In today’s rapidly changing, consumer-centric retail landscape, there is a critical need for retail CIOs to transition from a focus on the back office to driving innovation as C-level strategists, according to a study released today by Tata Consultancy Services (TCS), a leading IT services, consulting and business solutions organisation.
TCS commissioned Forrester Consulting to conduct the study, The Global Agenda of Retail CIOs, to evaluate the state of IT within the global retail industry and CIOs’ attitudes and plans toward key trends and ever-more disruptive, challenging technologies.
In-depth interviews with senior business and IT executives at global retailers found the potential for CIOs to embrace disruptive technologies are too often hampered by a lack of key resources and business alignment. This is illustrated through the fact almost two thirds (64%) of global retailers consider cost reduction as a major focus over the next few years, versus only two fifths (38%) citing innovation.
“Retail CIOs are uniquely positioned with an enterprise-wide perspective to overcome operational silos and become true change-agents, critical to future cross-channel customer engagements and business growth,” said Pratik Pal, president of retail, CPG, travel, transportation and hospitality for TCS. “They are primed to expand their leadership role in the dynamic new world of retail by spearheading the digital and innovation agenda.”
Retail business executives’ core priorities remain revenue growth – with 87% listing it as a top priority – underpinned by multi-channel integration and digital customer engagement. Retail CIOs believe the disruptive technologies of mobility, social media, cloud, and big data will continue to radically transform the retail industry status quo, yet they are not staffed or structured adequately to take full advantage.
Mobile – at the forefront of innovation that will continue to disrupt retail over the next years
- CIOs plan to rapidly implement an array of mobile technologies, with context-aware tech (32%), mobile payments (28%), digital signage (24%), and mobile POS (22%) leading the way
- Retail CIOs in the UK are global leaders in having already implemented some form of mobile payments (73%), while German retailers interestingly buck the global trend, with 60% having no mobile plans at all
- Perhaps with an eye toward further improving customer service and logistics, six out of 10 (59%) retailers plan to invest in mobile-enabling their partners and vendors over the next three to five years
Cloud – frees up IT teams from traditional core functions to allow greater innovation
- While 41% of retail CIOs currently use SaaS (software-as-service) for back-office functions such as supply chain and product life cycle management or ERP, more than half (52%) intend to do so over the next five years
Big data – not yet being used to its full potential to drive actionable insights
- Almost seven out of 10 (68%) retail CIOs report that they collect data, but agree they are not maximising its full value
- Only 47% have invested in cross-channel analytics – a critical enabling technology for deriving multi-channel insights and enhancing the company’s ability to reach consumers effectively through their channel of choice
- Additionally, only a fourth (25%) of retailers have plans to invest in big data analytics to support customer service
Social – looking to expand the reach and application of social media intelligence
- Perhaps not surprisingly, eight out of 10 (80%) retail CIOs leverage social media for sales and marketing, with customer service and recruitment the next most common functions
- However, almost half (46%) of retailers plan to link social insights to R&D and product design during the next three to five years – unlocking customer-centric product designs
- Canadian firms are far ahead of other countries/regions, with 67% already leveraging social media for R&D
Talent shortage – lack of technical skills a key obstacle in implementing critical technology strategies
- Almost seven out of 10 (67%) retailers surveyed consider attracting and retaining talent a critically important challenge over the next three to five years
- In the area of mobility in particular, a third (34% report struggling to obtain the necessary talent
- Similarly, four out 10 CIOs turn to SaaS (software-as-service) solutions (39%) and are compelled to leverage external partners with emerging mobile expertise (equally 39%) to support internal teams as they build mobile strategies and applications.
“Savvy CIOs will continue to drive cost savings while accessing the latest technology innovations and leveraging partners to provide not only commodity services, but high value and hard to find capabilities like mobile development, architecture and business requirement definition,” said Pal.
“In doing so, CIOs can concentrate their internal resources on strategy, business alignment and partner governance, while partners concentrate on technical excellence.”