A Better Way to Budget for Next Year’s Hardware

01 Sep 2016

Purchasing new store hardware can deliver great benefits to retailers, whether it’s a brand new technology or an upgrade or replacement of equipment that isn’t performing its best. According to RIS News’ 2016 Store Systems study, two-thirds of retailers planned to increase store IT spending in 2016, with POS software and mobile POS their top priorities. There is no reason to think that pattern will not continue.

But going through the process of identifying hardware options, approaching multiple vendors, gathering quotes, and pulling all the numbers together in time for budget proposals can be hectic — and those choices may not be the best fit, a good deal or the most efficient way to acquire the hardware. Here’s why:

  • It’s fragmented. Many technology selection and deployment processes involve multiple vendors and pieces of equipment. Working with each one separately adds complexity, takes extra time and almost always means higher costs.
  • It’s scattershot. Dealing with several vendors of the desired hardware requires sorting through competing marketing claims and pricing structures. It’s hard to compare apples to apples and identify a range of options that will fit nicely into the current store IT environment.
  • It’s expensive. Whether buying directly or via a third party, a retailer’s one-off order can rarely scale to the pricing available to frequent purchasers with access to volume discounts.
  • It leads to lower TCO. When purchase processes are executed separately from implementation processes, retailers often end up acquiring large volumes of new equipment long before it’s needed, incurring carrying costs without delivering benefits.

The smarter way to acquire store equipment is to consolidate hardware research and procurement with implementation and support.

What is consolidated hardware purchasing and implementation/support? It means working with a single provider who can take a holistic approach to the process:

  • Purchase decisions are made in context of the specific needs of the environment, the implementation schedule, and the budget. Products are acquired as they are needed, taking advantage of the provider’s volume pricing.
  • The focus is on getting the solution that will deliver the best value over the life of the product, rather than just for a lower initial price. Providers often have easier access to demo equipment and can make good/better/best recommendations.
  • It includes consultative services: The retailer can take advantage of the provider’s extensive experience not only in acquiring store technologies through close relationships with a wide range of vendors, but in integrating them into real-world environments and servicing them over their lifecycle.
  • It can incorporate key implementation services such as staging, serialization, warranty enhancement, maintenance and repair, so the entire lifecycle is managed and administered by a single provider, removing complex management tasks from the retailer.

Retailers that take the long view of hardware ownership look at the entire lifecycle ahead of time, not just acquisition first and the rest later on. Level 10 customers have saved 35% and more by consolidating hardware purchases with deployment/lifecycle management. And Gartner found IT procurement professionals can reduce hardware costs by as much as 40% through processes that require the review, analysis and selection of maintenance and support plans that ensure that requirements match needs.

Approaching budgeting and acquisition with a long view pays off for many budget cycles to come.