The Retailer Autumn Edition 2022

THE RE TA I L ER

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THE BUILD VS BUY DECISION ISN’T ALWAYS CUT AND DRY

Joe Till Sales Director, UK & Nordics OneStock

M any retailers feel in-house. But hidden costs and complexities can turn big ideas into expensive mistakes. confident they can create their own software Manyretailers feel confident theycancreate their own software in-house. But hidden costs and complexities can turn big ideas into expensive mistakes. Thephrase “ifyouwant somethingdoingproperly, do it yourself” has a lot to answer for. There’s been a long-held belief that although off-the shelf software is quicker and easier to deploy, you’ve got to build something bespoke and/or more affordable yourself. This belief is partly true. Investing in third party software is faster than developing something from scratch. However, bespoke technology is not always better – or cheaper – than something ready-made. THE TRUE COST OF BUILDING YOUR OWN TECHNOLOGY One reason retailers decide to build software is the cost of bought-in technology. Major capital expenditure is hard to swallowwhen you’ve got your own IT team on tap. But companies under estimate how much you need to invest in such ambitious projects. True, there are no up-front costs if you have an in-housedevelopment team. But, dotheyhave the skills requiredtobuildanewplatformfromscratch? Andwhat’shappening toyourothersystemsand IT requirementswhile they’reworkingon thebuild? Even with the best intentions, in-house tech ini tiatives can haemorrhage time and money. I’m not surprised that the average large IT project runs 45% over budget. Technical issues and staff changes causetimelines to slipand costs to spiral. Often, retailers end up outsourcing work to get their software built, at a cost of £500+ per day.

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I’ve also seen retailers sink significant sums into software that’s never completedor isn’t up to the job,withOneStockbrought in to replace in-house OMSsystems that couldn’tdeliverwhat theretailer initially required. Another classic mistake is not calculating the total cost of ownership. Maintaining a bespoke platform is a huge commitment - with a hefty price tag attached. Clearly, there are ongoing costs to maintain an off-the-shelf system. But most vendors outline these costs up-front, making them easier to budget. There’s peace of mind in knowing your initial outlay, andwhatyou’ll need tocoverduring your software’s lifetime. Beyond the bottom line, it makes sense to use the talent inyourbusiness forbiggerprojects. But they must deliver something better than off-the shelf alternatives. We all knowretailing is a complexbeast, andyour retail systems need to tame this complexity. I’ve seenthischallengefirst-hand inordermanagement. Retail order management used to be a simple, linear process. Not anymore. As consumers hop across channels, it’s much harder to deliver on their demands. Being able to viewavailable stock in all locations is now the bare minimum. Retailers need to see what stock is saleable, thecost toserve fromeach location, andmany othermoving parts. Features thatwere once ‘nice to have’ like Ship fromStore, arenowessential tokeepupwith thecompetition. We’vemoved intoaneraofdistributed retail order management. We sawthe importanceof anagileordermanage mentplatformduringthepandemic.Well-equipped retailers switchedtoClickandCollectorderswithin hours, leveragingstorestock. Pets at Home did this andcollectionsnowaccount for20%of theirorders. Evennow, conditions can turnonadime. Retailers with a cutting-edge OMS platform can divert distributionchannels ina click.And theycan tailor available fulfilment options based on real-time stock data. COPING WITH COMPLEX CUSTOMER DEMANDS

In-house tech initiatives can haemorrhage time and money. The average large IT project runs 45% over budget.”

Of course, some retailers can build a distributed retail OMS solution in-house. But how long will this take? In the meantime, your competitors buyingoff-the-shelf software are alreadyreaping the benefits. HOWTO CHOOSE BETWEEN BUILD OR BUY The decision to build or buy retail software is far from cut and dry. Your company size, resources, budget and goals will influence your best route forward. The important thing is foryour business to embark on newprojectswith open eyes – and accurate calculations. Many retailers have paid the price for making short-sighted decisions. They’ve ‘made do’ with sub-parsoftware, or increasedspendingwhen IT’s tiedupwith the latest big idea.All becausebuilding technologylookedcheaperand/oreasieronpaper. Equally, some retailers have been burned byven dors promising the earthbut not listening to their needs.When the right partner can customise off the-shelf technologyforyouroperational dynamics. To help you avoid these scenarios, OneStock has released a new guide: Retail OMS: Should You Build or Buy?, available through our website. In seven steps, we’ll guide you to the best outcome for your business.

JOE TILL jtill@onestock-retail.com