Market Analyst
As a Market Analyst, you continually assess the future prospects of publicly listed companies and private corporations going through an IPO process. Computer systems significantly influence the future performance of retailers because they allow the management to control the business and its remote branches. Without a good computer system retailers cannot have the right stock in the right place at the right time, and at the right price. Any retail business will consistently under-perform if a retailer ends up with a deficient computer system.
So how can you accurately assess the computer systems used by a retailer? What can you expect to happen when the retail business becomes listed or re-listed on stock exchange? Should you recommend it as a 'buy'? Will their results be sustainable? What will happen in the medium to long term?
You can look at the systems used by the retailer from two angles: their ability to support the retailer and how much they cost. The following diagram can help.
The Retail Directions system allows retailers to achieve the 'Star' rating. Our systems deliver high capability at a reasonable cost. Our customers get more for a fraction of the cost of other systems.
Amazingly, some retailers spent hundreds of millions (yes, you read it correctly) on their retail systems. So, even if they end up with a working solution, their bottom line will remain damaged for a long time. Funds that could have gone into other parts of the business such as stores or stock were wasted on IT. Yes - wasted - because money spent unnecessarily does not meet the standard definition of an expense: money that was legitimately spent to run the business. Retailers in this uncomfortable position fall into the 'Perpetual Pain' quadrant.
Some retailers fared considerably worse, having spent big money with nothing to show for it. These businesses fall into the "Disaster" quadrant.
How does a retailer end up in one of the top quadrants? By making one or more of the following mistakes:
- Selecting a non-retail specific solution, such as a system originally designed as an accounting or a manufacturing package. A tank or a bike converted into a limousine will never be a good family car.
- Selecting a solution that requires thousands of hours to implement, resulting in high risk, high costs and a massive time impost on the entire business.
- Selecting a solution that uses a typical system architecture rather than architecture required for mission-critical retail systems.
- Selecting fragmented systems, under the seductive banner of 'Best of Breed' strategy, a peculiar way of saying "no strategy at all".
- Selecting a system from an unproven supplier.
- Selecting a system that was built using a fashionable development platform, rather than on a set of platforms that deliver the right outcome for the retailers. For example, to use Java for batch processing will never be a good idea.
- Selecting a system that uses a proprietary database or programming language, making it impossible for the retailer to ever assume control of the application.
- Selecting a system from a supplier much larger than the retailer. If the retailer does not register on the supplier's radar screen they will be given poor service and will be charged a lot. If the supplier's legal department’s size exceeds the retailer's entire team, the retailer has made a catastrophic misjudgment.
Numerous retail chains use Retail Directions software, some of them publicly listed. The systems from Retail Directions work well and they come fully integrated, highly reliable and very cost effective. So if you want to be comfortable that the retailer you endorse has a strong IT system in place and if you want to minimise risk in your assessment, check whether they use Retail Directions. If they do, you can tick an important positive point on your check list.
Few retailers can deliver great results without the technology from Retail Directions.
And we do not have a legal department.