Coming Of Age Of Retailing Systems

 Coming Of Age Of Retailing SystemsRetailers have been using technology in order to streamline their processes for many years now, and with the availability of technologies such as BI, ERP, which boast of analytical capabilities, they’ve just about started to explore the real benefits of technology in retail. Today, retailers can also take advantage of the Association of Retail Technology Standards (ARTS), which guides them in selecting the right technology. ARTS uses a set of standards to prepare detailed information for retailers to consider before they go out to make a technology purchase.

However, about 30 years back, one had to courier data tapes from the sales office to the registered office, in order to track something as simple as inventory. What was it like transferring these tapes, and working with these massive time delays, and how different is it now?

Biztech 2.0 spoke to Richard Mader, executive director, ARTS, to get a better insight into topics ranging from mainframe computing in the 70s to the use of SOA in today’s enterprise.

Could you give us a brief history of time, with respect to technology use in retail?

Specific to my experience in retail, the very first back office process that retailers wanted to capture was managing inventory. Back in the 70s this was done using mainframes. Although there was processing power, it would still take about a week for any kind of information updates. Data tapes at the time were couriered to the retailer, and only then there was information regarding what kind of inventory figures one was looking at. However, now things have changed.

Over the years, one can say that we’ve transitioned from batch inventory (accuracy of 10%-20%) to real time processing of inventory. Now, a retailer has the capability of knowing if a certain product is falling short in real time, and this gives him the ability to prepare in order to restock effectively. Retailers have now successfully ensured that they have the right merchandise for the customer when they enter the store.

What according to you, has been the best technological innovation in retail?

Bar coding was one of the best things to happen to retail, and to me in my thirty years of IT. It reduced the error rate from 10%-20% to 1%-2%, which is quite a considerable difference. Bar codes enabled retailers to know at any point, if they were running short on products, so that they could always have the right products at the right time. Bar codes are still in use today however, with the advent of technologies of RFID, this is subject to change.

How well is RFID doing as a technology, and what are your views on upcoming technologies such as SOA?

RFID at this point in time works out on a large scale. Consider WALMART, they went and got RFID because it works for them. They’re one of the largest retailers that you see around, but that doesn’t mean every one has to do what they’re doing. Although the technology is gaining momentum, TCO on such a technology isn’t limited to the technology itself. It extends to the various technologies that need to be additionally purchased to support the technology itself. I don’t see it being actively deployed for about 5-10 years.

SOA is another interesting philosophy. Retail is always subject to change, as it reacts with customers. Now, if I’m using a SOA, creating a new department is as easy as calling a function. It enables disparate systems to work together easily, and it gives technologists a lot of flexibility.

Do you have any advice for Indian CIOs?

What I’m noticing these days is a misalignment between business units and technology units. The alignment of these two entities is imperative, in order to achieve smooth sailing. Business units must realign themselves with IT in order to gain true competitive advantage.

Secondly, studying outside retailers, will allow Indian retailers to observe how these companies tick, and last but definitely not the least, retailers should also look to hire outside help in order to innovate with processes, and in general keep tabs on the latest technology trends.

Mader believes that Indian retailers are in a unique position to take advantage of global expertise, experience and best practices. He believes that with the availability of these opportunities, Indian retail will go very far.

Updated Date: Jul 29, 2007 18:27:51 IST