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High price tags of IT & software likely to thwart retailers

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An estimate reveals that IT spend in the retail industry is normally 1.65%, which would be 1.6 million for a 100 million turnover business. With the current credit crunch, retailers would find themselves exceeding the 1.6% margin.

With a fall in turnover, they need to focus on the cost management principles to reduce IT spend and contribute to a better business.

Retailers need to examine the systems and processes on how they do things based on IT and its cost, and explore the opportunities for change, including the overall business strategy and objectives.

Exploring different cost models is a great opportunity to benefit from new services like SaaS (Software as a Service) which gives instant access to the latest versions of software at a much lower cost then acquiring, integrating and maintaining it.

Or else, the much expensive IT would turn a 'millstone' around the retailers neck.

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