What are your views on my following question in Retail IT.

1. Where are the next opportunities in outsourcing in retail?
2. How can IT service providers successfully secure renewals and win new business?
3. How big is the midtier opportunity and which vendors are taking a leading role?

It would be very helpful if you can share your thoughts on the same.

Thanks in Advance
Kiran BS

Indian Retailers seem to challenged with the cash flow issues due to restrcicted consumer buying. Aggressive promotions are quite visible, however, it is still not able to drive sustainable growth.
These business challenges are bringing in a lot of pressure on the 2009 IT spending and a lot of IT vendors have started revisiting their IT plans. As expansion has been put on hold-a lot of related IT spending is going to be directly impacted. In the exisiting ones, as there are closures-a lot of IT redundancy may get created.

- Optimization. This is in line with your thoughts on localization. It’s happening at the price, space and assortment levels. Retailers are looking for ways to develop more personal relationships with their customers. These analytical tools are the price of entry.. The problem is they’re expensive and they take serious analytical horsepower to make them usefull, both from the technology AND the human aspect. There are third parties out tehre who provide these services but in most cases they’re missing one or two pieces of the complete solution, mostly execution.

- So, Execution systems- In oder to execute store specific and customer specific campaigns and offerings retailers are realizing that their legacy systems for delivering price or merchandise data to their stores does not scale well to the new reality of millions and millions of intersections of space/location/customer/product. You’ll see some energy in bringing those systems up to par. This is a good place for contract work BTW. Fits the model perfect.

- Business Intellignece. This is the cost of entry for all these activities and retailers are in vastly different place on their level of sophistication here.

Really, there’s a sort of Masolow’s Hirarchy of Business Intelligence that says; if the top of the foodchain in analytics is Predicitive Analysis, below that is what iffing, at the bottom is reporting on history… I’ve come to the conclusion that organizations can’t go from the bottom to the top with out going though each of steps. So if you don’t have attribute data, or you don’t know how what iff scenarios, you can not predict your customers behavoirs on pricing changes. Even with external software packages.. you find you can’t verify the results…

Going forward BI is going to be a hot space as it’s the foundation for all of the above.

That’s my thoughts…. Keep up the good work Mr. Roster.