Four Ways Cloud Services Unleash Business Agility for Retailers
By Jeff Warren
The ever-accelerating pace of change in retail puts pressure on everyone within the retail enterprise, but perhaps no one feels it more acutely than the CIO. Technology is rapidly reshaping key elements of the traditional shopping experience, from m-commerce and mobile payments to store-based fulfillment. It’s increasingly common that when an IT organization can’t supply new functionality the business side seeks, it’s not a lack of funds or expertise that stands in the way. It’s a simple lack of time. IT departments are tasked with discovering, and bringing on line, these fast-emerging functionalities, while at the same time maintaining the existing architectures that support both basic corporate and retail-specific systems.
Given these competing demands – “keeping the lights on” while simultaneously serving as the engine for business agility – retail CIOs are steadily moving selected business processes such as e-commerce management, order management, loss prevention and brand compliance to cloud-based applications offered by trusted partners. This transition has been underway for quite some time and is gaining momentum as businesses seek greater flexibility and speed to market. Cloud deployments free up IT resources for more strategic projects, and they also allow technology vendors to deliver innovation to retail users more quickly and with more frequent updates. In short, by outsourcing many elements of IT management, maintenance, and upgrades, cloud services help to address retailers’ hunger for business agility.
1. Keeping Costs in Check
The other benefits of cloud-based applications have been well documented, and are part of the reason so many businesses and individuals have been embracing cloud-based applications, data storage, and processing. They include:
● Lower initial hardware and software costs
● Lower ongoing costs, leading to a lower TCO (Total Cost of Ownership)
● Faster deployments and streamlined routes for patches and system upgrades
Other cloud features are particularly well suited to a retail environment. Scalability and easy access to additional processing power on an as-needed basis fits the needs of a highly seasonal business, one that must often deal with unexpected spikes (such as when a retailer seeks to promote a suddenly “hot” product).
Subscription-based pricing models can help retailers maximize this benefit by bundling software, hardware, and upgrades into a predictable cost structure. In addition, by pricing IT services like a utility, retailers only pay for the processing power they require and actually use.
2. Mitigating Risk, Maximizing Security
Many retailers have hesitated with cloud deployments based on concerns about data security and overall reliability. This is understandable, given that retail data breaches are highly visible and can tarnish both individual companies and the entire industry. The ability to protect data and maintain the trust of their customers necessarily remains top-of-mind for retailers.
With these applications, retailers can benefit from large-scale, well-equipped and sophisticated data center operations. Leading offerings classified as Tier 4, the highest level of sophistication, provide 99.995% of uptime. This translates to less than 30 minutes of downtime during an entire calendar year – performance that very few (if any) retailers could match. Retailers using well established service providers also gain access to staff with top-notch expertise in the cloud, security, and networking.
Security features retailers should look for are transparent data encryption at the column level, allowing PII (Personally Identifiable Information) to be encrypted using keys that are held in a separate “wallet.” Backups should be automatically encrypted, and keys easily changed on an as-needed basis. Cloud services providers should also leverage identity management solutions to enforce authentication and authorization for applications, and all elements should be PCI-DSS certified.
3. Gaining Interoperability and Choice
Retailers will also benefit from cloud services that are part of a comprehensive commerce strategy encompassing everything from financial applications to system hardware, which can help maximize interoperability with both on-premise and cloud-based systems.
Because different retailers are at different points in the adoption curve, starting with a discrete cloud service for a very specific business process allows executives to get more comfortable with the concept of outsourcing elements of their IT infrastructure. As cloud solutions provide “wins” and the culture adapts, the adoption path can ultimately lead to broader, integrated cloud offerings that solve the most critical business challenges facing retailers today. Cloud services give retailers choices, allowing them to get what they need depending on where they are in terms of their size, operational stability and business needs.
4. Speeding Innovation
Most importantly, cloud services give CIOs the tools to keep up with today’s dizzying speed of change. Retailers can no longer wait one to two years to implement the next big thing; IT departments need to deliver meaningful value to the business in time frames that are measured in months. By outsourcing key day-to-day operational duties to cloud providers, IT departments are better able to offer higher levels of strategic innovation and business agility.
Cloud services now offer retailers industry-specific solutions along with higher performance and security standards. As the industry takes advantage of this model for sustaining key retail processes, companies will lighten their IT burden and shift focus to those programs and technologies that truly differentiate their brand and customer offering.
Jeff Warren is VP of retail strategy and solutions management, Oracle.