Derek Britton, Senior Solution Marketing Manager, Micro Focus.
For the retail industry, the rise of mobile is one of the biggest challenges it has faced for some years. While the development of e-commerce has already considerably tested the business models of many traditional retailers, the use of smartphones to search, compare and buy goods online has taken this one step further. Users are now visiting e-commerce sites and comparing and buying goods on the move as well as using their mobile devices as wallets to pay for goods, both in store and online. IDC predicts that global downloads of mobile apps will reach 76.9 billion by 2014. Retail CIOs face the stark choice of either adapting their systems accordingly, or running the risk of losing out to their competitors.
For retailers in particular, where tight operating margins make sales volume and market share paramount, the technological demands placed on the mainframe have considerably increased over the years and IT departments have had to cope with the rise of e-tailing as well as now smartphone purchases. As a result, the business applications have had to grow and evolve to meet shifting commercial, operational and economic challenges all while trying to limit costs.
With all enterprise expenditure under scrutiny in a challenging economic environment, the focus is shifting for many organisations to modernise rather than replacing IT infrastructure. When combined with the need to meet the technological demands that mobile requires, IT departments need to get smart with their application portfolios.
As IT systems have grown to meet growing business needs, they have become fragmented, as the IT department work in silos to addressing different demands of the business. The constant state of reaction means there has been little thought given to an overall strategy for which the retailer's IT teams need to work toward.
For example, it is still not uncommon to find large retailers which offer in-store order placement, and ordering via mobile or online, to have two separate systems and applications for each. Not only that, the two may not work with each other, meaning orders placed in store cannot be tracked in the way online orders are. Working this way means retailers run the risk of leaving customers confused and dissatisfied with the lack of consistency of service.
For retailers with a quickly evolving marketplace and increasing competition, legacy IT systems that may have come about from mergers or acquisitions mean that for many businesses adapting to commercial challenges and customer demand quickly is difficult. Retailers typically also have systems that sit across mainframe, distributed and now even cloud environments.
The end result is that CIOs are facing IT infrastructures that look more like a spider's web of applications than a streamlined and coordinated system, the only constant is the growing opaqueness of the web.
The increasing complexity of IT infrastructures therefore requires careful management. For CIOs to have the ability to address the multiple challenges and channels that confront them within the retail industry, a clear overview of the existing IT infrastructure and future business needs is required.
The first step to this is getting a clear overview and understanding of the enterprise applications. Any IT modernisation project needs a firm basis for decision making and a strategy to simplify the growing complexity of expanding application portfolios. With an Application Portfolio Management (APM) system, IT decision makers can examine the IT infrastructure on a regular basis to assess costs, value, complexity, risk, customer satisfaction, fitness for purpose and other key metrics.
Being able to assess costs against value of each application means that IT decision makers are able to identify how much existing systems, or outgoing systems, return. This in turn allows CIOs to make informed decisions on which applications to maintain and which to retire, thereby making space for new applications such as mobile to be developed. However, understanding the levels of detail required can be a slow and laborious task when done manually and may be prone to human error as well as becoming a costly process. By using an automated Application Portfolio Management (APM) system, IT directors are able to interrogate IT systems and pull, store and assess information instantaneously. By doing this, CIOs are able to prioritise which applications should be modernised and identify applications that may be able to be re-used, in this example, for mobile.
With the retail industry struggling to stay afloat in the present economy, an ability to innovate and meet the growing expectations of consumers will be vital to retain a competitive edge and compete in a globalised and 24/7 market. Therefore an agile and efficient IT infrastructure that is able to cope with present day demands of mobile and online remains an important focus as well as a challenge for retailers. Therefore, having the ability to instantaneously assess the application portfolio could offer the edge retailers need to be able to innovate and adapt in the retail marketplace.