How Deployment as a Service Manages Retail Complexity
Retail has always been a complicated business, with thousands of SKUs to track from the supply chain to the customer, stock management, seasonality, and promotions. Payment networks added another layer of technological complexity, and today retailers must stay current with omnichannel integration, sales floor wireless networks, beacons, mobile checkout and much more.
Of course, complexity carries several flavors of risk:
- Execution risk: Poor planning results in subpar system performance, device incompatibility and application issues. More often than not, these outcomes impair the customer experience as well.
- Cost risk: Implementation delays, inadequate training and product obsolescence can also depress return on investment and discourage further innovation.
- Reputational risk: Security breaches and negative customer experiences can jeopardize loyalty and affect market share.
That said, the benefits of deploying appropriate technology to enhance the brick-and-mortar experience, compete more effectively and drive new revenue far outweigh any risks. However, installing this technology is just the first step; monitoring and managing it over time is another, and perhaps more impactful, success factor.
How can a retailer harvest technology’s upside while still controlling operational complexity and risk?
From Managed Services to DaaS
One potential path to consider is a managed-services approach, which separates strategic corporate direction from sales floor-level implementation and ongoing, everyday operations. By now, most retailers are familiar with the concept of transferring some IT operations and applications to a cloud provider on a subscription basis. Often referred to Software as a Service (SaaS), this can reduce infrastructure expenditures, tighten security and control labor costs.
Deployment as a Service (DaaS) is a logical application of this concept to physical devices and wireless networks. The retailer contracts with a partner which brings industry field experience, broad product knowledge and trained personnel who can cover the retailer’s market area. In exchange for a negotiated monthly or annual fee, the retailer:
- Shifts much of the risk to the partner: SLAs (service-level agreements) specify performance and uptime.
- Obtains informed product guidance: This is particularly true when the partner is vendor-agnostic, selected devices and platforms will be both compatible and reliable because the partner has a vested interest in trouble-free operation.
- Smooths budgeting: By converting capital expenses to operating dollars, DaaS replaces CapEx spikes with predictable spending. (In some cases, the retailer owns the assets; in others, the DaaS provider leases them.)
- Shares in industry best practices and standards: Instead of reinventing the wheel with each do-it-yourself initiative, retailers benefit from the partner’s deep experience and insights across store formats and geographies to optimize implementation.
- Frees up IT resources: Deployment and ongoing management can be a “down in the weeds” task, where IT participation is costly overkill. With DaaS in place, IT can focus its strengths on strategic initiatives, analytics and other essential competencies.
- Gains on-demand capacity: Retailers can scale up and down as needed for deployment rollouts without investing in permanent staffing resources or replacement product stocking.
- Enjoys a single point of contact: With a single DaaS partner installing, upgrading and monitoring store networks and devices, the retailer has immediate visibility into operational issues.
With a trusted DaaS partnership in place and technology complexity under control, executives can focus on retail’s fundamentals — getting the right product at the right price to the right customer at the right location and time.
Gina Daniel-Lee is the vice president of strategic alliances at Velociti, Inc., a global provider of technology deployment services.