'In a data-empowered digital world in which solving customers’ problems has become the key success factor, the traditional model for retail supply-chain excellence has to evolve, and retailers must find ways to offer customer convenience across all touchpoints.' - McKinsey
Consumer priorities are changing. Brand loyalty, while not quite a thing of the past, is heavily influenced by customer experience.
The widespread adoption of new technologies has made the customer journey interactive, frictionless and more valuable. Although this is great for the consumer, it puts pressure on retailers to update their legacy systems or lose out to the competition.
Hosted eCommerce sites and monolithic on-premise ERP systems can only do so much. The lack of customisation forces developers to create new features as bolt-on services which often don't work as they should. And while data lakes provide endless possibilities for your storage, it can be hard to derive value from them when there's no inherent way to prioritise or categorise customer information.
Cloud migration increases retail potential
By 2022, businesses with go-to-market strategies for digital commerce are expected to outperform non-digital companies by 30 percent in sales.
This prediction isn't surprising — after all, retail data provides competitive consumer insights. Then there's the fact that using the cloud opens virtual doors to a global base, increasing earning potential even more.
The benefits of the cloud make it clear why you should migrate your retail systems. But how you do it isn't so simple.
'Digital commerce is here to stay, but as many as 90 percent of these project implementations fail or get deprioritised before they reach customers.' - Aditya Vasudevan, Director Analyst, Gartner.
If executed incorrectly, your migration could go over budget and face delays. That's why it's crucial to prepare a migration strategy before you move your legacy systems to the cloud. Here are some things to consider:
1. Is 'Lift and Shift' the right strategy?
This can be a good first step for companies with no cloud presence. With 'Lift and Shift', you migrate your applications and data without any data manipulation or system redesign beforehand.
While this probably seems like the most simple option, complications can occur. If the data coming from your legacy systems relies on older architecture, it may not be compatible with the cloud.
As a result, a rollback might be necessary, as well as a redesign of your new system. Both will affect the cost and timeline of your migration project, so it's good practice to examine your data before implementing this.
2. Replatforming your legacy systems with PaaS
Platform as a Service (PaaS) provides a complete cloud environment with development capabilities. It includes everything from servers to middleware and supports building, testing, deployment and more.
Common platforms are Azure SQL Managed Instance and SAP on Azure, and both are highly compatible with the latest SQL database server. They can easily run the enterprise applications you need to track orders and receive online payments, so they're both good options for re-platforming your existing legacy database.
As PaaS is pay-as-you-go, you don't have to purchase software licenses and development tools, which makes it cost-effective. However, as it's multitenant architecture, there are more security risks. If you're planning to process sensitive customer information and financial details over your new platform, make sure to upgrade your cybersecurity first.
3. Integrating legacy data into the cloud
Integrating your legacy data will simplify it for better data insight, as well as providing a singular point of access in the cloud. This is often an attractive option for companies with multiple legacy systems who wish to consolidate their data and applications.
Here are the most common ways to approach this:
Middleware connects the applications in your pipeline and automatically transforms the data flowing between them. With middleware, developers don't have to build a custom data integration every time. But while it facilitates the publishing of data, it does not in fact execute it.
Extract, transform, load (ETL) will publish your data, as well as extract and transform it. However, you still have to define the right parameters at the querying stage to ensure the data you're extracting is relevant.
Data integration takes it a step further by automating the querying process. You can implement this on a large scale, which is useful for national and international retail franchises with specific input protocols. It's when there aren't company-wide standards that issues can occur. Separate departments inputting incorrect and duplicate data will mean you can't trust the information you're gathering.
4. Migrating to microservice cloud architecture
Microservices are small software services owned by different departments and deployed independently. Because they're small, their code is relatively light, positively impacting build and test times. And when developers want to implement updates or modifications, they can do so on a granular level without reconfiguring the entire system.
Microservices communicate seamlessly with one another over Application Programming Interfaces (APIs), combining and working as one complete application when needed.
Together, microservices and APIs allow for easy integration of new features throughout your systems. This results in an agile federation of cloud-hosted apps and services and a holistic view of your customers across all channels.
That said, there are disadvantages to microservice architecture. Testing can be carried out on singular units, but not on the system as a whole. Costs can be high too, with support necessary for both security and maintenance. In fact, you might need to employ specialised staff to manage what is likely to be a very complex system.
Consider your options carefully before selecting your migration strategy. Choosing the one that's right for your business will allow you to avoid the pitfalls listed above, and take advantage of the cloud's many benefits.
Agile retail and better business
The advantages of cloud migration don't end with improved retail systems.
Its flexible, pay-as-you-go pricing makes it a cost-effective option. This is because you avoid any large capital expenditures that you can incur with on-premise systems. Automatic updates and minimised downtime makes it more time-efficient, too.
And there's also the advantage of freeing your business from a legacy system that isn't providing what you need. So you can get the technologies you want when and how you like.
All of this makes for more agile systems and a better business model.
Let's take a look at an example.
Bringing data value to a top supermarket chain
This chain of British supermarkets had come a long way from the egg and butter stall it started out as, but it still had a bit to go.
Its legacy systems weren't adapting to changing business demands. And the data it had captured was so vast, it was difficult to derive value that would allow them to improve customer experience and overall efficiency.
Mastek answered the challenge by building a comprehensive data warehouse and implementing tools to improve the company's data analysis. In addition to this, we provided them with a better understanding of their customers by bringing easy-to-use customer insight dashboards to over 30 stores.
With help from Mastek, the supermarket chain now extract and analyse only the most competitive data. This has resulted in a reduction of £2.3 million on average in costs each year and has allowed them to maintain their place in the top four of UK supermarket chains.
Become agile with Mastek
The many advantages of the cloud make it clear why you should migrate your legacy retail systems. But moving isn't always easy.
If you're not sure where to start, Mastek can help.
Our specialists will implement the best cloud strategy to make your company more efficient, cost-effective and agile. And we'll provide you with the analytic capabilities to benefit from in-depth insights long after your cloud migration is complete.
Contact us today to find out more.