Adopting the model set by the Japanese in the automotive industry, retailers have become used to 'just in time' replenishment and supply chain. Now, realising that it cannot tool up for every eventuality, the sector is applying a 'just in time' approach to IT. We are increasingly seeing retailers buy in short-term IT resource to bridge a gap, solve a problem or apply specialist skills.
Regardless of industry, IT is rightly trumpeted as the enabler of business change. However, with its dual accountabilities, maintaining the status quo can be challenging. On a day-to-day basis, the IT function has to keep the wheels turning, ensuring all systems are functioning to optimum performance. At the same time, it must support the business's relentless drive for improvements in productivity, sales margins and customer experience.
Within retail, we make extra demands on our IT provision. Frequent M&A activity necessitates systems integration and cohabitation, and business volatility, seasonal trends and trading peaks all have to be catered for. By its very nature, our industry makes full resourcing impractical.
Life as a retail IT Director calls for a fair amount of plate-spinning. It's not possible to do everything that the business needs, all the time. There's a reluctance to let short-term projects impact mainstream processes yet no retailer can afford to lose its commercial agility and not respond to market opportunity. At the same time, the business can rarely afford to permanently resource to the level it needs to.
In the past, many of us worked in large IT teams with clear demarcation lines between development and support. Invariably, when something was asked for, the skills would be to hand. Today, with perhaps the exception of tier 1 retailers, it's more common to see a single, smaller team, but with the same or more expected of its members. Always with plenty to do and earning their crust, it makes economic sense.
The crunch comes when a major project, critical to the company, is underway. Then, one fine day, the system goes down and a third of the team has to be taken off the project to bail it out. Suddenly, you no longer have the resources to fulfil your project obligations.
At the same time, IT is becoming more complex and diverse in terms of operating environments, hardware deployed, new communications protocols and layered applications. It is neither practical nor viable to keep all these skill sets available and up to speed for one-off or periodic requirements.
Until quite recently, the response would be to turn to the contract market. But is that the best place to go? Whilst certainly able to inject resources, contracting is by definition a stop-gap measure. When contracts are completed, the individuals invariably walk away, taking with them knowledge of the project and of your business. Then, when problems occur or you want to continue the development, it's a struggle to get the same skilled people back again.
At the other end of the spectrum is the option to outsource the entire IT operation to a solutions provider who can offer access a much larger resource pool. Many retailers find this too tough a decision to take (for both the right and wrong reasons).
As an effective compromise, retailers are increasingly opting for outsourced project services. Here, a contracted partner's skills and premises can be used to cope with periods of change, deliver new developments, man help desks, run proof-of-concept exercises and even provide the space to pilot new point-of-sale systems. All of which complements in-house resources.
This scenario gives almost infinite flexibility. Retailers get to dip into a new gene pool, with required resources coming on stream with very little notice. They also benefit from longer-term relationships with a partner motivated to understand their business, who is at hand to support its ebbs and flows and can provide continuity of personnel.
Having enjoyed the flexibility and cost-effectiveness of 'just in time' IT, there is little likelihood of retailers returning to the days of employing staff to cater for all eventualities.