Cloud-Based Subscription Models Offer Vast Opportunities to all Companies

The majority of companies in the world all have legacy IT systems they have to contend with.  And with any IT system, regardless if it is paid for, there is a maintenance cost; to write the code for any enhancement and additionally, there is a lack of depreciation for any updated software.

Many companies’ entire IT budget amount is devoted to the maintenance and enhancements of these legacy systems. It is true that the current legacy systems aided in the success of each company but the cost of new systems including the beta tests, the cost of running the old and new systems concurrently, the time it takes to install new software, and the transition to the new software is still not risk free! It is estimated that 60-70% of an average IT budget is devoted to simply maintaining legacy systems with no improvements!

Current retail planning systems are out-of-date and don’t effectively address today’s requirements for an multi-channel planning environment, according to Boston Retail Partners’ 2015 Merchandise Planning Benchmark Survey. Many retailers are using planning applications designed for their old retail business models with a large percentage of these systems installed in the late 1990s or early 2000s. Today, many retailers are attempting to meet the needs of a 21st century customer while constrained by 20th century technology.

Key findings in the 2015 Merchandising Planning Benchmark Survey include:

  • Analytics is the top priority
  • Advanced analytics are gaining traction
  • Separate inventory across channels (49% of retailers maintain separate inventories for each channel)
  • Social media use for merchandise planning is opportunistic
  • Integrated merchandising plans are not working well
  • Planning systems are outdated

The “good news” according to the 2015 Merchandising Planning Survey of top North American that 63% of retailers plans to upgrade or replace their merchandising systems. This begets the question; aren’t they repeating the same archaic process that got them in this situation?

Cloud-based Subscription models offer companies an inexpensive alternative to major financial and time-consuming investments while gaining immediate use, no upkeep and continuous upgrades and with an exit, if the new system does not deliver the expected results. Compare this to the outright purchase of a new IT system. The benefits are obvious:

  • Cloud based model, no huge upfront license costs. No servers to maintain and manage
  • No need to change existing systems.  
  • Non-Intrusive implementation
  • A try it, if you like it, continue and/or increase scope; if not, exit after a fair trial
  • No requirement of heavy capital outlay, it frees up cash to use for other corporate initiatives
  • Maintenance free
  • No need to learn and train on new systems
  • No third party involvement needed to incorporate current systems
  • Totally encrypted for security
  • Upgrades are on the plate of the SaaS (Software as a Service) provider  

Bernard Anderson

Principal Consultant with NextOrbit, thought leader with extensive experience and expertise in the Retail and Consumer Products industry.