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IT as an Enabler for Retail Industry

By Armin Roeseler, CIO and Managing Partner, Fortacs Group, LLC

Armin Roeseler, CIO and Managing Partner, Fortacs Group, LLC

In retail environments, IT became a critical business enabler no later than the moment when companies started to migrate from traditional brick and mortar business models to e-commerce and online solutions. In addition, increasing globalization including global procurement, fulfillment, go-to-market and customer acquisition strategies also affect all aspects of retail businesses that IT needs to address. Today, many businesses have responded to the new opportunities and challenges by transforming themselves into fully digital enterprises with profound implications for the IT function.           

"New infrastructure provisioning and cloud hosting models like AWS and Azure have dramatically changed existing technology environments in retail businesses"

Naturally, IT spend has also increased during the initial wave of enterprise-wide digital transformations. New infrastructure provisioning and cloud hosting models like AWS and Azure have dramatically changed existing technology environments in retail businesses, and provide new levels of infrastructure flexibility and on-demand scalability to enable seamless global reach. Cloud hosting models also provide economies of scale that help offset some of the increased IT costs and enable new pay-as-you-go approaches. For example, IT infrastructure and support services can now be “rented” by the hour to accommodate cyclical periods of peak loads. A business that does not leverage cloud environments today might find it difficult to respond rapidly and flexibly to changing marketplace demands and thus could find itself at a competitive disadvantage.

If IT is the business, the website is the new retail store front. Requirements regarding site performance, reliability, scalability, and flexibility, etc., provide new challenges for IT organizations. Often, the element of “speed” or a first-to-market requirement is overlaid as a master requirement to help ensure promotions, marketing strategies, and product and service offerings can be adjusted quickly to reflect changes in a fluid marketplace. Again, a cloud hosting environment can be a critical enabler to accommodate these demands.

Over the years, identifying the “right” cloud solution, including hosting providers, delivery models (e.g., private, public, hybrid) and supporting third-party technology providers has become easier and more manageable as toolsets matured and service offerings became standardized. When I started working on leveraging cloud technologies many years ago, I opted for a “cloud broker” model for my first full cloud implementation. The cloud broker provided migration assistance, virtualized applications where feasible, and managed all third-party relationships. The advantage at the time was, that the cloud broker was prepared to customize the private cloud hosting environment I required, and accommodated the specific security, connectivity and other unique needs of the technology stack and applications portfolio in ways “off-the-shelf” cloud providers could not. Especially when legacy applications require support, enterprises do not want to re-architect the applications stack to make it cloud compatible before they re-host. In addition, legacy infrastructure components may not be supported at all by a “traditional” cloud hosting provider, and a customized approach via a cloud broker who can address and accommodate unique requirements may be called for. If applications follow modern development paradigms and run on commodity hardware, it is much easier to provide scalable cloud solutions and third-party auxiliary tools for performance monitoring, configuration management, security and other management functions.

To be an effective business partner today, IT leaders, more than ever, need to understand where the business is going. They need to be able to translate business strategies, goals and objectives into the technology domain and then provide enabling solutions that help solve business problems or capitalize on opportunities. Over the past decade or so, the classic role of the CIO has changed dramatically. Earlier CIO’s were most often pure infrastructure providers, and they provided and managed the run-time environments that hosted the corporate business applications. But the contemporary CIO is a person who most likely has at least part of the infrastructure already hosted in a cloud environment, and hardware and software services may or may not be under his or her direct control. In my own experience, once I have migrated IT environments to a cloud environment and provisioning of additional server capacity, storage or networking resources is just a phone call away, I then can spend most of my time with business stakeholders to understand the issues and opportunities of the company. This permits me to create targeted solutions by leveraging new and enabling technologies to help the business accomplish its goals.

As technologists, we probably have never had so much opportunity to fundamentally impact or influence business outcomes, and this is a perfect time for the thoughtful and deliberate deployment of enabling technologies to help create competitive advantage. The next big wave is the hyper-personalization of services, products, and customer interaction models based on machine learning and artificial intelligence (AI). In future, the way we interact with technology will be seamless, transparent and based on our individual preferences and likes. Technology based on machine learning algorithms will make for more personalized interactions. This trend will continue to evolve, and it will give retail businesses additional opportunities for revenue growth and differentiation.