Everyone understands that for a retailer to be competitive, it must invest in the best technology to remove friction for customers and employees, provide the agility and capability to take advantage of big events such as Black Friday, improve operational efficiencies, and build long-term customer loyalty. However, many retailers have discovered that a technology solution decision is far more complex than it would seem and, instead, they should be investing in self-enablement.
To guide retailers on this journey, redPanda Solutions has developed a white paper, A better future for South African retailers: self-enablement, to highlight the unique challenges faced by local retail businesses, and what steps they can take to overcome them.
Consider this: a retailer in a city hub, complete with its own power backup and fast connectivity, can deploy a fully cloud-based solution. This is not much unlike the markets that international vendors understand. However, we are speaking about our unique South African context. RedPanda Solutions can say unequivocally that you do not want a cookie-cutter approach that says: “I can do the same thing everywhere.”
A retailer outside of the major city regions, with smaller stores in some of the remoter areas, needs the flexibility to work in the cloud and have in-store servers. They need full redundancy to deal with connectivity and power challenges. Retail is unforgiving – an inability to trade can close doors.
A loss of skills
Unfortunately, when a retailer invests in a new software vendor, there is often an acknowledgement that they are going to lose a significant number of staff because they need to be replaced with new skills to deal with new technologies. Essentially, the retailer needs to move a substantial portion of the services to the vendor, who is that technology stack expert. This gives rise to software-as-a-service (SaaS) environments and, in many cases, the loss of valuable skills and IP within a retailer. This causes a cascade of problems later, when there is no one in the organisation who knows why something was configured a certain way … until it’s too late.
This is not to say SaaS is not the right solution – in many cases it absolutely is. However, it depends on how the SaaS solution is designed and run. When a retailer finds itself in a situation where it no longer retains valuable IP, it loses the ability to do what it once could. If processes fail, no one can remember why something was done in a specific way. There most likely is a very good reason things are as they are — but because the IP is gone, no one can answer why.
Let’s look at the alternative. A retailer that retains its critical skills and vital institutional knowledge ensures continuity, productivity and the ability to make informed decisions. This helps prevent knowledge gaps, process inefficiencies and an increased reliance on external vendors, which can ultimately undermine a retailer’s competitiveness.
By establishing centres of excellence or competency hubs, internal teams can develop deep expertise in core systems and processes, allowing them to troubleshoot issues, optimise performance and drive continuous improvement.
Effective IP management also protects the organisation’s unique competitive advantages, prevents vendor lock-in and ensures the long-term viability of the technology ecosystem. It ensures skills retention, business continuity, supports customer satisfaction and boosts employee morale – and, importantly, it protects the employer’s reputation.
Vendor lock-in
On the other hand, many retailers in South Africa are dependent on international vendors. Relying on international vendors to provide critical technology solutions and support can further compound many uniquely South African challenges that retailers face.
Unfavourable vendor dependencies can lead to significant business continuity issues, revenue losses, customer dissatisfaction and reputational damage, especially during high-volume periods such as Black Friday.
However, switching vendors when not self-enabled can turn into a costly affair that, in turn, locks organisations into suboptimal relationships.
The case for self-enablement
A retailer is self-enabled when it can take control of its technology ecosystem, reducing its reliance on external vendors. Retailers can achieve this by working with a self-enablement partner on a few, key strategies.
They should adopt open, modular architectures and develop in-house expertise and maintain control over core systems and processes. A good self-enablement partner will help them negotiate vendor contracts that protect against excessive termination fees, price escalations and other lock-in mechanisms. Importantly, they will be advised to diversify their vendor relationships, which allows for flexibility to transition to alternative providers without significant disruption to the organisation.
A self-enablement partner will ensure that retailers continuously invest in upskilling and retaining internal teams. This ensures the organisation has the necessary expertise in-house to manage the technology ecosystem and any future transitions. This, by design, reduces a retailer’s reliance on external support.
In other words, the business maintains control over its technology stack.
Self-enablement, then, protects retailers from both suboptimal dependencies and the high switching costs and disruptions associated with switching between vendors. The net effect of this is a retailer that’s able to take advantage of the rapid advancements in retail technology more effectively and efficiently.
These include advancements in areas such as cloud computing, edge computing, artificial intelligence and the internet of things. The result is improved agility, scalability and innovation as retailers adapt to changing customer behaviour, demands and market conditions.
Partnering with redPanda Software allows your retail business to leverage our extensive industry experience coupled with technical expertise to guide you on the journey toward true self-enablement. Download our white paper, A better future for South African retailers: self-enablement, to find out how you can maintain control of your technology ecosystem.
- The author, Peter Ludi, is business development executive at redPanda Solutions
- Read more articles by RedPanda on TechCentral
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