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Strategy + Technology

How to implement a new retail management system

Justin Cohen
Head of Marketing & Enablement
February 26, 2015
In this guide:

What is a retail management system and why do you need one?

If you run a successful retail business, you have a good reason to feel proud. Retail is a notoriously challenging industry to work in, and only the most capable business people have succeeded.

However, when they reach a certain size, all retail businesses need a good retail management system so the business stays under control and its potential can be maximised. Consider these challenges that you’ve perhaps already faced or are anticipating as your business grows:

  • As your retail business grows, the volume of data balloons and it becomes increasingly difficult to handle. Without a sound retail system in place, data like customer orders, inventory, shipping and so on must be tracked and organised manually, resulting in high staff costs and increasing the likelihood of errors.
  • Every time you want to do something new or change a business process you find that it is very difficult. Making disjointed legacy systems and spreadsheets work together is a daunting task and trying to change them later is even harder.
  • Have you ever felt like the various departments in your organisation were operating on different planets? A retail management system places all data in one centralised database system, synchronising your cash registers, inventory, online shop(s), customer data, warehouses and supply chain.

Implementing a comprehensive system to manage a retail enterprise does take time and effort. Still, once you’ve gotten over that hurdle, you won’t look back, as your retail business will not only run more smoothly but also be more capable of expansion than before. It will become scalable.

While selecting a good retail system vendor and putting in place a strong team will win half the battle, there are still several things you should do in order to ensure the highest chances of success. Because enterprise-wide system implementation requires cooperation at every rung of your organisation, it is crucial that you start on the right foot by driving your team members to make the necessary preparations, to enable your system vendor to work without obstructions.

This guide was written with the aim of demystifying the retail system implementation process and making businesses aware of what they should expect and do to prepare for an imminent enterprise-wide system implementation.

We hope you will find this guide useful and wish your retail business the greatest success possible!

Choosing the right retail system vendor

The very first step, and arguably the most important, is to choose a reliable system vendor who not only provides you with a product that suits your business but who is also able to provide implementation services, to make the introduction of the new system to your business as seamless as possible.

There are many retail system vendors in the market these days, so trying to determine which one is best for you can seem like a monumental task. To make things a bit easier for you, here’s a checklist you should run through when evaluating a potential system vendor:

  • The vendor should be fluent in retail – A good retail system vendor is more than just a generic systems provider. Retail systems are wildly different from other types of systems, so engaging a vendor who specialises in retail is crucial to ensuring a smooth transition.
  • The vendor has a solid track record – One should beware of unknown system providers, but even a well known vendor does not ensure success. Just because a vendor has made numerous sales doesn’t mean that the majority of the attempted implementations have been successful. It is best to engage a vendor with a perfect or near-perfect success rate. This is not easy as few retail system vendors are prepared to do what it takes and see through every implementation to a successful end. Changing market conditions, retailers’ key staff changes, new business requirements and poor quality data in the legacy systems may all obstruct the project. By the way: beware of vendors who are just resellers. They are unlikely to have the level of commitment and agility you can get from the vendors who actually developed the software.
  • The vendor’s solutions can be easily adapted to your business model – Unfortunately, there is no such thing as a one-size-fits-all computer system. The right system for you must be retail-specific, so the vendor doesn’t need to reinvent the wheel to cater to your business processes.
  • The vendor should be able to implement the system for you – While it might be tempting to cut costs by going for a cookie-cutter system with parts of the system implemented on your own, the huge costs involved when a job is botched make this a bad idea. Ideally, a vendor should be able to implement the system for you from start to finish, and in all parts of your business.
  • The vendor’s solutions are market-proven, scalable and cost-effective – A great vendor becomes great by delivering smooth solutions, and you’ll want to look for a track record of already implemented market-proven, scalable and cost-effective systems that can successfully grow with your businesses.
  • The vendor is reliable and trustworthy – You will be working very closely with your system vendors, and will have to make them privy to some very intimate information. Hence, it is important to pick a vendor that is reliable, trustworthy and makes the effort to understand your business.
  • The vendor is able to implement the system quickly and successfully – When it comes to implementing a retail system for the entire enterprise, speed matters. The longer implementation takes, the messier things can become as the market and business never stand still, and the more difficult it will be for your staff to straddle the old and new systems. Watch our video on why retail IT implementations fail.
  • The vendor does not offer the cheapest solutions on the market – When determining a budget for a new retail system, we would like to caution against aiming to pay rock bottom prices for the cheapest solutions on the market. Cheap, DIY templates usually end up costing well-meaning businesses more money than they imagined by forcing them to hire their own consultants and, more often than not, to spend on damage control when things go wrong.

  • The vendor’s platform delivers progressive functionality without complexity – The technology required to stay relevant and competitive in retail is ever changing. It’s critical that your system vendor offers a feature-rich platform with latent and constantly evolving functionality that you can turn on as your business grows, and as the landscape transforms. Right now, omni-channel capabilities must be innate in the retail system you select. And, looking ahead, the right vendor will be able to guide you towards the technological necessities of tomorrow.


Keeping an eye on your purse

No one can predict exactly how much a full implementation of a new retail system will cost you. Many variables come into play at each stage of the process. Solid upfront analysis must be done to narrow down the expected costs, but you still need to bear in mind the possibility that your cost may end up deviating quite a bit from your initial estimates.

So it is prudent to plan to spend only 80% of your budget to allow for unforeseen implementation costs. Spending must be reviewed on a regular basis, and if you find that you are spending considerably more or less than expected, you need to reassess the state of the project.

Once implementation of the new system is under way, here are some money management pointers you might find useful.

  • Review the business process and consider altering your processes to help the transition along. This can lower costs by reducing time wastage and unnecessary software configuration or modifications.
  • One of the culprits of cost overrun is mismanaged training and education of staff, which businesses tend either to underestimate or go overboard with. A well-crafted training plan is crucial to saving costs in this area.
  • It is generally a good idea to start training your staff as late as possible, so that any new knowledge and skills can be immediately used. Starting the training process too early can result in a need for repetition and refreshing, and wasted efforts in the event of staff turnover.
  • The project should be run as fast as safely possible so that costs are not wasted due to changes in staff or the business itself.

  • Data import and migration is another high cost area, and much care should be taken to prepare data prior to implementation.
adapting-your-business-processesAdapting your business processes

Implementing a new retail system is a massive undertaking, so you will want to adapt some of your business processes to suit the new system to make the IT part of the project simpler. Don’t be intimidated — adapting your business processes to make them compatible with the new system is a lot less scary than it sounds.

While most retail packages can be tweaked to suit your existing business, and indeed a good system vendor will aim to configure the system to match your processes, problems arise when your existing processes have been put in place by tradition or personal preferences rather than by structured review and process design. In many cases, it is advisable to correct lacking business processes rather than to have a system designed around practices that are flawed and liable to cause problems somewhere down the road.

For instance, if stock arrives in the stores without purchase orders, this is considered a poor practice irrespective of reasons. The introduction of the new system could be the catalyst to change this practice.

As your team members may initially be resistant to change, it is important to communicate closely with them to ensure they appreciate why any changes need to be made. While the teething stages may be challenging, it is crucial that your teammates understand that amending your current practices can pay great dividends in future.

Of course, not all business processes should be changed. This is particularly true when your business processes constitute a strategic advantage over your competitors.

managing-change-in-your-organisationManaging change at your organisation

As we have mentioned in the previous section, it is important to communicate effectively at every rung of your organisation in order to help the transition along. While the technical aspects of the new system will be handled by competent vendors, the onus of facilitating a smooth internal change falls on you.

Evaluating readiness for change within a team can be notoriously difficult, but once you have made the commitment to push through with the necessary changes, don’t be afraid to engage the team with a clear end goal in mind.

Waiting until you receive unanimous support from your team or hesitantly feeling out their sentiments are not the right steps to take. Instead, aim to introduce the new system to the team and implement changes smartly. Here are some ways to do so:

  • Have change managed by professionals – Never underestimate how well a change can be managed. Poor change management can thwart your efforts to migrate to the new system and escalate costs. As such, it is advisable to assemble a competent change management team which includes a project management professional.
  • Define key steps in your change management plan – Change management should be conducted in an orderly fashion in accordance with a sound plan. In addition, all team members should be kept apprised of the timelines for each step in the change management plan.
  • Engage senior executives to oversee change management implementation – Even if your change management team is handling most of the key areas in the plan, it is important that the entire process be overseen by key persons in the organisation who can ensure that their team members are cooperating well internally and with the vendor.
  • Use the system to drive business change – If you’ve picked a great new system and a vendor who are right for your business, then you have created a solid base to enhance not only your systems but the business as a whole. Your task is to effectively communicate this to your team and help them to understand how they will benefit from the move and the impending changes.

  • Remember that integrated retail platforms work best when deployed across the entire business – The more facets of the business over which you deploy the new system, the greater the benefits and the more smoothly your business processes and departments can be connected and synchronised. Bear this in mind if you encounter resistance from certain departments in your organisation. It is not uncommon for the departments to try to hold on to their old departmental tools and demand that they be integrated with the new system instead of being replaced by it.
data-cleansing-retail-softwareData Cleansing

Cleansing of the existing data is one of the first challenges you’ll encounter on the road to successful implementation. As a functioning business, you are likely to have an extensive collection of records which constitute an asset and need to be retained within the new system. But, not all of the old data is valuable. Data cleansing covers the process of identifying obsolete records and correcting discrepancies, inaccuracies or corrupt information in your existing records.

The importance of conducting a thorough data cleansing exercise prior to, or as part of migration to a new system cannot be overstressed. Usually it is very difficult to estimate the amount of time and resources needed for data cleansing, as unexpected issues have a habit of cropping up during the process of progressive discovery.

A shoddily-completed data cleansing exercise can hamper the effectiveness of the implementation and staff training. It can also negatively impact system operations after it goes live. As such, it is crucial that data cleansing be taken seriously and solid plans put in place before it begins.

Here are the data cleansing activities you’ll typically be required to engage in:

  • Discovery to identify all the existing data types, their formats and the level of consistency
  • Data interpretation and mapping between the old and new system
  • Selection and development of conversion tools
  • Trial runs, data and process refinements
  • Live conversion.

Note that you should expect the new system to be equipped with a range of tools to allow for easy import, validation and upload of the data from your legacy systems.

In particular, you’ll need to take note of the following points:

  • Never skip on planning and defining the data uptake, as hours saved at the start can result in days lost later on. Retail businesses typically deal with considerable volumes of legacy data, and this has to be worked through systematically.
  • Some of the biggest challenges you’ll have is the need to deal with dispersed legacy systems and data and creating the requirements for an iterative data migration. Some of the data in the existing systems will be repeated and it will be inconsistent. All such inconsistencies will have to be investigated and rectified.

  • It is possible to begin data cleansing anytime. For instance, any inconsistencies such as the absence of standard addresses can be corrected starting from today, well before the implementation of the new system starts.
after-retail-system-implementationAfter Implementation

When your new system provider has given the green light that the system has been implemented, there are still a few things that must be done to ensure that the system runs as smoothly as possible.

A good system should have come complete with built-in tools for auditing and consistency proofing, meaning you should not have to conduct your own general system tests after implementation. You should be able to just conduct User Acceptance Tests to satisfy yourself that the parts of the system you will use behave the way you expected.

User Acceptance Testing (UAT) process requires your super users to verify their parts of the new system. Following the UAT, volume testing needs to take place as well.

Once all the necessary verification has been carried out, it is time for your system to go live. While you may be tempted to immediately deploy the system in its entirety, it is worth noting that gradual deployment is preferable to making the entire system go live at once, even after multiple rehearsals, as problems invariably emerge during the cut-over. It is wise to keep the number of the emergent issues at a minimum, by deploying the system in stages.

Remembering that a successful retail system relies on four pillars, make sure that once it runs live, all of them are managed. Whilst your software vendor needs to look after the software part, you must make sure that your organisation handles the other three on an on-going basis. Processes must be followed, people must be competent (trained or re-trained if required) and data needs to be meticulously maintained. The latter covers both: all your reference data and transactional information.

In Closing

Successfully implementing a modern and proven retail system can revolutionise the way your business is operated and unleash the full potential of your retail business model and strategy.

As you can see, all this doesn’t come without extensive preparation and diligent planning. If you’re up for the challenge, however, facilitating a successful implementation can be a huge achievement and a career highlight.

We hope that this guide has been useful in making you aware of the challenges you and your team are likely to face prior to, during and after the implementation of a new system.

We would like to emphasise that all the activities you will engage in, while demanding, are by no means impossible, and a lot of the difficulty of successfully pushing through a new system can be alleviated by proper planning and attention to detail.

Any retail business, no matter how brilliant, can benefit from a sound, efficient management system. It takes courage to dive in and reap the benefits, but it needs to be done. If you are a great merchant, you still need good tools. Like with a great musician—if you have to play on a bad instrument, your performance will be ruined. Get yourself a good one!

Finally, we need to state the obvious: while all the advice in this article is likely to work well for you, we don’t know your particular situation or challenges. So, before you act based on our suggestions undertake your own research and enquiries. It never hurts to seek a broad range of insights. Also, at any time, don’t hesitate to get in touch with us. We are very experienced in retail system implementation and may be able to help you.

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About the author

Justin Cohen has been working in marketing and media for the last 15 years, mostly in the digital space. He has augmented his journalist studies with extensive travel, giving him unique insights into commercial and social spheres of life. Justin looks after Retail Directions’ marketing direction, brand positioning, digital content and community. He is highly respected by his audiences, colleagues and the senior team at Retail Directions.

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