Retailers take on massive legacy system challenges one module at a time
There’s a sea change underway in how retailers are thinking about technology solutions. Increasingly, in meetings with even the larger retailers, I hear from executives who are no longer interested in major system replacements. Instead, they’re looking at smaller point solutions to drive change within their businesses. Of course, the choice between best of breed and enterprise systems is not a new question. What is new, though, is a trend toward implementing in parts rather than as a whole, even within best of breed solutions.
Retailers today are highly focused on fast return, and this is most easily accomplished by reducing the scope of the problem at hand. Enterprise resource planning (ERP) implementations present an immense strategic challenge because they touch almost every part of a business. For a successful implementation, a large number of internal stakeholders must buy into the project’s vision, then agree to move in the same direction at the same pace. It’s not hard to understand why ERP projects can be difficult to execute.
A focused project, rolled out in phases, can still affect many departments and stakeholders. However, these projects are far easier to strategize and implement. Companies are able to drill down on an exact need and address it surgically rather than compromising on their vision across the board.
In focusing a project’s scope, retailers address their most pressing concern: the implementation timeline. A full legacy system replacement is a years-long undertaking at best, but niche solutions and projects can be implemented in a much shorter timeframe — even within months.
Closely related to implementation speed is speed to ROI. The retail environment is highly dynamic and does not lend itself to long cycles of change. Short timelines minimize disruption and quickly put optimized processes into play.
As a result, retailers are better positioned to achieve continuous improvement as their business evolves — as it inevitably will. Instead of undergoing enormous change every few decades, retailers can target immediate pain points as they arise, evolving with the industry without falling behind.
When we consider how many companies still rely on legacy systems and how difficult it is to replace such a system in one fell swoop, it’s not surprising that retailers are moving toward a new model to achieve quick return. A strategy of implementing in parts equips retailers to match the unprecedented speed of change we’re witnessing. We should all take note.
- SAP realigns to market as businesses shy away from major IT overhauls – CIO Dive
- Supply chain transformation in retail sector – Supply Chain Digital
DISCUSSION QUESTIONS: How can retailers develop technology strategies that keep pace with the rapid rate of industry change? What are the pros and cons of implementing long-term, company-wide changes vs. faster, more focused projects?