Why Planning Systems Must Be A Priority For Retailers

Why Planning Systems Must Be A Priority For Retailers

May 12, 2016

It’s no surprise to learn that retailers are in a rapid investment period in terms of IT systems. Historically slow to invest in technology, retailers are now playing catchup in an arena that punishes slow-movers. A retail CIO is faced with the daunting challenge of solving a myriad of complex issues fast, including:

Delivering the CRM and order management capabilities to support quality Omni-Channel customer engagement;
Providing a first-class eCommerce experience that grows profitable sales, again, within a fully-integrated Omni-Channel customer experience;
Solving the complex inventory challenges related to multi-channel and Omni-Channel sales and customer returns;
Improving efficiencies throughout the organization; and
Satisfying the competing budget and resource requests from all the stakeholders in the organization.

It’s an overwhelming, elephant-size, situation for most retailers.

As one of my former bosses used to say, “The only way to eat an elephant is one bite at a time.” In other words, the retailer only has the capacity to handle a finite amount of work at any one time, so it’s important to prioritize and get started.

Perhaps not surprisingly, I propose that replacement of obsolete planning systems should be at, or near, the top of the priority list.

I adhere to the message from Kaitlyn McAvoyofSpend Matters Network in her article of November 2015, Omnichannel Retailers Risk Survival Without Replacing Obsolete Planning Systems. While virtually every system in the organization can make an argument why it should be the top priority, I advocate for planning systems at the top for two reasons.

1. Size of ROI – Product inventory is a retailer’s largest investment and, as a result, minor gains inquality of merchandise and inventory planning deliver significant gains in sales, gross margin and profits. No other area in the business can deliver a bigger or more reliable financial return.
2. Immediacy of ROI Realization – While other, competing, IT projects introduce new technologies, requiring significant deployment timeframes and learning curves, planning systems are less complex and therefore easier and faster to implement. A common implementation calendar for planning tools –also true of Software Paradigm International’s SPI Buyer planning tool – is 6 months, allowing the retailer to achieve a 12-month ROI.

The combination of the two makes a compelling case for putting planning systems at the top of your priority list – taking the first bite out of the elephant – and gaining sizeable near-term ROI, as you take on the next IT project.