Building an Agile Retail Organization

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Building an Agile Retail Organization

By Aashish Chandra, global head of technology, retail, CPG & TTH at Tata Consulting Services. - 08/23/2016

Increasing mergers and acquisitions, the presence of disparate systems and standards, and the need to support fast paced change has increased the level of complexity in retailers’ IT landscapes. In addition, most established retailers have their core business systems running on monolithic legacy environments that are inflexible and expensive. As a result, merchants are struggling with a highly heterogeneous and complex IT environment comprising different technologies, platforms and infrastructure. This complexity is, in turn, adversely impacting their ability to scale up and become future-ready. With digital forces revolutionizing business models and creating new opportunities, enterprises with legacy environments are seeing a gap in their ability to deliver on business needs. This delivery gap will only worsen in proportion to the change the retail industry is expected to undergo unless the legacy architectures, infrastructure, processes, and UI/UX are modernized by undertaking a simplification program.
Lets take a look at the key components of a simplification program that can lay the foundation for a robust digital enterprise:

Architectural and a holistic approach to simplification
When faced with the limitations of their legacy systems, retailers typically devise workarounds and patches that create incompatibilities among discrete layers of the technology stack as well as applications within a layer. Furthermore, in a legacy environment, these layers are tightly integrated. Complexity in current IT environments therefore exist within the entire technology stack and its processes. This makes it imperative for retailers to approach simplification holistically and architecturally to redesign the technology landscape and its processes.

Application portfolio rationalization and modernization
Savvy retailers are rationalizing their application portfolio to modernize core business systems. The application architecture should include responsive front-end, micro-services based digital architecture, and reusable APIs for web, mobile and service providers. The modernization effort should be complemented with the adoption of cloud and open source to integrate omnichannel seamlessly and provide a rich experience.

Cloud enablement
Infrastructure efficacy should be evaluated alongside applications in terms of cost, utilization, performance, availability and alignment. Adopting virtualization and grid computing, optimizing storage and migrating to hybrid cloud models can achieve performance improvements and significant cost savings.

Creating a unified data architecture
Retailers with foresight make data-driven business decisions to stay ahead of the competition. That involves capturing structured and semi-structured data from various sources to arrive at real-time decisions. Developing an enterprise (big) data strategy is crucial to simplification efforts and should focus on a unified data architecture for simpler and more futuristic enterprise information management.

Simplifying Processes
The simplified technology architecture needs to be supported by IT processes and practices that enable agility. Evaluating IT processes helps identify opportunities for agile engineering practices such as continuous integration or delivery, prototyping, reusable components or APIs, and DevOps, among others such as adoption of automation-as-a-culture and innovation-as-a-culture that can significantly accelerate IT delivery capabilities.

The importance of an omnichannel setup has never been greater. Retailers need to cater to the growing number of Millennials and Generation Z consumers (the first completely mobile generation in the marketplace) and thus serve an omnichannel customer. Simplification of the IT landscape is key to becoming nimble regardless of size and competing with newer online competitors who are not shackled by a legacy IT environment.