Are traditional ROI measures good enough in today's environment?
Everyone’s focused on ROI for their enterprise technology purchases nowadays. ROI has always been important, but at a time when consumer confidence is low and customer expectations continue to rise, new technology investments are being held to an even higher standard.
But making the shift to a new retail management system can be difficult.
Research has shown enterprise software failure rates range from 30-70%, and some observers say that fewer than 10% of major software purchases fully meet expectations. Stories about outright software failures do appear in the media, but they’re just the tip of the iceberg - people don’t talk publicly about failures because they do not want to be associated with them.
For some companies, their investments become a black hole, sucking up funds to salvage the situation. They pour money and resources into further development, implementation and maintenance, only to find after a few years that they’ve fallen by the wayside.
And many projects may not be outright failures but lead to serious business disruption when the software goes live. Chaotic stores frustrate customers, supply chains go haywire, data integrity and security can be compromised, employee frustration kills productivity and integration challenges hinder efficient operations.
Plus there’s the loss of innovations that can give you a competitive edge. A successful solution will be implemented faster than expected and meet or exceed the expected ROI, letting you create frictionless and differentiated omnichannel customer experiences that drive loyalty and grow revenue.
You don’t want a project that fails to deliver the desired returns because the wrong product was selected.
So how do you justify your technology investment?
There are five tests technology purchases need to pass, and the first is the most important by far:
Test 1: Does it deliver your strategy and help drive forward your KPI's?
Evaluate how the software will help to achieve the strategic goals and objectives of your organisation.
It should be a solution to the challenges you face or help you take advantage of new opportunities. It needs to offer clear benefits like boosting productivity, cutting costs, improving customer satisfaction or increasing revenue. If it doesn't directly address your needs, it's probably not the right fit.
Test 2: Does it deliver REAL value?
The ‘shiny object’ syndrome is prevalent in retail. People can get fixated on the latest trends and fail to assess how the investment helps to deliver a return on investment.
How much will the system cost in terms of licenses, implementation, training and maintenance? Compare those costs to the benefits you expect to see. Consider both the tangible and intangible returns, such as increased revenue, reduced operational costs, improved decision-making, enhanced scalability or competitive advantage. A positive ROI should be evident over a reasonable timeframe.
Test 3: Does it deliver operational savings?
People are your most important resource. If your investment saves them time, that frees them up to work on higher value activities.
The system should be user-friendly with intuitive workflows and features that align with users' needs and preferences. You want a solution that your store and head office staff can easily adopt and start using right away. No one wants to deal with complicated interfaces or spend hours in training sessions. And a solution that provides a positive user experience will yield higher productivity gains and better overall results.
Test 4: Can it grow with you and adapt to change?
Assess whether the system can scale and adapt to your organisation's changing needs. It should be able to handle more data, channels and touchpoints, easily integrate with other systems, be flexible enough to adapt to new technologies and scale to provide long-term value.
You don't want to be stuck with an outdated or narrow point solution that won’t let you evolve to meet changing customer needs.
Test 5: Can you rely on the vendor for new functionality and ongoing support?
Biggest isn’t always best. A mid-sized company will have fewer layers of bureaucracy, giving them more agility and responsiveness. It also means that you’ll be an important customer of influence to your partner - they will value your business and work hard for it.
Assess the reputation and support provided by the vendor. Do they have a good track record of successful implementations in the current, disrupted omnichannel retail climate, with customer reviews and references?
Are they known for their customer service? You’ll want a partner that will be there for you when you need it, ensuring you can easily add new functionality and connect to third party systems (via APIs) to cultivate your retail ecosystem.
By putting your potential software investment through these five tests, you’ll find a solution that meets your needs and is cost-effective, adaptable, user-friendly and supported by a trusted and reliable partner.
Want help to ensure your software investment pays off?
We can help you define your goals, develop a business case and create your roadmap to create the unified experiences that are best for customers and most profitable for you. Get in touch.
For insights into how a move to a unified commerce strategy gives you the flexibility and agility you need to keep in step with consumers’ changing needs, download our new ebook:
