To Cloud or not to Cloud!
AlfaPeople |
May 19, 2016

To Cloud or not to Cloud!

Cloud or not cloud – Hamlet had to make a choice, translated it means “Is it better to live or to die?”.
We all have to make choices, to act or to remain as we are. Is the solution you rely on going to determine your future? If you asked that question 10 years ago, not so much, but today the one with the most knowledge about their customer’s win.

Retailers are faced with a decision whether to the jump to the cloud or stay on premise, to maintain their existing solutions or invest in new.

What is the Cloud? It is a common question among many retailers. Do I trust my data to be somewhere I don’t know about or do I want them on my server with all the risk that entails?

The cloud providers are not small companies with old technology. Today’s Cloud hosting providers are some of the largest technology companies in the world, trusted by the largest companies in the world and government organizations such as NSA, CIA, FBI and many others. There are many questions that a retailer has to decide on, when they look at current and future challenges.

Today, store registers span from cigar box types to tablets with credit card readers and scanner built-in. What should you, as a retailer choose?

By definition, most retailers are comfortable with their existing POS (Point Of Sale) infrastructure and do not want to rock the boat.  The cost of replacing hardware in the stores scares many retailers from upgrading their POS retail solutions as the demands for new software often require new hardware.  “If it works, don’t change it” is reasonable when it makes sense.

Not keeping up with the Jones’, does it matter?

Can a retailer survive without investing in new technology and just maintain the existing systems? Obviously it is possible, but is it the right choice? How much is spent on maintaining old systems compared to a monthly subscription based fee for a brand new, more efficient system. More difficult to measure is how much business is lost?

The newly introduction of EMV and the transfer of liability for credit card fraud to the retailer, unless they have Chip and Signature, also adds to the need to review the existing solutions and infrastructure. The risk of not being PCI compliant can be moved outside the retailer with modern technology. New solutions reduce risk!

A great advantage of new technology, in both solutions and hardware, is that it can exponentially increase the knowledge you have of your Customers. The ability to match hard sales number with loyalty information, as well as match this to what is happening on social media is the future for retailers. They can gain a much deeper insight in the behavior of their customers which is a must for any successful sales & marketing effort. New solutions require more computing power with more resources than what most retailers are willing to invest in for an in-house solution. For these retailers, the cloud offers more or less unlimited horsepower and algorithms to crank the numbers. This is the only way to utilize the power, without investing heavily in hardware. By utilizing cloud-based solutions, a midsize retailer can gain access to powerful solutions that previously have been available only for the largest retailers. Not any longer!

Real-time data drives decisions

The ability to have relevant data at your finger tips, in an easy to absorb manner can change the business. The days of wading through report after report to understand the business and where to focus is firmly in the past. The modern manager has a Business Intelligence (BI) dashboard with live feed from their cloud-based systems that materializes in relevant metrics. When internal financial data are combined with other external sources like social media, weather for planning, demographics, etc., a different picture of the business will open up.   Cloud-based solutions provide comprehensive data sources that can easily be combined for reporting dashboards.

What is the offset?

By staying with the existing infrastructure and retail solutions, many retailers are saving on capital investments but are compromising with stand-alone solutions that are not integrated and require multiple sets of master data to be synchronized and stored in each solution. The cost of interfacing and maintaining these interfaces with the risk of having “Multiple versions of the Truth” are hidden in the operational costs. The lack of knowledge relative to why your business is not as successful as expected will often prevent management from making the right decisions.

The other argument against cloud-based POS and Store solutions are the dependency on constant internet availability. However, most retailers have excellent reliability with their internet provide, and, most modern POS solutions have the ability to switch to an off-line mode where sales still can be processed and important data collected.

Subscription based software for retailers

Few other industries are better suited for a seasonal-based IT solution. With the high peaks during the Holiday season, retailers often find themselves with too many POS stations outside the busy season and not enough when the customers are lining up. Understand your business and the need for lanes, line busting and separate packing stations. If a store has a need for fewer registers on average outside peak seasons but many more registers on Black Friday, then consider supplementing with tablet computers for POS and packing / payment stations.  This can drive customer satisfaction up and total capital cost down. The registers and packing stations can be mobile and be removed outside of peak seasons which adds more square feet for selling space.

With a cloud-based subscription solution, retailers can increase or decrease the number of lanes they are using by month, hence reducing the cost and aligning cost to revenue. A winning solution.

Why The Cloud?

As mentioned in the above, there are many factors that support cloud-based solutions. The initial capital cost will be reduced and cost will match better with revenue. The ability to combine in-house sales data with external data sources and cloud-based BI tools will powerfully increase the capability to analyze and predict store performance.

Read more about Microsoft Dynamics 365 here.

If you want to hear more about how AlfaPeople can help with the implementation of new Microsoft business technology, contact us here.