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Important Considerations for Retailers When Evaluating Cloud Services

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Retailers are generally not risk-takers when it comes to making investments in their infrastructure. The key difference is that systems and platforms no longer have to be built and run by the retailer. Retailers have several options with cloud services to use only what they need and pay only for what they use. This allows the retailer to focus less on technology and more on their business and operation. Being the best operator is what has defined many leading retailers for a long time.

Most retail organizations are already leveraging cloud hosting services in some capacity. Many retailers have latched onto some element that has created new ways to communicate and transact with customers, maintain data, scale the model of delivery and reduce the administrative burden of systems infrastructure. As cloud hosting services continue to grow, retailers will continually be looking at cost-effective ways to utilize the cloud.

Look before you leap. Understand what’s offered, and at what cost. Don’t find surprises after deciding to employ a cloud hosting provider. Due diligence should be part of any investment, cloud should be no different. Know the total cost of ownership and what happens when your business (employees, customers, transactions, markets, etc.) changes.

ROI. Make sure the investment makes sense. New or replacement system initiatives are easier to rationalize in some instances than a conversion of an existing system with sunk costs and life remaining in the product.

Regulatory. Make sure the regulatory concerns have been properly vetted. For publicly traded retailers, also make sure SOX topics have been addressed. Often, look for services that have some SOC certifications or accreditation. Make sure you understand the security measures offered.

Flexibility. Because cloud hosting is generally a shared set of resources, organizations may find the service limited and lacking the flexibility to meet specific needs. Systems that require significant integration, customization and extensions or modification may not be a good fit for some cloud providers. Furthermore, consideration for non-production environments such as testing, demonstration and development should be carefully planned.

Upgrade path. Subscribing to the latest and greatest software and service update is a double-edged sword. Getting the benefit of new features without having to invest in the development and testing of system releases provides organizations with more time to focus on core competencies. Subscribers of cloud services need to plan and manage the change associated with a provider’s upgrade path and related planned outages.

Service Level Agreements (SLAs). Read the fine print. If the cloud platform or applications support a critical business function that needs high availability, understand how the cloud provider meets that need and what happens should it fail. Make sure you understand how the environment can be provisioned to support growth and the timeline to do so. The most successful retailers stay abreast of emerging technologies and find practical ways to make it work for them.