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It’s time for retailers to get their heads into ‘The Cloud’

Published On: November 21, 2013

For many retailers managing business processes, resources and legislation will be a continuous challenge. Developing proactive strategies beyond these can often be forced to take a back seat. There is a solution.

With continual pressures in the market such as new avenues of commerce and customer socialisation, retailers will be looking to ways of increasing operational efficiencies through infrastructure to maintain a competitive offering. Of the recent trends in IT cloud computing might just hold the key to these and others issues providing retailers with access to a level of services via powerful software applications, networking, storage and management tools that was traditional difficult to establish.

Cloud computing and services is nothing new or ground breaking. Much has already been written about cloud computing, but cloud services is essentially a method to work more efficiently via “Providing resources, software, and data to computers and other devices on demand” reference Wikipedia.

From a business perspective it enables retailers to take advantage of optimised infrastructure, providing benefits such as:

  • Improve financials and cash flow
  • Reduce medium and/or long-term Total Cost of Ownership (TCO)
  • Shift from capital expenditure (CAPEX) to operational expenditure (OPEX)
  • Improve Quality of Service (QoS) and/or Service-Level Agreements (SLAs)
  • Access to functionality and/or domain expertise
  • Scale labour and/or fixed asset capacity up/down
  • Improved external staff access (stakeholders, sales, consultants, etc.)
  • Improve customer demands and access

One aspect of retailing that poses unforseen technical challenges is structural changes due to growth, consolidation, high period loads or even tactical events such as pop up stores. Cloud services provides a level of agility making ecosystem changes easier to plan and provision. In essence as resources are required so can levels of infrastructure that manage them. Speed and agility of deployment are key to quickly driving return on investment, yet rapid deployment of systems can often be a bottleneck for businesses. For example opening up a new location or pop up store can be a logistical challenge in itself forgetting the infrastructure necessary to support it. Cloud services can make getting a new store online as easy as installing a new point of sale terminal and connecting to the network. Lifecycle capacity of hardware can be a demand on the business rarely accounted for in budgets, especially with the increase in technology. Cloud services can provide extended life for workstations where they are often bound by hardware requirements to run localised applications.

Customer experiences and demands are starting to drive the direction of retailers. This is in turn impacting on the level of IT investment required to manage and meet expectations. Understanding the connected customer is becoming a core competency. A recent study by Gartner found that business that enable their sales representatives to leverage data on a day-to-day basis stood to increase revenue productivity by 17%. That could be a considerable increase for many retailers, the challenge for retailers is responding quickly to these expectations which can place strains on budgets. Cloud services can make proving solutions easier empowering store associates with instant information anywhere, potentially on any device.

In today’s Omnichannel ecosystem a retailer is viewed as open around the clock. This requires IT systems to be running consistently and efficiently at all times. This translate into operational downtime at both the POS counter and ecommerce engine being kept to an absolute minimum. At some stage retailers will experience a loss of connectivity to their IT systems. The question is how much that time translates into financial and goodwill losses. To minimise this requires a level of expertise consistently on hand to manage the disruptions. Cloud services can provide real-time redundancy via distributed data centres and data backup management and services to manage these disturbances now and into the future at a budgeted expense.

One of the burning questions that business’s have with regards to Cloud is security, is the cloud secure?  In today’s world, Cloud providers have strict processes, controls and governance around key areas such as:

  • Physical & Personnel security
  • System Availability
  • Application Security
  • Privacy

Think of it this way, most people are happy to have all their personal banking information available via the Internet, which is probably stored in a specialized datacentre somewhere in the world. Which is no different than having you business applications available to you via the cloud.  Cloud providers ensure that all your data is secure and only authorised people can access that information utilising data encryption, password control, network security and threat detection systems

Now is the time for retailers to consider whether cloud computing can make a difference in their businesses. It might be the vehicle that empowers them to keep up with customer demands, ease the technology burden, optimise operations, reduce costs and increase overall retail agility.

Happy Retailing!

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