Retailers, like so many other industries, realize that new technology is vital to the growth and sustainability of their business. They know that their IT budgets must continue to increase if they are to stay competitive, but they also need to make sure that they're getting the best value at the best price from their vendors. Unfortunately, retail IT purchasing is a difficult task and you can easily overspend if not careful.
Here are three common areas where overspending is all too common:
1. Cloud Computing Services
Because the cloud promises so many desired features and benefits for retailers, many are choosing to invest before they are truly prepared. This has led to massive overspending and less-than-perfect contract terms. Additionally, vendors are able to secure lock-in and get the upper hand in future negotiations when they hit buyers with annual cost increases and data/service portability constraints.
2. e-Commerce Solutions
Thanks to mobile devices, social media and increased consumer data, today's retailers are being forced to invest in large-scale upgrades to their e-commerce platforms. These upgrades will help improve database management, integrate social media and implement multichannel selling tools. With the large-scale upgrades come large-scale purchases and price tags. Knowing fair market value for new technology bought today is a must, especially if the improvements are tied to future business performance.
3. Wireless Service and Data Networking
Wireless is one of the worst areas in terms of overspending. In fact, the average business overspends by as much as 20-50 percent on their wireless service. Retailers are especially at risk as mobile devices and PoS become essential to daily operations. The overspending usually results when retailers agree to pay pay consumer rates, don't pool minutes or audit usage, and fail to negotiate for incentives. Data networking is another area rife with overspending due to inadequate planning and hasty decisions for solutions like WDM and HA.
Here are three common areas where overspending is all too common:
1. Cloud Computing Services
Because the cloud promises so many desired features and benefits for retailers, many are choosing to invest before they are truly prepared. This has led to massive overspending and less-than-perfect contract terms. Additionally, vendors are able to secure lock-in and get the upper hand in future negotiations when they hit buyers with annual cost increases and data/service portability constraints.
2. e-Commerce Solutions
Thanks to mobile devices, social media and increased consumer data, today's retailers are being forced to invest in large-scale upgrades to their e-commerce platforms. These upgrades will help improve database management, integrate social media and implement multichannel selling tools. With the large-scale upgrades come large-scale purchases and price tags. Knowing fair market value for new technology bought today is a must, especially if the improvements are tied to future business performance.
3. Wireless Service and Data Networking
Wireless is one of the worst areas in terms of overspending. In fact, the average business overspends by as much as 20-50 percent on their wireless service. Retailers are especially at risk as mobile devices and PoS become essential to daily operations. The overspending usually results when retailers agree to pay pay consumer rates, don't pool minutes or audit usage, and fail to negotiate for incentives. Data networking is another area rife with overspending due to inadequate planning and hasty decisions for solutions like WDM and HA.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI Financial to learn more about telecom cost reduction consulting
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