Operations Software: Should you Buy or Build?

Retailers, manufacturers, distributors and operators are all struggling to do more with less. Fewer people, less budget, less time. You need to check brand standards, you need to collect data from the field, you need to send tasks to stores. You need to do all of that with limited resources. Do you buy or build?

Let’s dive in.

development and maintenance Costs

It is common to ask the IT department for an estimate of costs to develop an in-house solution. When asking for an estimate, remember to inquire about ongoing support and maintenance costs associated with the entire lifecycle of the software and ongoing usage.

This is especially important for small and medium-sized retailers. SMBs may not have the IT cycles to develop software are provide ongoing support.

Regardless of your size, it is important to be aware that a large number of IT projects go over budget. A 2017 study by the Project Management Institute (PMI) found that 43% of projects exceeded their initial budget.

Remember that 70% of software costs occur after implementation! 

“A rigorous life cycle analysis that realistically estimates ongoing maintenance by in-house developers often tips the balance in favor of buying.” – Mark Lutchen, former global CIO of PriceWaterhouseCoopers

Return on investment

Once you have an estimate of the cost to build, deploy and support, you can begin to compare a ready-made solution.

Utilizing a retail audit software has a measurable impact across all areas of the company. For those previously relying on paper/Excel, automating audit programs with software demonstrates ROI on process improvement alone and gives all levels of the company real-time access to data instantly.

Compliant IA saves an average 145 minutes per audit per store:Time Savings Graph

  • Scheduling the audit and notifying stores is automated.
  • Review past audits quickly using reports instead of searching through paper/email data.
  • Forms are intuitive: only showing items (questions) that are applicable to the location and the user.
  • Scoring is automatic.
  • Data is available in real time.
  • With one click, action plans are automatically created for all non-compliant items identified during the audit.
  • Assigned action plans and tasks reminders are automated instead of chasing after staff with emails, phone calls, and chat threads.
  • Track completion and trends on any device, any time with simple reports.

An out of the box solution will save you the cost of data entry, postage and physical data storage. It gives brands the capability to create and edit forms quickly and eliminates distribution costs associated with sending and/or printing endless hard copy audits.

An appointed form builder can work collaboratively with their team on a single platform to calibrate their forms/checklists as opposed to sharing by email and waiting for a response.

Head office can handle unexpected emergencies and changes (product recall, regulation changes, equipment breakdown, viral negative customer review) for any personnel level instantly with task management.

Save money lost on poor execution

The cost of sub-optimal merchandising is approximately 1% of gross product sales. Success ultimately comes down to proper execution.

Reduce losses associated with theft, fraud, vandalism, and waste

A recent study by the National Retail Federation (NRF) found an average shrink rate of 1.44%, costing “the overall U.S. retail economy $48.9 billion.”

shutterstock_313240559
Photo credit: Shutterstock
  • Companies with efficient processes in place, save time and money. Almost 8% of loss prevention departments are seeing budgets decrease by 20% in 2018.
  • Use retail audit software to distribute loss prevention policies and review tests to ensure standards are understood at the store level.
  • Task management modules enable brands to assign and track LP policy review.
  • Quickly distribute updates to loss prevention policy. Ensure that users have reviewed in real time and follow up with those who have the task outstanding.
  • Retail audit software provides a history of due diligence should a critical incident occur.

Protect the company from claims, fines, and lawsuits due to health and safety violations

  • 70% of small retail businesses feel overwhelmed by government regulations including safety guidelines and labor regulations.
  • Change employee behavior by clearly communicating health and safety standards.
  • Use task management to assign essential equipment maintenance.
  • Attach policy and regulation updates to the form so that information is easily accessible.
  • Demonstrate due diligence for disaster and emergency preparedness with an electronic, easily accessible audit history for each location.

Time to Market

PIM reports that 49% of IT projects finished late in 2017. So when deciding between buying a software solution and building a solution, there are important questions you need to ask yourself.

How soon do you need a solution? If your in-house development team lacks the skill set required for certain areas of the project, do you have the time to wait for and resources to bring in an additional expert? How “right the first time” must the solution be? Do you have the resources to wait for debugging issues?

PIM reports that 49% of IT project finished late in 2017.

Building an in-house solution takes a substantial upfront commitment and the development process from conception, to testing, debugging, and deployment can be months, or longer depending on the solution’s complexity.

Consider your type of business. Forbes observes that for most retail businesses (QSRs, c-stores, furniture retailers, etc.) a great software solution is likely readily available and has already proven effective in your vertical.

Before you decide to build, explore retail audit software solutions that offer a free trial. Other than a few minutes of exploration, your upfront investment is essentially nil. Some applications allow you to be up and running in one day so that you can “test-drive” the solution in your stores with your existing forms or checklists.

Ongoing Support

As noted above, building software is only one part of the process. As the company scales and technology continues to change, it is important to consider the resources required to provide ongoing support and updates.

shutterstock_686342746
Photo credit: Shutterstock

Security and recovery

How is data backed up, recovered in case of a system failure, and secured from hacking?

Documentation and upkeep

Who will author best practice documents, provide training, and keep resources up to date?

Usability

How will the company respond to technology changes (mobile, tablet, app, browser upgrades), requests for new features and ensure uptime for end users?

In the past, a lack of pre-packaged software was a major reason for opting to develop a solution in-house. Today, the competitive nature of the industry requires software vendors to be transparent about offerings and costs.

This means you can choose a vendor whose package includes all of the above as well as upfront pricing for additional modules and features. One major benefit of purchasing a retail audit solution is budgetary predictability.

Compliantia - Retail Audit Checklist Post-01

Choose a vendor in six steps

Let us help you choose a retail audit software vendor in six steps.

One More Thing...

Winning brands execute their way to success. This is why Compliant IA makes site execution easy with checklists, tasks, action plans and corrective actions.

Leave a Reply