Comment: Balancing innovation with control

The retail CIOs I know are among the smartest in the industry. They have to be. Technology is so tightly woven into the fabric of retailing that IT performance is more or less synonymous with business performance. The retail CIO is in the thick of it. He or she needs to support new trading models but also keep the existing plates spinning.

In store, they're embracing exciting new ideas to attract increasingly fickle shoppers, with interactive signage, intelligent mirrors in the fitting room, mobile service points and personal shopping assistants, as well as free Wi-Fi. Behind the scenes, there's RFID-enabled logistics and the ongoing struggle to stitch multiple fulfilment channels into a seamless whole. Of course, with each new technology, there is an associated stream of data. And often, this data is hosted in a cloud – either operated by the retailer or the technology vendor.

Forecasting demand and managing tactical promotions – especially hyper-promotions such as Black Friday – are priorities. Black Friday 2014 saw many retail websites and, in some cases, physical stores totally unprepared for the scale of customer demand. And like every business, retailers are also beginning to amass really big amounts of data and need to work out exactly what to do with it.

Fortunately, many of the solutions and resources that retail CIOs need can be delivered as cloud services. Cloud services can be switched on and off at short notice, helping to respond quickly to unforeseen trends, ramp up for seasonal demand or open up temporary outlets. 'Pay as you go' removes the need for capital expenditure in new hardware and software. So it is disappointing that, according to Ovum research in 2014, a quarter of European enterprises are unhappy with their cloud service provider, because of poor performance and service.

More secure in the cloud than out?

Then there is the question of security. 'Shadow IT', where local business units procure their own IT solutions, often via third-party clouds, can account for 30% of a retailer's IT spend – according to BT research from 2014. Of course, nobody wants to discourage grass roots innovation but while many cloud services are more inherently secure than their in-house equivalents, choosing consumer-grade cloud solutions (as opposed to enterprise grade) could open up the retail business to potential security breaches. No-one wants to be the next Target. Also, our research shows that 34% of retailers were hit by DDoS attacks during 2013/2014 and 80% were hit more than once. The fallout from a malicious attack or loss of data could be catastrophic for revenues and reputation.

Today's connected customer expects reliability, speed and convenience – at home, in store and on the move. However, in a cloud environment, the quality of that user experience – for customers or colleagues in-store using assisted selling tools – depends on the network. The only way to guarantee a good experience is with a single, end-to-end global network that can prioritise applications, manage access to data and optimise traffic.

Few global retailers have such a network infrastructure. One CIO from a leading UK retailer recently told us that he was managing more than a dozen different networks and "it feels more like running a phone company than a retail business". It's not that retail CIOs lack the ability to make it all work together – they simply don't have the capacity to juggle multiple networks, cloud platforms and services and guarantee their performance.

A 'cloud of clouds'

One emerging solution is to roll up access to all distinct cloud services, whether in store or back office, into one single cloud that you can manage and secure centrally. Such a 'cloud of clouds' will help the CIO see everything the organisation is using, and weed out insecure services, or wrap them around with appropriate security measures.

To make this happen, industry commentator Ovum's Realising possibilities in the cloud: The need for a trusted broker 2014 report suggests: "Enterprises are increasingly likely to discriminate toward cloud service providers with combined data centre and networking orchestration skills as their trusted brokers across hybrid clouds." In other words, CIOs will partner with an independent global network provider who also has the connectivity and integration skills that are in such short supply. Neutral network partners can help retailers to manage data securely, and be confident that whatever users are doing locally, they are doing it in full compliance with corporate security policies and data protection legislation. 

Such a 'cloud of clouds' approach can give the retail CIO control, and enforce good governance without compromising innovation in store. It's the best way to make sure that customers get a great shopping experience wherever they go.

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BT Global Services