Thought Leadership from Industry Peers

Custom Build or Off-the-shelf Software – What is the future of Technology / IT in Retail

David Callow | 15 December 2016

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The fifth in our series of blogs on what keeps retail CIOs awake at night focuses on the big question of ’out of the box’ or customisation.

The classic question for a Retail IT Director a generation ago was whether to buy or build a retail software solution. Traditional IT departments were structured typically with large development teams who were quite capable of developing large-scale applications as well as modifications to existing systems.

Moving forward to the present and the recent history of apps, out-sourcing, agile methodology, off-shoring and near-shoring and the question has changed more into whether it is better to deploy a ready built solution in ‘vanilla’ flavor, i.e. as it comes out of the box. Or whether it is preferable to take the application in standard form and customise it to meet the particular needs of our business.

You may like this also – How Retail CIO’s will Face up to the Demands of Omni-channel Retailing

This debate indeed can be the cause of many sleepless nights. On the one hand to take on customisations is not something that should be done lightly as the cost of developing them is only the tip of the iceberg. The total cost of ownership across the lifetime of the application will be significantly higher (10x) than the original development cost.

On the other hand, to stick to a standard process could mean that we fail to support the very essence of what makes our business unique and special, doesn’t it?

As ever the CIO needs the “wisdom of Solomon” to be able to plot a course through this potential minefield and broker a deal which suits all stakeholders and fits the budget.

A balancing act as ever is required. The CIO must judge the situation and the characters involved and be nimble on his or her feet to extract the best possible business result. For example, rarely would it be wise to simply ask a set of business users “what do you want?” as the resulting blue sky discussion will probably work against any expectation management that is likely to be required.

The option of influencing the package provider to include additional functionality in the core product may seem unrealistic, and at best, a lengthy process. However, the move towards incremental updates and cloud platforms makes this more feasible. For example, the new version of Microsoft’s Dynamics AX ERP product offers the possibility of implementing updates on the continuous basis. We may never take a mission-critical, corporate platform update in the way that we update an app on our phones today, but the processes of updating these are converging!

The cliché of ‘phase 2’ being shorthand for ‘the stuff that will never get done’ must be challenged, and the CIO and team must actively demonstrate a willingness to provide releases regularly and often, albeit small, incremental releases. This culture of rapid change and active listening to stakeholders will engender a spirit of trust and help to reduce the unrealistic project demands and consequently reduce the need for customisation.

It is likely that some “tough love” will be required to achieve the ultimate aims of timescale, budget and functionality but an open approach with genuinely transformational leadership can get all parties pulling together in the same direction. The very essence of good solution design is to find the compromise position between the two extremes, but with the right leadership example, it is possible to strike the right balance.

David Callow Former CIO - Debenhams

David has worked exclusively in retail throughout his career, from store management at Argos to technical roles at The Burton Group and senior IT roles at Debenhams including operating at CIO level. David has extensive experience in multi-channel, e-commerce and store systems as well as the back of house implementations in Data Warehousing, HR and Finance.

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