Who Needs Enterprise Point of Sale anyway?

[andrew_jones]

Who Needs Enterprise Point of Sale Anyway?

Author: Andrew Jones, SAP Head of Store Solutions (Business Development EMEA)

When James Jacob Ritty patented, what was arguably, the first mechanical Cash Register in 1879, his design was borne out of a business need; that being the desire to reduce the amount of fraud being carried out by his staff. As the years have passed and the business needs of one of the most dynamic environments in the world have developed, so the features and functions of the Point of Sale solutions have developed along side it. Unfortunately, for the so called ‘best of breed' providers, the latest changes in the Retail Environment means that simply adding features and functions no longer meets the step change that is happening as a result of globalisation and diversification.

The Point of Sale solutions available today have been built on the basic principle that no matter what happens to any associated system, the Point of Payment must continue to operate. This premise can never change but the ‘island of technology' concept on which this approach is built has changed. Whereas historically the ECR and then the POS solution were designed to provide control of information in the store, the advent of globalisation has led retailers to think on a larger scale. Where corporate retailers have made acquisitions and merged to meet their global expansion plans, they have invariably acquired local store solutions. These solutions may have been implemented as ‘best of breed' to meet the local needs but invariably do not align with either the corporate central systems or POS solutions in other countries or regions. As a result, huge effort is required to ‘interface' these solutions to enable the retailer to have the global view they need to maximise their demand forecasting and logistics. This has been necessitated because until now no provider of Point of Sale software solutions has been able to deliver a truly global offering that could scale to their needs as the technology simply wasn't available.

For a number of years, retailers have utilised the power of global networks to maximise the capabilities of their logistics infrastructures. Integration of multiple systems to deliver real time information has helped the most successful retailers to improve their market position. The ‘island technology' of Point of Sale has always meant that the integration of POS into this real time Enterprise landscape has proved difficult to achieve. Client-Server systems, with their limited network service usage. resource-intensive operation and maintenance requirements do have a place in the diverse retail environment; provided they are appropriately interfaced to a host system, but more and more Enterprise wide solutions are required.

To fully achieve true integration, Enterprise Solutions need to be built from the ‘ground up' and not simply be ported from older Client/Server systems. New technologies such as J2EE, XML and Enterprise SOA must be utilised to deliver the primary requirement of any Point of Sale system; Availability.

Point of Sale solutions have been developed extensively over the past 20 years to deliver a huge scope of features and functions. The latest software solutions deliver the full range of functions but in addition the technologies will enable the solution to be delivered via various topologies to different store formats and retail fascias across the multi-channel within a single enterprise POS architecture. This is one of the abilities that fulfils the Step Change needed to align with the needs of modern retailing. The other Step Change that will ensure the alignment is the total  integration of the POS software component into the retailers ERP, providing real-time information exchange to and from the Point of Sale. This will allow the desire to turn the Point of Sale into a true Point of Interaction to be realised.

The modern global retailer requires Point of Sale systems to fulfil a diverse number of capabilities across their Enterprise Landscape. Not only must it be a Point of Payment solution that can operate in multiple languages, account for the fiscal idiosyncrasies of countries on various continents, scale to take account for variations in store formats and fascias but also provide a Point of Interaction with their customers who now shop via different channels and desire the ability to interact with the systems to make the choices they want from the services offered by the retailer. Different business lines acquired via diversification may mean that a single corporate retailer could have a range of retail outlets with apparent different ‘best of breed' needs; grocery, fashion, hard goods, beverage etc. In reality the retailer should implement an Enterprise solution that can be ‘configured' to serve each business line but where the application running behind the User Interface (UI) is common. This type of Enterprise POS Solution, perpetually integrated to the  main ERP, Finance and CRM central systems will provide the retailer with true business benefit.  

The key to success for a corporate Enterprise solution is its ability to be flexible. Historically, large enterprise solutions have needed to be ‘highly customised' via code changes to meet the demands of the functional requirements. This has led to, so called ‘packaged solutions' being modified to a point that the solution becomes unique to the retailer. This in turn leads to specific support requirements and the related issues of future development and integration being totally reliant on a small group of developers who understand what modifications have taken place. Retailers have long since realised that the effort required to maintain the integration from these ‘custom developments' is counter-productive, with some spending as much as 50% of their resource maintaining the integration that allows for relatively small improvements in the core capability of the application. The nature of the integration into the total landscape regularly means that even a small change in one part of the application can have unforeseen implications on what may appear to be a completely unrelated function in another part of the landscape. This together with a lack of ability to react to their diversification strategy with the same core application has led, both large and small companies, to reconsider their approach to ‘customer specific development' projects. Their ideal is a solution that offers high levels of configuration that can be carried out by either their own IT resource or their preferred partner without the need to endure high costs from the solution vendor. This in turn then forms part of a total architecture with committed perpetual integration to other key business application supported by the vendor.

Although integration is a key factor in deciding which enterprise POS solution a retailer should choose, it is also important to consider the scalability of these solutions. What is a good fit today may not be such a good fit tomorrow! To often the large enterprise software vendors provide only solutions for existing large organisations. With retail, what may start relatively small can soon become a global organisation with much larger requirements. As such Enterprise POS solutions must be capable of easily expanding the Enterprise Hierarchy and deploying the software without the need for costly integration development. The integration of Industry Standard tools that carry out these functions provides retail IT with the confidence that they can utilise the solution irrelevant of the corporate expansion plans.

To achieve this ideal scenario, the major players in the Enterprise Software market have expanded their solution portfolios to include Point of Sale applications. Some have been more successful than others at integrating the acquired offerings. When SAP acquired Triversity it was soon realised that the Enterprise POS solution aligned well with their existing SAP Retail offering.  SAP have now localised the total offering to a number of countries and have developed a Roadmap that will allow this offering to become a global leader in the market space.

There is no doubt that as retailers continue to diversify and globalise, they will need to include Enterprise POS solutions into their IT strategies to enable them to maximise the benefits of their current and future investment in centralised architectured applications. Retail is a dynamic environment but successful retailers know that to maintain market leadership they must build solid foundations on which to expand their businesses. Enterprise POS is a solution that is available today that can grow with the needs of the retail business.

It is the responsibility of Enterprise Software Vendors like SAP, to develop roadmaps that allow retailers to share the vision, whether that is to meet an immediate need or to satisfy plans within a 3 to 5 year horizon and beyond.