Every Christmas holiday is a chaotic shopping experience. No matter how long the lines are, consumers are willing to rub elbows with fellow consumers just to get the best shopping deals. Meanwhile, businesses are smiling from ear to ear due to the profits they are earning. This is the only time in the year where overspending can be an excuse. And last holiday, retail IT companies took advantage.
Did that come as a surprise to you? The retail IT department took advantage of the crazy holiday sales ad increased their profits before the year ends. And why not? IT budgets rose from 3 to 5 percent since 2011 while retailers had a 5 percent budget increase.
It's about time retailers utilize their IT department especially in a digitally driven world. With consumers split between mobile shopping and traditional shopping, retailers can earn more by tapping into both. Increasing the budget for IT projects will be beneficial in the long run. However, retailers should also be cautious with their budget.
* Retailers are always pressured to upgrade their e-commerce platforms. The upgrade is needed to accommodate more traffic as well as meet the demands of consumers for mobile shopping convenience. Investments should be made.
Retailers have to upgrade databases and use multichannel selling software. These are large-scale buys which really needs a separate budget. However, retailers should make purchases in fair market pricing and terms. Their purchases today will have a huge effect on their budget in the coming years.
* Retailers tend to overspend on wireless and data networking by 20 to 50 percent. The reason behind this is the growing popularity of mobile shopping. Retailers had no choice but to increase their budget for this.
They can try to negotiate for incentives or change plans more suited for their needs. Vendor lock-in is another cost of overspending.
* Retailers also have to invest on cloud hosting and computing. Retailers feel the pressure to purchase this service ASAP too. So, they ended up not paying for the best model for their business needs which leads to unnecessary overspending.
Investing in IT projects will not only guarantee you returns during the holidays, but it will help you earn more profits throughout the year. However, don't make hasty decisions. Spending on IT is not cheap and any expenses incurred today will affect your budget in the following years.
Did that come as a surprise to you? The retail IT department took advantage of the crazy holiday sales ad increased their profits before the year ends. And why not? IT budgets rose from 3 to 5 percent since 2011 while retailers had a 5 percent budget increase.
It's about time retailers utilize their IT department especially in a digitally driven world. With consumers split between mobile shopping and traditional shopping, retailers can earn more by tapping into both. Increasing the budget for IT projects will be beneficial in the long run. However, retailers should also be cautious with their budget.
* Retailers are always pressured to upgrade their e-commerce platforms. The upgrade is needed to accommodate more traffic as well as meet the demands of consumers for mobile shopping convenience. Investments should be made.
Retailers have to upgrade databases and use multichannel selling software. These are large-scale buys which really needs a separate budget. However, retailers should make purchases in fair market pricing and terms. Their purchases today will have a huge effect on their budget in the coming years.
* Retailers tend to overspend on wireless and data networking by 20 to 50 percent. The reason behind this is the growing popularity of mobile shopping. Retailers had no choice but to increase their budget for this.
They can try to negotiate for incentives or change plans more suited for their needs. Vendor lock-in is another cost of overspending.
* Retailers also have to invest on cloud hosting and computing. Retailers feel the pressure to purchase this service ASAP too. So, they ended up not paying for the best model for their business needs which leads to unnecessary overspending.
Investing in IT projects will not only guarantee you returns during the holidays, but it will help you earn more profits throughout the year. However, don't make hasty decisions. Spending on IT is not cheap and any expenses incurred today will affect your budget in the following years.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT expense reduction solution service consulting
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