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For the longest time retailers did not have to view technology as much more than a cost to be controlled. Yes, it helped with finance and accounting, and eventually made it easy to keep track of inventory and sales, but IT was not core to the retail business.
Of the many things that have changed in retail, technology’s role in the business is one that has changed the most. It has gone from a cost to be controlled to a primary enabler of a retailer’s ability to sell, which increasingly puts technology at the heart of the customer experience. E-commerce, mobile apps, personalization – all of these are technologies that, in their absence, retailers increasingly wouldn’t be able to do business at all.
However, business leaders’ understanding of these technologies – what they’re capable of, how they deliver what they do – has not really increased as tech capabilities have grown. I’ve seen it many times: a “talk to the hand” moment of “Yeah, I get that you want to talk bits and bytes, but I don’t really care about that stuff. Talk to the IT guy.”
The net result of this attitude is pressure on technology vendors, influencers, even “the IT guy” to cast technology purely in business terms. The problem is that a lot of the value of technology is in how it’s deployed. And for a few decades now, business leaders have had more control over technology budget than ever before, and when faced with the low-cost version of deployment vs. the higher-cost-but-better architecture option, business leaders have pretty consistently opted for expediency and low cost.
It’s not helped by the fact that it’s increasingly difficult to explain technology purely in business terms. If all you used were business terms, you could make any technology sound like any other technology – oh, it reduces cost of ownership, it enables flexibility and speed to market, it lets you better align your technology to your business. But without the “how” beneath that, business leaders will (understandably so) dismiss these benefits, since they all sound alike, and go with whatever most expediently delivers the most short-term value.
And thus, retail technology is loaded with technical debt, because the people paying for IT didn’t want to know or care about how the technology works. Too many retailers are still backed into a corner because of their low-budget approaches to IT that did not acknowledge all of the costs.
Backed Into A Corner
One place this is becoming painfully evident is in point of sale solutions (POS). Windows 7, the operating system that runs way too many registers in stores – even today – is being discontinued entirely in January 2020. For the record, it’s been “sunsetted” since 2015, but Microsoft will end even minimal security patches and support next year. Retailers who thought they were saving money by not upgrading in the past are now finding themselves stuck with an enormous amount of technical debt coming due. It’s a cascade: in order to update the OS, the hardware needs to be upgraded because the hardware they have won’t run Windows 10. And then also the POS software, because what they’re running on Windows 7 hasn’t been upgraded in years. And then all of the integrations and customizations made to that software over the years will need to be converted.
Basically, all of the “running the business” things that the retailer should’ve been doing around POS but did not – because, in part, retail business leaders didn’t care about that and didn’t want to spend the money – will now have to be paid for all at once, at a time when what the business really wants to invest in is omnichannel selling, or international expansion.
It’s time for retail business leaders to care about technology. Tech is a tool of the trade now, like it or not. If you don’t understand how your personalization solution works, how are you going to best take advantage of what it has to offer? How are you going to make sure that it’s working the way you intended (and perhaps is not unintentionally discriminating against some customers)? Artificial intelligence only makes these risks larger and more immediate.
Business leaders who wish to remain ignorant of how technology can deliver value risk irrelevancy, as the business is increasingly dominated by technology as the primary means of execution. Product and store design deliver an experience, but it’s the data you get from how customers interact with those experiences that drive future business opportunities. Ignoring the technology ignores how that data is generated, captured, and used. In today’s retail, that’s like opting to work without using your hands.
The Bottom Line
You don’t have to be a developer to understand technology – my own career has been defined more by avoiding learning to program than otherwise, and that knowledge gap has only very rarely been an issue when it comes to understanding technology. I don’t have to be able to write neural net algorithms in order to understand what AI can do and what its limitations are.
Business leaders should not be afraid of technology, nor should they be ignorant of it. “Digital transformation” is about transforming the business to be digital – some basic understanding of what digital means to your business is kind of a base expectation. But equally, the tech industry has a responsibility here too – to make sure that our solutions can be understood by people who don’t already love technology, and to ensure that we do our best to help business leaders see when they are making decisions that will put them right back into their technical debt corner. Too often, tech vendors are enablers of retailers in that regard. And in the end, that serves no one’s purpose.
Consumers’ digital lives are now far more important to retailers than their physical activities, at least when it comes to understanding intent and how to best serve them. To remain ignorant of how all that works is to risk becoming a dinosaur – and that applies both to business leaders, and the businesses they run.