Choice is a wonderful thing, fuelling market competition in the aisles of high street stores and online via virtual shopping baskets across digital devices.
However, when it comes to grasping the thorny challenge of modernising the technology stack, the choice for business and technology leaders hasn't always been as attractive. Commit to a potentially career-defining (or ending!) high-expense, risky, and all-consuming wall-to-wall programme of replacements and upgrades, or keep the creaking, increasingly obsolete architecture on life support for another business cycle (or another CEO)? Neither is a mouth-watering prospect.
There is another way, though, that navigates a much more agile and flexible path between the rock of legacy technology architectures and the hard place of a multi-year, multi-million overhaul.
The urgency to solve this perennial problem is growing. Since the pandemic, an expectation gap has grown regarding digital capability between customers and senior leadership on one hand, and technology teams in retail organisations on the other.
During that explosive period of digital interaction, technology teams prioritised immediacy of delivery, driven by existential necessity rather than well thought out architectural roadmaps. Senior leaders' exposure to cutting edge digital trends further heightened expectations for their own businesses, as they relentlessly pushed to deliver better digital experiences for their customer bases.
"Patching up" is not an IT strategy
You might, therefore, take a sympathetic view towards the CIO. Encumbered by a landscape full of inherited legacy systems that were nearly state-of-the-art when they were first installed 20 years ago or more, they are simply not fit for purpose now. Yet, as with an old car, when times are tight – or upgrade costs too high – they'll patch it up one last time and keep rolling, even though they know the engine may blow at any moment. While leadership demanded better digital experiences, they weren't always willing to accept the requirement to pay off the underlying technology debt to get there. "Make do with what we have for another year" was an outcome frequently reached.
This will be the case if you look under the bonnet of many of the UK's largest retailers. In truth, it is a scenario with some obvious financial advantages – the IT estate will be fully depreciated, using on-premise hardware with just one or two individuals responsible for administering the minimal maintenance it requires. Conversely, replacing the system will be expensive, and a move to cloud-based solutions will hit the P&L.
However, the architecture's vintage and accumulated technical debt is served by a shrinking pool of talent who can keep systems running, and missed or rejected opportunities to modernise will eventually come home to roost. This could manifest as systems that fall over during peak trading periods or via vulnerabilities from a cyber security perspective, where legacy systems are increasingly unable to be sufficiently patched or made GDPR-compliant due to the limitations exposed by their age.
Where next, then?
Tech modernisation should not be about complex integration. In fact, complex integration should be the last option. Rather, plotting a path to shrink antiquated monolithic systems, whilst preserving the "heart" in the form of systems of record, will afford you the freedom to deploy an approach where either best-of-breed solutions or in-house developed microservices can connect to this core.
In the midst of a muddled IT estate, retail company boards rightly want to understand the fastest path to business value. They want accurate, insightful management information and an enhanced customer experience that isn't dependent on the gravitational pull of a black hole of legacy sunk tech debt.
Increased agility, flexibility (and, of course, security) can be best viewed initially from your customers' vantage point. From there, work back to simplify their journey as well as the steps you need to take as a business to surface the richest data to inform decision making.
I've seen this hybrid, post-modern – or, as it is increasingly framed, "composable" – approach to technology deliver incredible results at an astounding pace, particularly where focus shifts from a complex system build to surfacing the data that will be most beneficial to running the business. Months of development time gives way to a few days of integration development and data pipeline builds to support analysis and rich insight, delivering business value far more rapidly than was possible before.
Ultimately, retail businesses cannot limp on indefinitely. They will experience greater difficulties in accessing data and tech support and see heightened exposure to cyber vulnerabilities. This "strategy" stands in the way of becoming a data-led business for its consumers. And, if you believe that the pursuit of a data-centric view is tied to a lengthy and costly wall-to-wall ERP technology replacement programme, it's worth remembering that history has shown us that whatever you might be building now will more than likely not be what you need when it's finished...
The good news is that an either-or scenario is no longer necessary. You don't have to live with the pain or embark on an expensive journey to failure. You don't have to choose between the rock or the hard place.
In fact, returning to the topic of choice, the options are altogether more liberating and progressive in the central sweet spot. Choose how to maximise existing tech with emerging tech. Choose how to act on the data insights you gather. And, ultimately, choose how to build a better experience for your customers.
An abridged version of this article first appeared in Retail Week
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
