How can I challenge my IT provider to support my revenue?
As the spending downturn continues to make life tough for retailers, one way for retailers to ensure growth is to effectively deliver a multichannel strategy, secure their online revenues and meet the growing expectations of an evolving breed of online shopper. In light of that, Len Padilla, senior director of technology at NTT Communications, believes retailers should be asking more of their IT providers.
“As retailers look to meet these challenges they should assess whether their IT and online infrastructure is helping rather than hindering their revenue prospects,” he says. For instance, if revenues are seasonal, then retailers shouldn’t be trapped into paying for server capacity that they may only require once or twice a year. “The good news is that cloud computing models have changed the way IT provision can be accessed and have improved flexibility in the way retailers can pay,” says Padilla.
He advises asking your cloud hosting provider to develop a pricing mechanic that is tailored to your business model – for instance by charging for web cloud requirements based on the number of sales actually made online, rather than by site traffic alone.
“This means retailers can directly link investment in IT with sales revenue, and is a great option during times of uncertainty, allowing them to cushion against revenue fluctuation caused by seasonal demand or unforeseen circumstances,” he says.