Strategic Sourcing: delivering in-house value from outsourced suppliers in retail.
Delivering value for money from IT and Telecoms in retail involves asking some big questions and, potentially, taking some even bigger decisions. These include the decision to outsource or stay in-house; make the best of legacy systems or invest in new features to enhance the customer experience. Peru's Principal Consultant, Ian Robinson offers some answers.
There is always a keen focus on costs for Retailers, particularly at a time when the fight to win customers is keener than ever. Our recent Retail Technology research revealed IT Directors saddled with legacy network infrastructure and inflexible contracts with a service provider that constrains their IT development and ability to leverage technology innovation.
While delivering cost savings to the business is key for any IT Director, this needs to be balanced with innovation and value. In retail, this can include legacy infrastructure upgrades to support new apps, offering free Wi-Fi and improving customer insight.
But, simply changing legacy IT and networking technology on a like-for-like basis may not always deliver an effective return on investment. There is a need to looking beyond technology itself and assess the impact on enhanced customer experience, greater retention, or improved business processes in order to fully-assess cost reducution over the medium term.
One critical area of debate is improving connectivity. In particular introducing a robust, scalable network to deliver an improved in-store and multi-channel experience by combining Wi-Fi and compelling mobile apps to engage customers in a more fulfilling retail experience.
While the perception, of around a third of those IT Directors surveyed, is that the cost of upgrading to fast fibre services is prohibitive, the facts based on current Telecoms supply may tell a difference story.
Peru's solution to many of the retail IT questions is Strategic Sourcing: a systematic, fact‐based approach for optimising an organisation's supply base and improving the overall value proposition.
Strategic Sourcing extends a long way beyond supplier price negotiation and can even use a specific supplier’s own positive brand image to help create product differentiation. "Intel Inside" is, perhaps, one of the most sustainable examples of this.
Ultimately, if help in winning and retaining customers comes via the IT team and the suppliers they work with, then the real winners are both the in-house IT team and the business as a whole.
Ian Robinson is a Principal Consultant at Peru Consulting, specialising in IT Strategy. He has worked in IT & Telecommunications for 30 years, holding a wide range of CTO, CIO and business leadership roles. His focus is on driving innovation and cost transformation.