Of course, all major retailers need some systems and business process automation in order to function in the modern world. But do they need all the bells and whistles that the IT industry has to offer?
In his seminal 2003 article in the Harvard Business Review, Nicholas Carr argued that IT doesn’t matter. He explained that IT’s strategic importance is diminishing, not increasing, as information technology has become a commodity input. As he described it: “Necessary for competitiveness, but insufficient for advantage.”
This article sprang to mind last week during a conversation about a particular value retailer. It’s not been an IT innovator and some of its systems are old, but everything works. So for this company there is a perceived risk in innovating to try to gain competitive advantage.
On the other hand, Retail Week regularly covers retailers that are embarking on forklift upgrades to their IT systems and infrastructure. Running on a stable computing platform for so long, they eventually get to the point where they realise that IT is actually holding their business back. Carr would argue that such IT investment just falls into the necessary for competitiveness bracket.
We have all heard the horror stories of large retail IT projects that have gone wrong.
However, the underlying IT implemented in two such projects can be the same; yet in one scenario the project is a success and in the other an utter failure.
The difference between these two outcomes usually comes down to people. So while IT might not matter, the IT department certainly does.