Private businesses can profit from technological innovation

THE consequences of not investing in new technology to keep pace with change are evidenced by the corporate failures of Kodak and Blockbusters to name but two businesses that continued with outdated models for too long and suffered the consequences. 
“Their underlying markets evolved dramatically and they didn’t innovate to enable them to compete with new entrants who had better technology to deliver to the end user,” says Adam Barraclough, relationship director in Yorkshire for Lloyds Banking Group.
Retail is a sector that has seen changes driven by technology possibly more than any other – particularly at the customer facing front line, where making the experience as easy and enjoyable as possible is what drives growth.
Those that are thriving in this traditionally tough market of high competition and low margins are largely those that have welcomed technological innovation as an opportunity to drive profitability.
The list of technologies that have impacted on the retail sector in recent years are near endless – from the obvious rise of online shopping and the encompassing logistics that sit behind that to smart changing rooms to in-store beacons which recognise shoppers from their mobile device and send offers to their phones.
 
Andy Brian, commercial partner at law firm Gordons, specialises in retail and he says it is a sector from which other industries can learn lessons.
“Technology innovations in retail often filter through to other sectors. Retail is at the coal face dealing directly with consumers in a very competitive environment,” says Brian.
[VIDEO: 864] Take the collection of customer data – which all started with Tesco’s Clubcard in 1995 – and the subsequent harnessing of that data to improve and personalise the customer experience.
Big data is becoming critically important to all businesses in terms of understanding who the customer is and what they want.
With new frontiers come fresh challenges and dangers – Brian warns that businesses must ensure that customer data is stored securely and that they have the permissions they require in order to use that data.
Much can be done to drive growth just by harnessing a company’s existing internal data if it is all centralised to show the ‘big picture’. Improved systems that integrate data should increase efficiency and ultimately deliver better customer service.
Andy Brown, of KPMG Enterprise Consulting, says: “Large systems are good as they mean all the data is in one place. The finance department can provide a lot of data but it is backward looking. Nirvana is to have leading indicators – that’s taking for example business development data and using this to identify and highlight potential future issues.
“For a construction firm, for example, health and safety data is a great leading indicator as a well run construction site from a health and safety point of view is well run generally. A poor health and safety record means a site is not well run and often indicates that there is a risk of not meeting the project’s objectives and timescales.
“There are a series of indicators to show it is higher risk, so it is not a complete surprise when things aren’t being delivered on time. That’s about joining up complex bits of data. Having one system makes that much easier.”
For many businesses investment in technology has until now been about helping to cut costs and drive efficiencies whereas Brown says that in the last year businesses have at last been saying ‘I need to grow’.

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