With that said, a challenge is that most Tier 1 and 2 Retailers will have 10% to 20% of their current operating processes that are not based on Best Practice. In such instances, if the Retailer is looking to migrate to a pure \u201cOut of the Box\u201d deployment, they will have to create new retail processes and redeploy people.<\/p>\n\n\n\n
Lastly, Cloud computing allows system integrators\/consultants to be more agile in deploying\/recommending functional improvements, however it requires a consistent change management process that is not discarded after initial implementation.<\/p>\n\n\n\n
What drives Change in Retail<\/strong><\/h2>\n\n\n\nPrior to any project, we sit down with the project team and stakeholders of the retailer to identify the forces driving the change. Identifying these drivers up front is a required activity to set up strategic objectives and project goals that the team can mobilize towards. Change is painful, even more so in retail and understanding why it is necessary and the challenges that are being addressed, will help keep the team focused and motivated throughout the project journey. Typically, we see the following three types of change, with sample specific drivers.<\/p>\n\n\n\n
\n- External Change Drivers\n
\n- Competition<\/li>\n\n\n\n
- Consumer behavior and expectations<\/li>\n\n\n\n
- Market Contraction<\/li>\n\n\n\n
- Economic shifts<\/li>\n\n\n\n
- Product Obsolescence or invention<\/li>\n<\/ul>\n<\/li>\n\n\n\n
- Management Change Drivers\n
\n- Profit objectives<\/li>\n\n\n\n
- Brand extension<\/li>\n\n\n\n
- Shareholder value<\/li>\n\n\n\n
- Market share<\/li>\n\n\n\n
- Customer growth<\/li>\n\n\n\n
- Channel growth<\/li>\n<\/ul>\n<\/li>\n\n\n\n
- Internal Change Drivers\n
\n- Operational inefficiencies<\/li>\n\n\n\n
- Obsolete or replaced technology<\/li>\n\n\n\n
- Recent acquisitions <\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n
With that said, most projects in the retail industry are driven by multiple factors and many are inter-related (i.e. \u201ccompetition\u201d from online retailers has changed \u201cconsumer behavior\u201d in shopping and has shown technology and process to be \u201cobsolete\u201d). Once a retailer uses these drivers to identify their goals\/objectives they are ready for the change.<\/p>\n\n\n\n
What are the People, Process and Technology changes needed in Retail<\/strong><\/h2>\n\n\n\n![\"\"](\"https:\/\/www.skillnetinc.com\/wp-content\/uploads\/2023\/01\/Change-Management.png\")
Figure : Change Management<\/figcaption><\/figure>\n\n\n\nWhen Shoppers purchase a new PC or appliance, they essentially just need to \u201cPlug\u201d it in and are ready to perform whatever operation they want to execute, \u201cPlay\u201d. However, for Tier 1 and 2 retailers (and even most Tier 3 retailers with revenue over $100 million), most enterprise solutions are not \u201cPlug and Play\u201d and require Change Management for the following reasons:<\/p>\n\n\n\n
\n- Modern Commerce IT landscapes support analytical and strategic decision making whereas in the past these solutions were meant to be execution tools. For example, in past a retailer could decide a suggested order qty (SOQ) on a piece of paper or excel, and then enter into a purchase order management system, where as now POS sales data is cleansed, sent to forecasting tool, which sends demand data to replenishment tool that takes into account on hands and on orders to automatically create an SOQ that is interfaced to the purchase order management solution<\/li>\n\n\n\n
- Apart from some store systems and warehouse management solutions, most Retail solutions require some sort of in-depth training and skills partly because of their powerful downstream affects. This may not be easily seen when making a decision in the silo of one solution. Best practice store and warehouse systems, will also have major downstream affects, but most Retailers will fool proof these systems (which is also a function of Change Management) so mistakes cannot be made, are caught through an auditing process, or are mitigated in another manner<\/li>\n\n\n\n
- Most Tier 1 and 2 retailers became Tier 1 and 2 by having previous iterations of innovation that will not be replaced (i.e. implementing solutions to support eCommerce, financial auditing, forecasting, price and weather optimization, etc.). There have always been \u201cDrivers for Change\u201d hence most of these retailers have grown and matured with specialized systems across their technology landscape. Whatever new solution is being implemented, it should continue to provide and\/or ingest data and information from these legacy applications<\/li>\n<\/ul>\n\n\n\n
Because retailers cannot just \u201cPlug and Play\u201d a solution, they will need to change the three facets of any retail system: People, Process, and Technology:<\/p>\n\n\n\n
\n- \u201cPeople\u2019s\u201d roles and responsibilities will change when using new processes and technology<\/li>\n\n\n\n
- Operating \u201cprocesses\u201d may need to change because a manual process is now automatic, or vice versa. Or whole new processes need to be created because there was no access to new functionality. Lastly, processes can also change because better and new information is available<\/li>\n\n\n\n
- The \u201ctechnology\u201d, by definition in a new implementation, is already changing and will affect \u201cpeople\u201d and \u201cprocesses\u201d and the whole IT landscape. If a required function will not be supported by an \u201cout of a box\u201d feature or a new process or role, so a retailer may need to create a technological tool that is outside the current solution. In these cases, Micro Services can be used to provide the necessary real time exchange of data, but a new sub project may need to be initiated to build out or acquire these external new tools<\/li>\n<\/ul>\n\n\n\n
Gaps between current retail operations and Best Practices<\/strong><\/h2>\n\n\n\nWe assume that most Tier 1 and Tier 2 Retailers operate using Best Practices, but reality is that there are very few organizations that are 100% best practice. From our experiences, even in the best run IT operations, 10 to 20 percent of retail operating processes would not be considered Industry Best Practices<\/em>. These unique practices may be outdated bad habits adopted over time, but sometimes they may be the \u201csecret sauce\u201d for why that Retailer is successful (We had a client with unique customer financing options, that was their \u201csecret sauce\u201d and could not be supported with an out of box solution). In either case, a thorough Gap analysis will need to be completed and owned by the Project Team and Stakeholders.<\/p>\n\n\n\nThe process to analyze each function should include the following:<\/p>\n\n\n\n
\n- Define key retail functions that need to be addressed<\/li>\n\n\n\n
- Identify Upstream and Downstream dependent systems (people, processes and technology) and corresponding functions that will be affected<\/li>\n\n\n\n
- Document and review of current and\/or planned business processes<\/li>\n\n\n\n
- Compare current\/planned business processes to Best Practices and denote Gaps<\/li>\n\n\n\n
- Develop and agree on new solutions whether a change or a combination of changes to People, Process or Technology (for SAAS solutions this may be building or acquiring external systems)<\/li>\n<\/ul>\n\n\n\n
In a PASS environment, technological modifications to base \u201cout of box\u201d retail solutions are more acceptable. But modifications cost money to produce, increase the difficulty of installing future releases of the base system to the Cloud, and increase implementation risk. Consequently, modifications should be limited to only those that are critical to the business or provide truly overwhelming benefits.<\/p>\n\n\n\n
Sometimes, we kick off this Gap Analysis exercise (sometimes called \u201cConference Room Pilot\u201d or \u201cBusiness Impact Analysis\u201d) prior to an implementation even starting, as most of the Best of Breed retail packages use known best practices. Retailers like this as they often can \u201cjump start\u201d the change management process even before the formal implementation project gets started (i.e. previous clients have engaged us to begin this process as they finish selecting and negotiating with their preferred solution provider).<\/p>\n\n\n\n
If this activity is done after selection has been completed, the Vendor will be included and we often will set up a \u201cLab\u201d with an out of box base retail solution, so the project team will have a hands-on experience with the new tool as we identify Gaps.<\/p>\n\n\n\n
Consistent Change Management even after implementation in a Cloud Environment<\/strong><\/h2>\n\n\n\nThe beauty of a SAAS based solution is that retailers will not have to worry about deploying upgrades as updates to the software are made automatically and deployed by Vendor\/System integrator once internal Quality Assurance (QA) is complete. However, with this benefit retailers will need to create a process to test and ingest these changes as they are communicated in a Vendor\u2019s release notes (one SAAS Vendor we work with provides software updates about once a month). This is a form of Change Management as well.<\/p>\n\n\n\n
Creating automated test scripts and a uniform process to identify if these retail software updates will require changes to upstream and downstream processes, people or technology is imperative in a SAAS environment.<\/p>\n\n\n\n
Typically, in an on premise or PAAS implementation, once a new system is fully implemented, users will only see changes three times with the new system:<\/p>\n\n\n\n
- \n
- Competition<\/li>\n\n\n\n
- Consumer behavior and expectations<\/li>\n\n\n\n
- Market Contraction<\/li>\n\n\n\n
- Economic shifts<\/li>\n\n\n\n
- Product Obsolescence or invention<\/li>\n<\/ul>\n<\/li>\n\n\n\n
- Management Change Drivers\n
- \n
- Profit objectives<\/li>\n\n\n\n
- Brand extension<\/li>\n\n\n\n
- Shareholder value<\/li>\n\n\n\n
- Market share<\/li>\n\n\n\n
- Customer growth<\/li>\n\n\n\n
- Channel growth<\/li>\n<\/ul>\n<\/li>\n\n\n\n
- Internal Change Drivers\n
- \n
- Operational inefficiencies<\/li>\n\n\n\n
- Obsolete or replaced technology<\/li>\n\n\n\n
- Recent acquisitions <\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n
With that said, most projects in the retail industry are driven by multiple factors and many are inter-related (i.e. \u201ccompetition\u201d from online retailers has changed \u201cconsumer behavior\u201d in shopping and has shown technology and process to be \u201cobsolete\u201d). Once a retailer uses these drivers to identify their goals\/objectives they are ready for the change.<\/p>\n\n\n\n
What are the People, Process and Technology changes needed in Retail<\/strong><\/h2>\n\n\n\n
Figure : Change Management<\/figcaption><\/figure>\n\n\n\n When Shoppers purchase a new PC or appliance, they essentially just need to \u201cPlug\u201d it in and are ready to perform whatever operation they want to execute, \u201cPlay\u201d. However, for Tier 1 and 2 retailers (and even most Tier 3 retailers with revenue over $100 million), most enterprise solutions are not \u201cPlug and Play\u201d and require Change Management for the following reasons:<\/p>\n\n\n\n
- \n
- Modern Commerce IT landscapes support analytical and strategic decision making whereas in the past these solutions were meant to be execution tools. For example, in past a retailer could decide a suggested order qty (SOQ) on a piece of paper or excel, and then enter into a purchase order management system, where as now POS sales data is cleansed, sent to forecasting tool, which sends demand data to replenishment tool that takes into account on hands and on orders to automatically create an SOQ that is interfaced to the purchase order management solution<\/li>\n\n\n\n
- Apart from some store systems and warehouse management solutions, most Retail solutions require some sort of in-depth training and skills partly because of their powerful downstream affects. This may not be easily seen when making a decision in the silo of one solution. Best practice store and warehouse systems, will also have major downstream affects, but most Retailers will fool proof these systems (which is also a function of Change Management) so mistakes cannot be made, are caught through an auditing process, or are mitigated in another manner<\/li>\n\n\n\n
- Most Tier 1 and 2 retailers became Tier 1 and 2 by having previous iterations of innovation that will not be replaced (i.e. implementing solutions to support eCommerce, financial auditing, forecasting, price and weather optimization, etc.). There have always been \u201cDrivers for Change\u201d hence most of these retailers have grown and matured with specialized systems across their technology landscape. Whatever new solution is being implemented, it should continue to provide and\/or ingest data and information from these legacy applications<\/li>\n<\/ul>\n\n\n\n
Because retailers cannot just \u201cPlug and Play\u201d a solution, they will need to change the three facets of any retail system: People, Process, and Technology:<\/p>\n\n\n\n
- \n
- \u201cPeople\u2019s\u201d roles and responsibilities will change when using new processes and technology<\/li>\n\n\n\n
- Operating \u201cprocesses\u201d may need to change because a manual process is now automatic, or vice versa. Or whole new processes need to be created because there was no access to new functionality. Lastly, processes can also change because better and new information is available<\/li>\n\n\n\n
- The \u201ctechnology\u201d, by definition in a new implementation, is already changing and will affect \u201cpeople\u201d and \u201cprocesses\u201d and the whole IT landscape. If a required function will not be supported by an \u201cout of a box\u201d feature or a new process or role, so a retailer may need to create a technological tool that is outside the current solution. In these cases, Micro Services can be used to provide the necessary real time exchange of data, but a new sub project may need to be initiated to build out or acquire these external new tools<\/li>\n<\/ul>\n\n\n\n
Gaps between current retail operations and Best Practices<\/strong><\/h2>\n\n\n\n
We assume that most Tier 1 and Tier 2 Retailers operate using Best Practices, but reality is that there are very few organizations that are 100% best practice. From our experiences, even in the best run IT operations, 10 to 20 percent of retail operating processes would not be considered Industry Best Practices<\/em>. These unique practices may be outdated bad habits adopted over time, but sometimes they may be the \u201csecret sauce\u201d for why that Retailer is successful (We had a client with unique customer financing options, that was their \u201csecret sauce\u201d and could not be supported with an out of box solution). In either case, a thorough Gap analysis will need to be completed and owned by the Project Team and Stakeholders.<\/p>\n\n\n\n
The process to analyze each function should include the following:<\/p>\n\n\n\n
- \n
- Define key retail functions that need to be addressed<\/li>\n\n\n\n
- Identify Upstream and Downstream dependent systems (people, processes and technology) and corresponding functions that will be affected<\/li>\n\n\n\n
- Document and review of current and\/or planned business processes<\/li>\n\n\n\n
- Compare current\/planned business processes to Best Practices and denote Gaps<\/li>\n\n\n\n
- Develop and agree on new solutions whether a change or a combination of changes to People, Process or Technology (for SAAS solutions this may be building or acquiring external systems)<\/li>\n<\/ul>\n\n\n\n
In a PASS environment, technological modifications to base \u201cout of box\u201d retail solutions are more acceptable. But modifications cost money to produce, increase the difficulty of installing future releases of the base system to the Cloud, and increase implementation risk. Consequently, modifications should be limited to only those that are critical to the business or provide truly overwhelming benefits.<\/p>\n\n\n\n
Sometimes, we kick off this Gap Analysis exercise (sometimes called \u201cConference Room Pilot\u201d or \u201cBusiness Impact Analysis\u201d) prior to an implementation even starting, as most of the Best of Breed retail packages use known best practices. Retailers like this as they often can \u201cjump start\u201d the change management process even before the formal implementation project gets started (i.e. previous clients have engaged us to begin this process as they finish selecting and negotiating with their preferred solution provider).<\/p>\n\n\n\n
If this activity is done after selection has been completed, the Vendor will be included and we often will set up a \u201cLab\u201d with an out of box base retail solution, so the project team will have a hands-on experience with the new tool as we identify Gaps.<\/p>\n\n\n\n
Consistent Change Management even after implementation in a Cloud Environment<\/strong><\/h2>\n\n\n\n
The beauty of a SAAS based solution is that retailers will not have to worry about deploying upgrades as updates to the software are made automatically and deployed by Vendor\/System integrator once internal Quality Assurance (QA) is complete. However, with this benefit retailers will need to create a process to test and ingest these changes as they are communicated in a Vendor\u2019s release notes (one SAAS Vendor we work with provides software updates about once a month). This is a form of Change Management as well.<\/p>\n\n\n\n
Creating automated test scripts and a uniform process to identify if these retail software updates will require changes to upstream and downstream processes, people or technology is imperative in a SAAS environment.<\/p>\n\n\n\n
Typically, in an on premise or PAAS implementation, once a new system is fully implemented, users will only see changes three times with the new system:<\/p>\n\n\n\n