Information technology outsourcing (ITO) enables organizations to cut labor and infrastructure costs, improve operating efficiencies and increase flexibility in the IT department. Although certain aspects of retailing are ideally suited to out-of-house automation via ITO, the retail industry as a whole has not embraced ITO as much as some other industries.
That said, ITO is not an appropriate strategy for every company, IT department or IT-related situation. So how can a retail executive making IT decisions determine when they should outsource and when they should keep things in-house? Following are three situations where a retailer should at least seriously consider using ITO as a means of increasing efficiencies while reducing costs.
Don’t Sweat the Small Stuff
One area of any enterprise where ITO can prove hugely valuable is in the management and processing of low-level processes and data. Generating large volumes of individual transactions both on the front and back ends of the business, retailers typically execute numerous low-level processes and collect reams of low-level data (more on that in a moment).
By moving some or all of the processing of their “small stuff” to outsourcing providers, retailers can shrink their IT budgets without sacrificing any solutions or personnel focused on handling more important areas of the business. In addition, IT employees are freed to spend more time developing, implementing and managing higher-level systems that perform more mission-critical processes and tasks.
No Task is Too Big
On the other end of the ITO spectrum, sometimes IT-related tasks that require expensive and complex systems and/or highly trained personnel are best left to outsourced experts. For example, all those low-level transactions retailers execute every day produce tiny nuggets of data that don’t mean much individually, but when holistically combined and analyzed as “Big Data” can offer unparalleled insight into the enterprise.
Harnessing and leveraging Big Data to obtain the actionable insight hidden within is neither cheap nor easy. Rather than going to the considerable time and expense required to develop in-house