From scooter to F1 race car… Here is how to implement a successful technology strategy…
“Investments in the right kind of technology can significantly improve the bottom line for retail businesses.”
“Choosing the right technology and deploying the optimum solution has though become an overwhelming task with mind-boggling options, disparity of costs, features and opinions which make the selection of a technology partner a daunting task for retail managers.”
Here are some serious facts to put you in a “proceed with caution” frame of mind. Statistically 93 per cent of retail software projects run over time, 65 per cent of projects exceed the approved project budget and 79 per cent of projects fail to deliver even half of the agreed business benefits.
It is also evidenced, (statistically), that at the time of “going live” with the project there will be a very high risk of significant unwanted business interruption. Data suggests the risk is a one in two chance, yes that is a 50 per cent chance that your business will experience unplanned and unwanted negative interference.
The decision to move into a technology strategy comes at a cost and with the low end of the scale at five per cent of retail revenue it is imperative to make the right decisions at the right times with the right partner (s).
In this regard the dilemma of “can’t see the forest for the trees” is common place and therefore follows that to make “the right decision” in choosing “the right ERP partner” you have to stand further back and start with what really are the simple decisions for success.
LESSON ONE: The right decision is all in your attention to the homework detail
One of the biggest dangers in determining which retail software to implement and with which software source to partner, the challenge is to have clear and accurate vision and understanding on where your business is today and where you want it to be tomorrow. This is the fundamental critical starting point to embark on implementing a successful technology strategy.
Without completing the homework to determine a clear, detailed and accurate “truth statement” the danger is “what you think you need, and what you really need may be totally different”. A second but equally as important caution is that very often and despite the best intentions, what you think you are getting in the software and what you actually get may and often is “not exactly as we had in mind!”
LESSON TWO: Know where and why you will apply the technology and for what benefit
In retail today, technology can be applied across all retail functions so it is important to identify where the most value can be achieved, know how fast the benefit will be realised and identify where it will deliver the maximum business benefit!
Is the use of technology intended to bring speed of decision making into your business or to increase the accuracy of data interpretation or to build customer loyalty or to improve the management and efficiencies within the supply chain or to increase bottom line profit?
No matter where or why you want to implement technology in your business it is imperative that you assign measurable performance improvement indicators. Seek inputs from the nominated ERP partner and then include these as required guarantees within the deal.
LESSON THREE: Understand the importance in the pace of change
The challenge for the retailer is how to make the technology transition? Is it in one quantum leap from scooter to F1 or is it one step at a time on a journey where the final destination is already identified?
If a retailer moves too SLOW then they lose customers, sales and profit whilst their competitors move further ahead in market advantage. Arguably this will lead to an even more damaging risk and that is the potential loss in customer loyalty and a reduction in market-share!
However, if a retailer moves too FAST there is a danger of a mismatch between software functionality and the skill and capabilities within the organisation to “drive the software for success” and that can lead to operational failure!
LESSON FOUR: Stay determined to find “the right” partner with “the right solutions for you
What is “the right” ERP solution? Now if you stay true to lessons one and two at least you will significantly improve the chances of identifying “the right” ERP partner who not only meets your business needs of today but who can also support your needs over the longer journey.
Hallmarks of a great ERP solution:
- An integrated system using real time (or next to real-time), data without relying on and waiting for periodic updates.
- A common database, which can support all applications across all functions.
- A consistent look and feel visually and operationally throughout each of the individual modules irrespective of within which organisational function they are applied.
- Installation and integration can be done with the least cost, with the least disruption to business, with the maximum compatibility to existing systems and is supported with high quality user training.
- The solution delivers the maximum ROI in the shortest period of time.
- The solution scalability – delivers today and is ready for the business needs tomorrow.
Mistakes are most likely to occur when tradeoffs and/or shortcuts are made so it is critical to stay determined to find “the right” solution for your business, even if it takes a longer time than was planned as investment here is your insurance policy for success in the future.
LESSON SIX: Shortlist the possible partners and match you needs against their solutions
The “gap analysis”: once you clearly know what you want then it is a relatively easy process to confirm if the solution you are considering will meet your needs or not.
The secret to success: never make assumptions nor take processes for granted as this is dangerous and will invariably lead to problems once project implementation commences.
Continually compare and contrast what the solution can do to what you have identified you need it to do. This will give you a list of modifications to consider.
There are dangers in changing the solution software and there are dangers in trading off your business needs so this is a critical step that requires careful interpretation and accurate assessment of the action impacts!
To modify the existing product to suit your needs is one decision that can see the budget costs explode however trading off your identified needs and taking the standard product can result in undermining the functionality required for you to deliver success.
LESSON SEVEN: to drive the use of technology you need qualified drivers
Never underestimate the importance of high quality user training programs. There is no use having the F1 racing car and all the support team to race if you do not have a world class driver! Getting the best out of the technology relies upon how skilled and retail smart are the users!
This is just the start in the process but gives you an introduction to the reality of the challenges in setting a technology strategy for your business. Selecting an ERP partner is like entering into marriage: it is easy to get in but expensive to get out so choose your partner with great care.
If you would like to know the 10 steps to success in choosing an ERP partner send me an email.
InsideRetail.Asia columnist Darrell Wisbey has 40 years retail experience, living and working in Australia and Asia. Darrell is the chief mentor for GREAT India B School. You can email email@example.com.