StORES Magazine - September 2007 - (Page H1) Upgrading or Replacing the POS System If you’re considering an improvement to the backbone of your store-operations infrastructure, here are some issues to keep in mind. n the 2006 NRF/AMR Research Retail IT and Budgeting Study, 60% of surveyed retailers reported plans to improve or replace their current POS systems. This is of course fairly easy to put off—in the 2005 survey, nearly 90% of surveyed retailers said they were going to make a POS upgrade, something that obviously didn’t happen—but it seems likely that over the next 12 months or so, a great many retailers will decide that the time has come to address their point-of-sale capability. Factors driving this decision include: I Market pressure. Competition, both in terms of price and of widespread product and assortment overlap, is forcing retailers to differentiate by improving the customer experience. Both customers and retailers differ on what exactly constitutes an enhanced shopping experience, but high on everybody’s list is convenience—making the shopping experience faster and simpler through speedy checkout, rapid processing of credit and gift cards, and (where appropriate) self-checkout. All of those, plus a whole host of CRM functions, require the presence of an up-to-date, high-performance POS system. Internal data requirements. Retail operations are increasingly dependent on enterprise-wide tools such as ERP, performance management, forecasting, inventory control, supply chain management, loss prevention, etc. Rapid, timely, fine-grained sales data is essential to the proper functioning of any of these systems, as is a direct infrastructure linkage between the point of sale and the back office. If the POS system can’t accommodate these requirements, it limits the speed and effectiveness of the entire operation Store operating costs. A significant number of retailSEPTEMBER 2007 ers, while aware of these market and infrastructural issues, have postponed POS system upgrades in order to deal with Y2K precautions (some have been deferring it for a decade or even longer), Sarbanes-Oxley compliance requirements, enterprisewide systems implementations such as inventory or supply-chain management, or other more pressing issues. In the meantime, POS systems have continued to age, and require increased maintenance. According to the NRF/AMR Research study, the single largest reported jump in 2006 IT operating costs over 2005 Competition is was a 12% increase in hardware mainforcing retailers tenance, most of it for store systems, to differentiate and most of that for point of sale. The inby improving the customer creased cost of maintaining these older experience systems have become a drag on corporate and store-level IT budgets. Things to keep in mind If the time has come for you to do something about your POS system, whether making a major upgrade or simply replacing it, there are some factors you need to consider as you make your decision. H1 www.hp.com/go/POS http://www.hp.com/go/POS
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