In the retail sector, which is preparing for a slowdown after five years of sustained real growth, IT is facing a two-fold challenge in 2006. It has to support higher trading volumes, but also deliver greater efficiencies to counter expected downturns.
"On the one hand, this growth has put pressure on many aspects of the retail business, with IT expected to meet and exceed expectations in stores that are probably doing 30%+ higher trading volumes than five years ago," says Jessica Knight, director of UCS Solutions, an IT solutions provider catering exclusively to the retail industry.
"But, as retail growth is now slowing, IT also needs to be able to deliver greater efficiencies to offset the margin pressure caused by a softer trading environment. This will apply equally to the infrastructure layer as to the applications and process layer."
One way for IT to exceed on the expectations of retailers, according to Knight, will be to deliver an improved customer experience in-store, through things like faster point of sale, mobile tills and other queue busting techniques, as well as ensuring the product the customer came to buy is actually in stock, is fresh, the right size and so on.
"This can be achieved through more scientific planning, forecasting and replenishment processes," she says.
As for improving in-store customer experiences and realising greater efficiencies, Knight believes retailers should explore cheaper store networking options and deployment of an ERP or package solution.
"At the infrastructure level, retailers should consider using new technology such as VOIP, where appropriate, consolidate their hardware and storage requirements, and also ensure more efficient procurement.
"At the applications and process layer, deployment of an ERP or package solution could free up large teams dedicated to the maintenance of a legacy environment. Alternatively, an investment in specific applications could allow more efficient inventory management or better labour scheduling."
<B>ITWeb IT Confidence 2006</B>
Jessica Knight, director of UCS Solutions, will be speaking at ITWeb`s upcoming IT Confidence 2006 (21 February) conference, where top analysts, CEOs and CIOs will explore the key trends likely to impact SA`s IT confidence levels in 2006.
Other speakers at the event include, among other, BCX CEO Peter Watt, BMI-T`s Mark Walker, Oracle SA`s Nicky Sheridan, SITA CEO Mavuso Msimang, the JSE`s Noah Greenhill and newly appointed chairperson of the ICT empowerment charter steering committee, Norman Munzhelele. For more information about IT Confidence 2006 go online to: http://www.itweb.co.za/events/itconfidence/2006/
But in the end, regardless of the retail IT solutions deployed, whether or not IT will rise to the challenge in 2006 and deliver on business expectations, will depend on the quality of strategic dialogue between the business and IT at the highest level in a retail boardroom, according to Knight.
"It will also depend on the extent to which the IT organisation is appropriately skilled and geared to deliver a prioritised plan, which is supported by the appropriate business case and governance mechanisms," adds Knight.
"We see a number of retailers doing this very well while others still view IT as a bit of a 'black box` and often relegate the discussion to a operationally geared discussion solely focused on cost not business benefit."
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