HULFT BANNER
Subscribe to our e-newsletter
Follow us on Twitter
Privacy and cookies
Established 1996
Tuesday 15 October 2019

LATEST NEWS 

Payments Awards 2019

Focused approach

Written by Glynn Davis
01/08/2009

The aforementioned state of affairs has resulted in the overall spend this year expected to fall compared with 2008, according to a recent IDC survey, which found 21 per cent of respondents across Europe will be investing less than previously. This is especially acute among the largest enterprises.
Wayne Usie, senior vice president of retail at JDA Software, says: "ERP projects tend to be very costly and time-consuming, so are the first under threat during tough economic times. What we're seeing today are many companies still prepared to invest in IT, but in those projects that provide a rapid ROI with specific, retail-related benefits."

Jeremy Oates, UK head of systems integration and technology consulting at Accenture, agrees: "People are being more focused on their investment. They are looking at extending the use of their systems, driving out costs, and better managing their data."
He suggests that when setting up their ERP systems many retailers will have embedded the key elements into their businesses but when it came to extending the scope they will not have given it much attention. "In a large complex organisation you often find that in order for systems (integrations) to be initially successful you limit the scope so retailers might not have say, put all their procurement through their ERP system."

Falling down

Retailers have also been lax on the quality of their management information (MI) during the boom times, especially with forecasting as sales exceeding forecasts is not a problem when compared with revenues coming in at less than the forecasted number because this will mean spare unwanted stock. Oates says this issue is now coming into focus as the use of data throughout a retailers' business is a recognised lever for generating more value from ERP systems.

Andrew Stevens, solutions architect in the enterprise business unit at Sage, agrees: "Liberating data for use throughout the business was not seen as interesting but today one of the areas where enhancements can be made to systems is through embedding reports more fully into a business. We're bringing information to the fore so it can be used without people sometimes realising it."

Full integration

One key area where this data is having a profound impact is with the continued move by retailers to develop fully integrated multi-channel propositions. Although Chris Webster, head of retail at Capgemini, says many investments by retailers have chiefly involved the front-end - in order to support the platforms for the web and to integrate into 'Click and Collect' type solutions - he believes there is a growing move towards using data throughout businesses and across channels and that this will impact on retailers' back-end infrastructures, notably their ERP systems.

"They have not yet integrated their online businesses with their catalogues, contact centres and stores in order to give a single view of stock. Such a move is prompting them to propagate information throughout their businesses and across all channels. Retailers will therefore need to assess their ERP systems and see what additional functionality is needed," suggests Webster.

This extra functionality will involve most tier one retailers considering either buying new modules from their existing core ERP provider or from specialist vendors: "They are still using a mix of both and basing the merits of these extensions (to their ERP backbones) on functionality rather than the level of integration work involved."

The potential hassle involved with integrating the modules is not at the forefront of their decision-making,
which is in contrast to many mid-sized retailers, according to Russell Dorset, sales and marketing director at Maginus, who suggests such companies are looking at end-to-end solutions in order to
save money.

"They are now examining the best-of-breed approach and deciding that the compromise of not having the best of components from a single (ERP) supplier is the best option from a cost perspective. When choosing disparate systems the join is the weakest link and with many retailers there are too many joins in their systems," he explains.

Dorset says many retailers' systems have been "built on functionality rather than on a platform" but that this thinking is changing. This is partly prompted by the difficulty many smaller software houses are having with keeping up with R&D spending. And the big players such as Oracle and SAP have continued to either buy-out these specialist vendors or plug into their expertise through joint-venture agreements.

Maginus itself has tied up with Microsoft Dynamics AX to provide its multi-channel functionality to the ERP platform that is aimed at mid-sized retailers. And business has been brisk, according to Dorset, who says the combination of limited IT implementations taking place in-store (that has freed up some budget) and the necessity for retailers to develop multi-channel capabilities are helping drive-up sales.
It is a similar story from Sage, with Stevens suggesting the company is enjoying "lots of activity with strong first quarter sales" from its core market of retailers with turnovers of £10 million to £100 million.

"The reduction in spending is being felt most at the top-end among tier-one retailers. With larger companies the complexity goes up significantly and so the deployment of systems will also be more complex. This is not the case at the smaller end," he suggests.

What may well affect the smaller players more is the emergence of cloud computing, which Oates predicts could have a "substantial impact on the marketplace" as applications start to move away from the ERP system and are hosted and operated remotely.

"For the largest businesses the enterprise backbone will remain in-house but for small companies it could all be run away from the business. It is still early days but we are starting to see a trend, although people will first have to be comfortable with the security aspects," he says.

Such moves will require radical change to IT systems and so cloud computing is not likely to be on the near-term horizon of many retailers. For now merchants of all sizes are instead firmly focused on leveraging more value out of their existing IT infrastructures.


Retail Payments Survey

Related Articles

Technology for Marketing

HULFT
Find out how HULFT can help you manage data, integration, supply chain automation and digital transformation across your retail enterprise.

Talking shop: retail technology solutions from Brother
Retail Systems editor Peter Walker sits down with Brother’s senior commercial client manager Jessica Stansfield to talk through the company’s solutions for retailers and hospitality businesses, what’s new in labelling technology, and the benefits of outsourcing printing.
Most read stories...
World Markets (15 minute+ time delay)