Intelligent finance is the new black
The retail sector is reluctant to make IT investments, but finance firms can help, writes Philip White
It’s good to see that CRN’s editor is doing her bit to prop up the UK economy by maintaining a healthy shopping habit (leader, CRN 13 June). And she’s absolutely right, the retail sector is under pressure to update its technology, both with back-office and shop-front solutions.
At the same time, Nick Booth is right to say that the retail sector is feeling the pinch (‘Laying out your store for the retailers’, CRN 13 June). Recent profit warnings have highlighted the volatile nature of the sector and demonstrated the importance of genuinely business-enhancing IT over whistles-and-bells solutions.
Despite the apparent abundance of shop-front technologies in major stores, the retail sector has traditionally not been a particularly enthusiastic adopter of IT. This is because most businesses lack the resources to invest in technologies, even if these carry a demonstrable return on investment (ROI) or business benefits. You have only to look at the outcry over chip and PIN to understand the sector’s reluctance. Yet these self-same businesses want to be competitive, and technology really can offer retailers the edge. Those of us in the channel just need to show them how.
Nick Booth’s article demonstrated admirably the need for solutions that deliver ROI by offering real business benefits, such as less queuing time, quicker payment or intelligent inventory management. It is true that resellers can profit from the retail industry by meeting these needs, but offering intelligent finance options is equally important – particularly when the high street is in the doldrums. At Syscap, we recently set up a department dedicated to the retail sector, in response to what we saw as a need for IT finance for hardware, software, support and services.
One of the growing trends in retail is the demand for subscription software licensing, to enable retailers to pay for software on a rolling basis, rather than upfront. Pretty much everyone can see the benefits of this payment model – except in the channel, where there are concerns about managing the financial black hole that this payment method creates. But this shouldn’t prevent resellers from profiting from the retail sector. Genuinely good technologies are being developed for this sector, and if retailers want to pay over time, there are options that help ensure resellers avoid the financial shortfall.
Schemes from the finance industry, such as our own SoftwarePlan, have been developed to tackle just this. The schemes let firms acquire software now but spread the cost with subscription-based payments. The reseller receives 100 per cent of the software’s value from us, the finance provider, upon installation.
Such schemes help resellers in other ways too, by enabling them to enter a long-term agreement with customers, helping to secure their own place in the renewals chain. Similarly, by including value-adds such as training, this relationship is strengthened still further. Since the agreement is with an independent finance provider, resellers can offer the subscription-based payment method with any software, from any combination of vendors. In this way, they can meet the demand from sectors where paying over time is set to stay in fashion and upfront investment is just so last year.