Retail executives continually seek to bridge the gap between business leadership and technology adoption. Current priorities include: improving inventory efficiencies with RFID; embracing mobile engagement, leveraging localization and personalization; and harnessing Big Data with retail analytics.
To learn more about business priorities across industries, Constellation Research conducted a survey designed to identify the current mindset specifically of organizations with $100 million to $1 billion in annual revenues. The study, titled, Mid-Market Customers Still Seek Turnkey, Last-Mile Solutions, emphasized that mid-sized businesses remain a vibrant and growing segment of the economy.
Based on input from 339 respondents, the report revealed an improved outlook on IT budget conditions in this year’s survey versus the same survey in 2011. Although 64.7% of 2011 respondents expected IT budgets to decrease in 2012, less than half (44.8%) of participants in 2012 anticipated a reduction in 2013. Almost one quarter (24.5%) thought budgets would increase in 2013, while 30.7% expected them to remain the same.
Advertisement
The annual study highlighted three key drivers behind the improved outlook for IT budgets in 2013: the replacement of legacy solutions; a shift to the cloud; and keeping up with larger, competitive enterprises through improved operational efficiencies.
“Merchants face massive challenges as new retail commerce options and silos continue to emerge,” Ray Wang, Principal Analyst and CEO of Constellation Research, and author of the study, told Retail TouchPoints. “Social, mobile, emerging digital payment options and other new channels that add to Big Data further complicate these challenges. Mid-market retailers are seeking industry-specific IT tools that provide vertical support, especially as they enter the world of matrix commerce ― which extends beyond the sales and customer focus to include management and optimization of supporting source and supply chain facets,” he said. “To succeed, merchants must address the intersection of demand signals and supply chains in an increasingly complex world seeking frictionless buying experiences. This level of competition and market shift requires a new emphasis on IT expenditures, priorities and vendor selection.”
When study participants were asked to select from a list of budget items, five top priorities for software applications in 2013 were revealed. Noted here with approximate response percentages, survey participants said forthcoming software solutions should:
1. Provide deeper and more relevant vertical capabilities (90%). Software tools should come out of the box with the prerequisite features, address industry requirements and integrate with common technologies;
2. Keep organizations compliant and up-to-date on regulations (85%). Providers need to deliver regular and relevant updates that allow mid-market organizations to stay abreast of proliferating global regulations and legal compliance issues;
3. Deliver peace of mind and dependable support (80%). Organizations expect long-term partnerships with technology providers as well as more “hand-holding” to address technology issues and co-develop solutions;
4. Reduce cost of ownership and complexity (71.4%). With modernized applications and IT upgrades on the rise, savvy software buyers have calculated operating costs and want lower maintenance as well as reduced upgrade complexity, since over-customization currently results in solution replacement rather than improvement; and
5. Improve mobile access (68.1%). Mobility solutions must include offline access, ruggedized scenarios and security requirements delivered out of the box. In addition, the growing Bring Your Own Device (BYOD) trend requires more simplified mobile enterprise management deployments.
7 Best Practices For Choosing A Vendor
Constellation Research concluded the study with recommendations for choosing a software vendor, based on “conversations with thousands of clients,” according to the report. Summarized here, the seven Best Practice recommendations are:
1. Assign a dream team upfront. Vendor selection requires a team approach that should include business leads, procurement experts, technology leads, legal staff members and executives, as well as external advisors and experts as needed;
2. Begin with the end in mind. Start with the questions that the business needs answered then measure the metrics that matter most.
3. Ideate the future state. This is the opportunity for transformational innovation that can change the business model, improve customer experiences and accommodate future business processes;
4. Map the gap. Optimize existing assets, shed true legacy and craft a path to the future based on the current state;
5. Invest in change management. Technology adoption starts with culture. Be sure processes align with people and that form follows function;
6. Compare the alternatives. Direct and indirect costs and benefits as well as risk and flexibility should be factored into head–to-head vendor comparisons; and
7. Fight hard for contract rights. Before signing the contract, account for all six stages of the software contract lifecycle: selection, implementation, optimization, maintenance, retirement and renewal.
