24 OUTSOURCINGISSUE
RETAIL PUTS FAITH IN THE CLOUD
t is easy to understand why retail has always been an important industry to third-party IT providers, and particularly those ones that specialise in taking on the strategic and/or day-to-day burden of running IT infrastructures and processes not core to the job of selling.
I
But it is testament to how fast this sector of the IT market that provides point or end-to-end services evolves that, three years ago, when Retail Technology fi rst dedicated a feature to it, the content was full of outsourcing deals or those that would be fulfi lled by providers located offshore, in IT outsourcing hotspots like India, Brazil or Eastern Europe. Now the feature has to take a wider subset of IT providers into account when looking at developments in this area, not least those managed service providers that are increasing their commitment to cloud computing. A common defi nition of cloud is ‘a model for enabling on-demand access to a shared pool of confi gurable computing resources’. And, as such, it represents the latest evolution in the IT outsourcing and offshoring market, except where everything from raw compute power to complex industry-specifi c processes, like business analytics, can be carried out ‘in the cloud’. But what does this mean for retailers? A recent report found distribution, retail and hotels sectors across Europe stood to benefi t most from cloud computing over the next fi ve years. The EMC and the Centre for Economics and Business Research (Cebr) Cloud Dividend report said this sector was set to claim the largest overall share of cloud computing’s economic benefi ts – €233bn (£255bn) – despite being ranked as only the third or fourth largest contributor to gross domestic product (GDP) in the fi ve biggest economies.
The Cebr predicted that future
profi tability in the sector would largely depend on effi ciency rather than volume growth, due to decreased household spending power and rising commodity prices. The sector, it said, was therefore set to take advantage of the highest total net cost
RETAIL TECHNOLOGY MARCH/APRIL 2011
savings across all those it surveyed, equating to €83.3bn (£73.4bn) by 2015. The total benefi ts for the sector constituted 31% of the value created across the region, with 77% of the value being derived from private and hybrid cloud solutions. Sandra Hamilton, EMC Consulting regional vice president, commented: “The adoption of cloud technologies and services across EMEA brings with it the mission-critical agility that businesses need to survive and thrive in the current economic climate. A hybrid cloud model – a dynamic combination of internal and external resources where a private cloud serves as the gateway and control mechanism for public cloud services – provides organisations with the ultimate fl exibility. However, a critical element in businesses achieving the competitive advantage presented by cloud computing lies in the successful virtualisation of mission-critical and revenue-generating applications.” Dr Brad Poulson, principle consultant
for Wipro Retail, told Retail Technology that outsourcing of any kind, and if entered into correctly, can be a benefi cial experience.
However, he cautioned: “The retail psyche isn’t always as aligned as it needs to be to get the best value from successful outsourcing. The natural trading mentality and drive to ‘make a deal’ and the inherent dislike of spending on IT is a powerful combination that can force unrealistic liaisons, and the very public failure of Sainsbury’s with Accenture lives long in the memories of fellow retailers.” As a result, Poulson said the continuing debate of the ‘core competency’ status of retail IT rages and is probably not understood enough internally to inform good decision making. “The inherent retail belief that their organisation is ‘unique’ still prevails and actively works against them adopting commodity processes,” he added. “The retail attitude to risk and governance often results in a hierarchical governance model, with the resultant solution being formed within the boundary of the fi rm. To really get the best value from these opportunities retailers need to examine their inner beliefs and truly understand the importance and value of IT to their business and the best way to provide that.”
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40