The question of whether to invest in omnichannel retail solutions has transformed in recent years - organizations are no longer asking if they should investigate ominchannel and are instead investigating how to do it effectively. Retailers face a number of challenges on the road to success in the omnichannel arena, but one pervasive issue is the role of technology in such an environment. Most business leaders recognize that IT plays a key role within the organization. The only problem is that they are not always able to identify the precise ways that their IT assets fit into an overall business strategy.
Limited budgets, lack of alignment
The omnichannel world is all about integration in the sense that companies need to be able to connect to their partners as well as their customers. However, the downfall of these efforts often comes down to a lack of integration between internal IT and business teams.
As with many business challenges, one of the core problems is the budget technology teams have at their disposal. According to EKN Research, CIOs spend around 58 percent of their financial resources on maintaining current systems.
This problem may persist because of a disconnect between technology and business teams. Another EKN survey found that nearly half of CIOs report to the CFO, whereas CMOs more often report to the CEO. This suggests that businesses judge IT success more heavily on cost reduction than on the ability to innovate. Of course, it is important to keep costs in check, but an overemphasis on this area will leave businesses at a competitive disadvantage.
Barb Darrow explored the issue of technology cost as it relates to cloud computing solutions in a 2013 GigaOM article. She noted a significant shift away from cost reduction as the core benefit for migrating to cloud environments.
"But over the last year, the discussion has morphed more into how cloud offers companies flexibility and agility, and there's growing realization that for stable, non-variable workloads, cloud - even public cloud - may not be the cheapest option at all. But that flexibility for intermittent or variable workloads remains the public cloud's siren call," Darrow wrote.
The same evolution needs to happen for technology investments in general. Rather than focus on how IT can reduce cost, businesses benefit most from exploring how IT can add value to overall business strategy - this is especially pertinent for omnichannel retail due to the central role that technology plays in facilitating these initiatives. For instance, success requires a high degree of data integrity. Companies that prioritize cost over centralized data management and other factors are likely to run into large roadblocks such as time-consuming processes and inaccurate data. A better approach would be to first identify the core business problems that are impeding an omnichannel approach. The next step would be to form an IT strategy that helps to solve those issues, which will inform investment decisions. Decision-makers will likely find that the best solution is not the cheapest one, but by first taking a look at their essential needs, they can identify the solutions that provide the most value at particular price points.
What omnichannel really means: Seamless experiences
There are many back-end processes that go into omnichannel, but it is essential to keep the end goal in mind. Regardless of how many new processes or transformations emerge, the focus for ominchannel retailers must be on providing a seamless experience for the customer.
"[R]etailers must be prepared for the customer who wants to scan a barcode in the aisle, ask the merchant to ship it to his/her house, and then walk out of the store," Matthew Bar, head of market development at MasterCard Worldwide, wrote for Computerworld New Zealand. "They must also understand shopper behavior and find out what drives their customers during their shopping experience – from start to finish and across channels - to better engage them, enhance the customer experience and increase brand loyalty."
It is also important to remember that the customer experience extends beyond when someone makes a purchase. Even a company with excellent visibility into its supply chain and order management solutions would lose revenue if customer service representatives did not have adequate data to address someone's needs. For example, customers that report a faulty product and ask for a replacement may not identify the size or color of the original item in a support email, but they will expect the business to send the exact item they originally bought in perfect condition. Without full integration of order management, supply chain and CRM systems, it is much easier to make mistakes in the processes that follow a purchase.
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