Retail ready to catch-up with cloud solutions
“Flexibility, scalability, growth engine.” In an interview with our Best Practice customer magazine, Michael Gerling, managing director of EHI Retail Institute, started out by naming a number of advantages benefiting companies that work with cloud computing. But only 45 percent of German retail companies actually use cloud technology. According to “Cloud Monitor 2015,” which is published by auditing firm KPMG, well over 60 percent and in some cases even 70 percent of the companies from industries like the automotive, logistics and banking sectors currently rely on cloud solutions. Of all the retail sectors, the foodstuffs retail sector, which generated 180 billion euros in sales last year and is a heavyweight among retailers, is particularly trailing behind. With 48.1 percent of all retail companies “tending to be open and express interest,” only 1.7 percent of companies in the foodstuffs retail sector share the sentiment.
But, according to Michael Gerling, the industry is finally determined to catch up, whether it be with electronic shelving labels, self checkout registers, mobile payment or viral coupons. And companies are ready to invest in solutions such as SAP-HANA and In-Memory technologies. An increasing number of companies are realizing that speed and flexibility are very obviously questions of digitization and can no longer be solved with “traditional systems”. The idea is to provide services at a speed customers expect and only the cloud can do that. Personalized customer inquiries via geo marketing solutions (proximity), using beacons and managing individual logistics processes for home delivery means that huge amounts of data need to be collected centrally, stored and then analyzed in real time.
Michael Gerling thinks that the retail sector has been standing in its own way. With the simple excuse that “it’s all too risky,” companies from the foodstuffs retail sector have been making efforts to avoid cloud technologies for some time now. When it comes to customer, selection, staff and supplier data, the foodstuffs retail industry needs their external IT provider to be “almost 100% reliable with extremely high-quality service.” And there appears to be a lack of confidence that this is possible. I have to admit, I completely understand the foodstuffs retail sector, because quality and security are central when it comes to cloud solutions. And those aren’t things you can just find anywhere. Customers are also looking for cloud technology experience, security and reliable networks, redundant data centers and, and, and. And the right IT service provider to be their partner. Crisp Research, for example, found “that professional cloud service providers are always able to provide better data and application protection than a company could do by itself.”
According to Michael Gehrling, the real issue is “raising awareness” – about how IT providers can help retail catch up. It’s up to us ICT service providers; that’s what we need to do. Because the desire for total reliability is completely valid. It’s not for nothing that analysts now consider quality to be the number 1 criterion for selecting an IT service provider. And there’s a reason why we launched our extensive Zero Outage quality program in 2011. And why it covers all areas: processes, platforms and, especially, people. We currently have more than 20,000 quality-certified employees and a top management that isn’t afraid to get their hands dirty when there’s a problem. Even at nights and during weekends. After more than 10 years of experience with cloud technologies and countless cloud transformation projects of all sizes including DAX and Fortune 500 companies, I’m more convinced than ever that everything depends on quality and security. It doesn’t matter whether we’re talking about Fort Knox security measures at the data center, preventative, end-to-end quality management, integrating the concept of quality into the service providers’ DNA or creating a board of management position for security. Plus you have the strict German data privacy standards.
But it’s also true that these things don’t just grow on trees. It takes years for a company to truly “inhale” quality and security and let it guide their daily thoughts and actions. And the more business models and business processes are based on technology and cloud solutions, the more important these aspects become. I can understand why there is a lack of confidence in the retail sector. Trust doesn’t happen over night. It takes time. It happens over the course of dependable, honest collaboration. And this collaboration always starts with a conversation. I’m looking forward to it.