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Reducing costs is what IT is all about for retailers

July 16th, 2010 | No Comments

I was reading through the June issue of Integrated Solutions for Retailers and came across an interesting article titled, “In Business, Everyone is all about Efficient Spend, Right?” Written by Tom Webster, the article talks about how retailers can save big by improving IT sourcing/spend. Webster says, “The IT spend is a profit-improvement gold mine. The learned best practices suggest you can drive out costs 20%, 30%, 40% or more.” He goes on to explain that the majority of the savings comes from increased competition between suppliers.

There’s no doubt that Webster is right about IT spend in the retail industry. In fact, one of America’s oldest and largest department store chains uses automation solutions to conduct all of its IT spend.

Webster goes on to say that “the most challenging aspect will be getting your IT people to modify ‘the way it’s always been done.’” A very salient point, for sure. IT already works under a shroud of mystery because most people within an organization aren’t really sure how all of it works. As long as email is working, the Internet is up and there’s a dial tone, we tend to give IT what they want.

Companies are slowly but surely changing the culture within IT to improve sourcing and reduce spend. The numbers are too great to ignore.

But why stop there? Other large retailers are using intelligent purchasing automation solutions beyond IT to save on big-ticket indirect goods including cash registers, POS systems and security equipment.

As the recession continues unabated, retailers will continue to look for ways to reduce spend and increase profits. Are there savings to mine in your IT spend? Although IT may not hold all the answers to reducing costs, it may be a great place to start.

Bhavin Shah
Director of Product Strategy
Verian Technologies