Board Member / Shareholder

Computer systems are critically important in every retail chain because they allow management to control the business and its remote branches. Without a good computer system retailers can never have the right stock in the right place at the right time, at the right price. Your retail business is guaranteed to consistently under-perform if it does not have a good computer system. This is reason enough why shareholders and their Boards need to have a strong interest in Information Technology and how it is used within their enterprise.

Shareholders own the business. The Board takes care of the business on behalf of the shareholders. To fulfil its role, the Board sets company objectives and then guides the company to achieve them. It needs to optimise company performance and manage risk along the way.

How do these Board tasks impact on Information Technology in a retail enterprise? It means that shareholders have the right to expect that the Board will deliver:

  • Systems that are retail-specific and work well. Some retailers have bought systems that were originally designed as accounting packages or as manufacturing systems. Little wonder that 70 per cent of system projects fail. If you need a car, you buy a car - not a modified truck or a motorbike.
  • Systems that deliver what is required at the lowest possible cost. When you hear truthful reports about a medium-size retailer spending $90,000,000 on a computer system, you should shiver. No retail system in the world is worth this kind of money.
  • Highly reliable systems. A system that prevents the stores from trading because of a network failure or a central server overload is completely unacceptable in modern retail.
  • Systems that are not fragmented. Some retailers have adopted a so-called 'Best of Breed' strategy which delivers a separate Point of Sale system, a separate Merchandising solution, a separate Warehouse solution, a separate Customer database, separate Forecasting and a separate Financial system - all supported by dozens and dozens of spreadsheets. This defies reason. Studies show that the US retail industry wastes 40 per cent of IT expenditure on interfaces. Since some of the smarter retailers use integrated systems, you may expect that those who don't must be spending far more than 40 per cent. Fragmented systems are heavily dependent on multiple interfaces and on human intervention to keep them running. They also cost a lot and require a large team of IT personnel to run. For example, we know of one Australian retailer who operates 150 stores and employs more than 25 IT people. The IT manager publicly claimed that theirs is a "small shop". In contrast, a typical Retail Directions customer employs one or two IT people for every 100 stores in their portfolio.

Retail Directions software is used by numerous retail chains, some of which are publicly listed. The systems from Retail Directions are retail-specific. They work well. They are fully integrated, are highly reliable and are very cost effective.

From the Board's perspective, if you want the right IT backbone to support your corporate objectives, to meet the requirements of corporate governance, and if you want to minimise risk, then the Retail Directions solution is perfect for you.