By Andrew Gorecki, Managing Director at global retail software specialist, Retail Directions.
Do you remember Mary Shelley’s story of Frankenstein – who created a monster from the sum of many parts that eventually ended up killing its creator? It looked ugly too.
As I observe the retail industry, I see many retailers living with system architecture reminiscent of the literary monster. They have to cope with massive complexity, which they can’t control, and their businesses buckle under the continuing strain.
How has this happened?
In the past, it has been easy to secure massive IT budgets. This let retailers buy overpriced, usually non-retail-specific software, which needed massive effort to customise and took years to implement. Such retailers have assumed that big bucks had shown how serious they were about their IT.
These days, retailers tend to be much more frugal, but they still get easily tempted by the promise of the next shiny new IT thing that comes along.
Missing technology skills
It wouldn’t be practical to expect all senior retail executives to be technology experts. Yet, the most successful retailers have CEOs fluent in technology. Without such expertise at the top, corporate boards usually use the level of IT spending and investment as the key measures of retailer executives’ commitment to having great IT systems.
Paradoxically, this has given some other retailers a strong competitive advantage, as they have managed to put in place good systems that suited their businesses really well, for a fraction of what their competitors spent.
Spending big and then even bigger
The matter wouldn’t be so grave if the big spenders ended up with gold-plated, but solid systems. In reality, many experience serious IT issues, resulting in the classic scenario of being forced to throw away good money after bad.
They try to salvage what shouldn’t have been started in the first place.
The importance of architectural clarity
The challenges described above stem from a blurred strategic vision and lack of architectural clarity for the systems within the retailer’s enterprise.
In contrast, retailers with clearly defined architectural IT strategies stick steadfastly to their master vision, understanding what works well for them – whether it’s the latest must-have technology or even a somewhat antiquated system that still performs well.
Without such architectural clarity, new systems and various add-ons and middleware keep creeping in. Suddenly, one day you realise you have created a monster – and that monster can kill! We have all heard stories about retailers encumbered by their systems.
The trend to ‘composable’ and why it needs to be re-thought
In the world of IT, when people end up with something messy, they rarely question their approach and instead look for silver bullets.
Unfortunately, silver bullets don’t exist, so new terminology gets adopted instead, trying to make bad systems look legitimate. You might have heard about the latest – ‘composable’ systems, replacing the somewhat worn-out term of ‘best of breed’.
But, the problem of overcomplicated systems won’t go away by simply re-labelling a mishmash of solutions that don’t work well together.
Let’s consider a car as the analogy. Cars vary in quality and price, but not a single car in the world has uniformly the best components. What makes a car great is the smooth way its components have been made to work together.
Clarity leads to power
So, if you find yourself living with your own Frankenstein’s monster of systems, how do you steer yourself out of the mess? Start by looking at your existing system components to figure out what does work and what doesn’t.
Like in the ‘Apollo 13’ movie, just after the ship malfunctioned – the man in charge asked his team: “What do we have in the ship that’s actually good?”
Once you make this distinction, you can start to think about how to remove the bad parts.
Please note that I don’t claim that the idea of hybrid solutions has no merit at all. Plugging in specialist elements can be useful in some cases. But such solutions need elegant core architecture and well-designed, closely coupled integration in order to make your systems work as one.
The IT industry has been notorious for trivialising system integration. In reality, hardly ever can you just plug and play.
If you look to invest in technology to improve your business, be aware that ‘composable’ doesn’t mean agile either, despite the claims to the contrary. The ‘composable’ or ‘best-of-breed’ usually results in rigid systems. I recall The Economist making a comment a few decades ago about a high-end ERP system, equating the implementation of such a system with pouring concrete into the business. I was impressed with the precision of this analogy.
So, beware of a Frankenstein monster emerging from a ‘best of breed’ or ‘composable’ IT ‘strategy’, because once it comes alive, you will struggle to control it.
Victor Frankenstein certainly couldn’t!
About Retail Directions – www.retaildirections.com
Retail Directions provides a unified retail management software platform that enables retailers to simplify retail operations, reduce operating costs, and deliver seamless experiences for consumers and staff.