IT For Retail’s Sake
Almost exactly three years ago, I wrote a piece called IT for IT’s Sake talking about a retailer who had invested in technology to support the IT department. Even though I know that retailers make these kinds of investments all the time, it still felt rare — here was an IT leader who had enough pull with his budget to be able to spend money on technology that actually helped the IT department, and only really indirectly helped the business.
Too often, we see retailers who view IT only as an expense: The business is what is really making money, and IT is a cost to be contained as much as possible. It sets up the basic friction between IT and the business. On one side, the business says, “Just do what I want you to do! “ Especially given today’s budgetary environment, where the business leader owns the budget and doles it out to IT based on what they want to accomplish, of course the business doesn’t want to pay for anything beyond the functionality they’re looking for. Integration? Not the business’s problem — and certainly not something that should be borne as a line item in the business’s budget.
On the other side is IT: “I can’t ‘just do what you want me to do.’ First of all, I don’t even understand why you want to do this, so I can’t make good technology decisions about how to enable what you’re looking for in a way that will be flexible for the future. Second of all, you’re going to have to pay for some integration if you want the data you need to make this work. And third, if you would just pay a little more now, then I could implement this in a way that helps out a lot of people in the business, including your department — in the future. “
And the discussion quickly devolves into people talking past each other. “Wait. It’s going to take this long and cost this much? I can’t wait that long! “ “Well, if you would just fund some of the things I need, I could make this go much faster. “ “There you go again, asking for yet more money for something that doesn’t make us any money! “
OK, cue the record scratching sound. Time out! While it may be true that for a long time technology really didn’t directly enable money making, we’ve entered a completely different era now. Technology is what makes loyalty programs possible. And eCommerce. And mobile shopping apps. If you turned off IT today, you would lose what is rapidly becoming more than just a store’s worth of revenue from online. You wouldn’t be able to process half the payments you take. You wouldn’t be able to import half the products you need, as more and more import documents are required to be electronically transmitted. You wouldn’t be able to listen to your customers as they talk about you on Facebook and Twitter.
Technology makes retail possible today in ways it never did before. That seems trite — it’s something people have been saying for years. But I had a real déjà vu moment during the Crossview event last month that I continue to stew on. People may have been saying it, but it appears it hasn’t sunk in yet.
At the summit, marketing and technology came up as a topic, specifically the challenge of dealing with marketing who runs out and buys SaaS technology or buys into something like Foursquare, who got taken out for awhile by the fact that it uses Amazon’s cloud services — something that an IT department might not have been keen to sign up for because of exactly that risk. The room was executives, many with an IT bent. The complaint: marketing runs off and does these things, and then when something goes wrong or when they suddenly realize they need to integrate it with eCommerce or loyalty, they come running back to IT for help, leaving the technology group with a tangled mess that doesn’t fit into their architecture or their budget to support.
But that’s not the real problem. If you frame the problem this way, that IT seems less and less capable of supporting the business — that IT is slowing things down, not enabling what the business needs, that the business creates half these problems by running out and buying things behind the IT department’s collective back and creating a bigger mess later — then you will never escape the problem.
The problem today is that the consumer drives IT investment priorities, and the business doesn’t know it yet. They may be responding to consumer demands or behaviors, but they’re still thinking about it as my budget and my project.
The consumer drives, but IT is now a major part of the engine that moves the retail bus, not just products. That means that instead of complaining about how IT slows the business down and instead of fighting to slow the business down so that the IT organization can retain some semblance of control over its architecture, the time has come to invest in IT. If you don’t control the direction that you need to take (because consumers do), then the only way you can prepare is by building the most flexible, fastest technology organization that you can. Marketing runs out and buys SaaS and cloud services because it needs to move at the speed of the customer. IT needs to be able to do that too.
IT, not for IT’s sake and not for the business’s sake, but for Retail’s sake.
Ironically, this is the founding mission of RSR: to help retailers realize the full strategic value of technology, and to help vendors best position themselves to help retailers make technology a strategic part of their enterprise. Four years in for our business, and while the symptoms may have changed, the illness is still the same.