Today's Store Systems are a pivotal part of the supply chain process and provide the life blood for central systems. As the source of critical sales data, they have a direct effect upon the quality of stock control and replenishment.


Not surprisingly, retailers look to Store Systems to improve their performance. However, fear of the impact of change often delays system implementation, invariably to the detriment of the business.

Although the motivation for systems replacement may originate from within IT, it's important that the business engages with the project early on; creating and supporting a business case.

When selecting a system, it's wise to focus firstly on the supplier, then on the system in terms of business fit, finally drilling down to specific functionality and assessing resources required for implementation and operation.

Financing the purchase

Whilst some systems are still going strong after 15 years, build a sensible financial case based on a 5-year shelf life. Select between a 'capex' purchase, renting the system over its expected lifetime, or a usage model where you'll pay more when new stores open and less when they close. Don't be distracted by suppliers' tempting year-end deals which can push you into the wrong choice.

Total cost of ownership

The true cost of system ownership is rarely presented by a supplier and rarely acknowledged by a buyer. Take into account future development costs, the internal support burden, the need for external resources and any forced software and hardware upgrades during the system's lifetime.

Supplier fit

Regular involvement with and dependence upon a supplier mean that cultural fit is very important. Make sure too to understand their strategy for acquisition and market expansion and any implications for future product support.

Support

Store Systems support arrangements are critical. Will your staff be trained to provide 1st-level support? If the more technical 2nd and 3rd levels of support come from outside your business, will this be from your supplier or from a third-party? In short, understand your dependencies and ensure your supplier is capable of keeping you trading.

Business match

Aim for a realistic product match to business requirement, taking into account the number, size, location and trading mix of your stores. Don't ignore the requirements of concessions for different till management and processing to feed data back into your central systems.

Store Systems commonly allow you to customise functionality and this may push you towards the self-assembly approach. This can be appealing, but remember you need a system functioning from day one, not one that is so flexible as to be unworkable.

Pilot

A good pilot does more than prove the right choice has been made and that the system doesn't fall over. It's a mechanism for benchmarking the new system's effects against those of your current set-up.
Set clear success criteria and test capabilities in conditions that mirror business composition. Select the most representative store spread in size and type, covering both solus and concessions. Measure transaction times at the same time of day and in representative circumstances. Concede that the new system may not out-perform the old one in all respects.

Whilst you cannot expect to simply extrapolate from your pilot experience and achieve all benefits until the system is fully operational, use the pilot to test the reasonableness of your business case.

References

Even if your pilot produces outstanding results, take up references. Ensure there's a reasonable match between your businesses in scope and scale and that your supplier proves they've already delivered what they are selling you. Don't focus solely on system operation and try to gain a broad understanding. If possible, talk to store staff as well as to IT staff.

Assess client satisfaction with product, support services and responsiveness to future updates. Customisation is an eventuality to be planned for, so make sure that you'll get a receptive hearing from your supplier and that any work will be priced sensibly.

Resources

As opportunities present themselves or the business requires new information, system functionality will need to be extended. How practical is it to use in-house staff, perhaps without the required skills and with priorities elsewhere? Question whether you have the resources to select, support and develop the system yourself, or whether you need a good systems integration partner.

Implementation

Whilst the acid test of the entire project will be its implementation, many retailers are slow to define their methodology and fail to assess the true cost of implementation until a decision to proceed has been made. Don't let issues of customisation and future developments overshadow the need for an early and thorough appraisal of the cost and impacts of implementation on your business.

At the end of the day, with the right approach and resources, a comprehensive project plan and realistic expectations, you can focus on and enjoy making what may be your most significant technology purchase.