what makes our business unique and special, doesn’t it?

As ever the CIO needs the “wisdom of Solomon” to be able to plot a course through this potential minefield, and broker a deal which suits all stakeholders and fits the budget.

A balancing act as ever is required. The CIO must judge the situation and the characters involved and be nimble on his or her feet to extract the best possible business result. For example, rarely would it be wise to simply ask a set of business users “what do you want?” as the resulting blue sky discussion will probably work against any expectation management that is likely to be required.

Recommended Video – David Callow, former CIO at Debenhams, shares his views on Retail Technology Outsourcing

The option of influencing the package provider to include additional functionality in the core product may seem unrealistic, and at best, a lengthy process. However, the move towards incremental updates and cloud platforms makes this more feasible. For example, the new version of Microsoft’s Dynamics AX ERP product offers the possibility of implementing updates on the continuous basis. We may never take a mission critical, corporate platform update in the way that we update an app on our phones today, but the processes of updating these are converging!

The cliché of ‘phase 2’ being shorthand for ‘the stuff that will never get done’ must be challenged, and the CIO and team must actively demonstrate a willingness to provide releases regularly and often, albeit small, incremental releases. This culture of rapid change and active listening to stakeholders will engender a spirit of trust and help to reduce the unrealistic project demands and consequently reduce the need for customisation.

It is likely that some “tough love” will be required to achieve the ultimate aims of timescale, budget and functionality but an open approach with genuinely transformational leadership can get all parties pulling together in the same direction.
The very essence of good solution design is to find the compromise position between the two extremes, but with the right leadership example it is possible to strike the right balance.

Written by David Callow & Martin Schofield

David’s early career was with Argos and then The Burton Group. He worked in a variety of technical roles before becoming Business Systems Controller at Debenhams in 1998. He has held senior IT roles at Debenhams including operating at CIO level. David has extensive experience in multi-channel, ecommerce and stores systems as well as back of house implementations in Data Warehousing, HR and Finance. In early 2015 David co-founded Retail 247 Consulting where he continues to exercise his problem solving skills.

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David Callow

Martin's early career covered a variety of IT roles at The Burton Group and Debenhams. He then spent four years at Burberry managing IT for the UK and European retail operations before moving on to Harvey Nichols in 2003 as Head of IT. At Harvey Nichols he was promoted to the main Board with responsibility for IT, Logistics and Retail. Martin has also worked for software organisations (Itim and NCR) before co-founding Retail247 in early 2015. Involved in many large scale and customer focused projects Martin brings a real world thinking, pragmatic approach to innovation and strategy.

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Martin Schofield

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