The author talks about the benefits to a retail business of outsourcing IT functions to specialists
Todays retail IT Director is far more than a techie, on hand to deal with the black arts of till and website malfunction. Instead, they are arguably the companys most diligent multi-tasker, forced to focus on their organisations core competencies, their consumers wants and needs and, most importantly, what will entice these customers to keep coming back for more.
Relieving the IT department of tasks which are not its areas of specialism through outsourcing to a trusted partner not only relieves retail IT Directors of non-essential duties but also provides time to focus on developments which might otherwise have been neglected, such as multi-channel and m-commerce, serving the all-important consumers of the future.
When retailers measure the tactical benefits of using an outsourced IT partner, they should not ignore the value that comes from being able to release their IT Director to focus on growing the business. For an IT Director, outsourcing IT can be life-changing. It releases him or her from the daily management of services to guiding just a few key individuals within an outsourcing partnership. IT Directors should look upon this as the chance to improve their credibility as a business enabler and adopt a new field of vision-that of refining and differentiating the business through systems, services and innovations that both reflect and drive the mechanics of 21st century retail.
IT outsourcing can help fashion a role for the IT director that is more dynamic, more vibrant, where operations are managed effectively by a third-party and allow senior individuals to think of the bigger picture, be creative and more strategic. Where this is already being done successfully, organisations are a marked increase in sales and margin as IT moves from being a support structure to a business driver.
The new retail world is characterised by consumer pull rather than supplier push, and retailers have come to view themselves as service providers, responding to needs rather than necessarily creating them. To get ahead, retailers need to concentrate on the essentials: what they want to sell, to whom and how, and be ruthless in their focus on what sets them apart.
In that context, the mechanics of retail - supply chain and fulfilment, merchandising and delivery - are more important than they have ever been. IT processes are the engine that powers these mechanics. Consumers are becoming more discerning in their purchasing, expecting faultless and consistent delivery and being unforgiving if they are let down. Retailers must respond by creating a service-based culture which resonates with the demands made upon them. And, as more is asked of retailers, so they should ask more of their IT function.
Many retailers already employ outsourced partners (OPs) to manage key functions such as a Help Desk for store-based and office-based staff, a Data Centre environment where hardware and systems are hosted by a third-party, the development of new and updated applications, and project management of new IT infrastructures and systems. However, as a means to control costs, streamline operations and improve their service delivery in a demanding trading climate, more and more retailers will turn to IT outsourcing.
If an OP is chosen carefully, true understanding and hands-on experience of retail can also be provided. So, why dedicate costly in-house resources to these areas when an expert can offer a better service more consistently by having focussed and skilled resources, and more cost-effectively by sharing the service across a number of retailers?
There is much to be said for approaching use of an OP as a means of shortcutting the lengthy and complex process of gaining ISO20000 compliance and adhering to the ITIL framework for technical development. ISO and ITIL are the first internationally recognised standards for IT service management. Whilst critical for IT providers, these accreditations are equally valuable to in-house IT departments in retail businesses that support internal staff and external customers, as a route to building best practice into the systems that drive the business.
The process of acquiring ISO/ITIL accreditation is demanding and wide-ranging. It will commonly take an organisation many years to construct and consistently adhere to the necessary processes business-wide.
Rather than impose the task of achieving adherence upon an internal department, it may be better to use an OP that has already climbed Everest and gained ISO 20000 accreditation.
By demonstrating that they operate to the ITIL framework both within their own business and in their client work, an accredited OP can introduce huge gains in project development timescales and quality. The ISO20000 approach of plan, do, check, act also helps organisations to learn from their successes as well as from their failures. The result will be services that better meet the requirements of the business and its customers, and at a lower cost.
In the retail race, there is no finishing line. Continuous improvement will be demanded of all retailers as they strive to keep pace with the demands of canny consumers and the rigours of a testing economy. Retailers would be well served by putting the best skills to use in the best way within their businesses. Outsourcing of core services to an ISO/ITIL-accredited partner and releasing ITs main champion to shape the companys future are a couple of the hidden benefits of outsourcing IT.
The author is Director- Managed Services at Retail Assist, retail-only solutions and services provider.