PAC Multi-Client Study Applications Modernization: The path to Omni-channel retail

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1 PAC Multi-Client Study 2014 Applications Modernization: The path to Omni-channel retail

2 What is Applications Modernization? Old World Fragmented application estates, sprawl caused by M&A activity, globalization Internally developed systems, internally managed Complex layers of integration Cloud adoption limited to peripheral, noncritical workloads New World Need to support digital transformation agenda and improve customer experience Increased use of standard COTS platforms Overhaul supply chain & logistics functions to drive speed and better collaboration Rapid development cycles to speed innovation Focus on apps visualization, augmented reality Wider use of SaaS for horizontal apps Core ERP/industry domain workloads move to private cloud Design Build Run Application portfolio assessment Cloud readiness audit Architecture design Application development and enhancement Systems integration Testing/quality assurance Application lifecycle management Workload orchestration Service management Applications security What is not included? Legacy applications maintenance and support, traditional on-premise systems integration and consulting services, traditional application hosting services (eg non-consumption-based models) 2

3 What is Applications Modernization? What is the challenge? Why is it important? One of the biggest challenges facing IT organizations in 2014 is that their applications estates are unable to support the current and future needs of the business. Ageing applications have become a major barrier against organizations adapting to the fast-changing demands of their clients, employees, partners and regulators. The ability to diversify the business, and transform the customer experience by taking advantage of new-wave technology such as mobile, analytics and social media is often held back by the ongoing dependence on inflexible platforms. How are businesses responding? As a result, many businesses are looking at how they can evolve their application landscapes away from legacy systems and towards more flexible architectures and delivery models. This is a highly complex process, and many are looking to external providers to help them understand the best and most appropriate delivery model (SaaS, public/private/hybrid cloud) for their different application workloads. They are also trying to understand the impact this will have on systems integration, development, testing & QA, governance, licensing and service management. How far along the journey are they? Many companies have already started on this journey, with PAC s latest research finding that businesses have already migrated between 5%-10% of their application workloads to the cloud. In most cases, this first phase has seen the adoption of SaaSbased salesforce automation or workforce management. The next and more challenging phase of the market will see organizations look at how they can move more critical workloads such as ERP or industry-specific systems to cloud platforms. 3

4 Omni-Channel Presents a Huge Applications Challenge for Retailers Major changes in lifestyles, demographics and technology are forcing retail businesses to provide a more convenient and flexible service, through an increasingly diverse range of outlets and interfaces. As a result, one of the main focuses over the next five years for step up from a multichannel to a truly omni-channel strategy. Omni-channel retail is about ensuring that organizations provide a seamless experience for customers across all these channels. Offerings, pricing and promotions need to be consistent across the board, essentially providing customers with a single account However, the move towards omni-channel poses some huge challenges for retail organizations, not least the investment required in technology, marketing and staff. A lot of these challenges are being laid at the door of the IT organization, which in many cases has only recently got to grips with integrating their primary e-commerce site with their store systems. Omni-channel is not just about having a consistent look-and-feel in terms of content and branding across the various consumer touch points, but about ensuring a seamless flow of data across what is typically a diverse and fragmented application landscape to gain a 360 degree view on the client. The move towards omni-channel retailing has become the biggest driver for investment in applications services in the retail sector. 4

5 Hypothesis 1 Omni-channel integration is at the top of the agenda for retailers as they look to provide a better, more seamless experience to their customers at time of unprecedented competition in the sector. 2 The IT organization within retailers is in a difficult place. On the one hand, it is charged with enabling the business to evolve towards omni-channel integration. On the other, the ongoing squeeze on consumer spending combined with escalating competition and store operations costs (energy bills, rent) means that there is huge pressure to reduce costs in order to protect margin. 3 PAC expects the fastest-growing area of retail IT spending to be standard third party applications, as organizations look to move from legacy and often home-grown systems, which can be difficult to integrate and adapt, and are dependent on skills which may no longer sit within the organization. 5

6 Added value for sponsors Sales and Lead Generation Support Independent, substantiated arguments for the customer approach Executive summary and the full version of the study (individualized with the sponsor s logo and profile) available for download on the sponsor s website Thought Leadership and Branding Positioning as relevant provider and thought leader in the field Branding through content marketing with substantiated and independently drafted content Extensive, measurable range and awareness among customers and partners and in the press Market Intelligence Up-to-date market insights and analysts assessments for your strategy development Exclusive detailed results for the sponsors, individual questions and special assessments possible Reliable information on investment plans and the use of selected technologies 9

7 About us! From strategy to execution, PAC delivers focused and objective responses to the growth challenges of Information and Communication Technology (ICT) players. PAC helps ICT vendors to optimize their strategies by providing quantitative and qualitative market analysis as well as operational and strategic consulting. We advise CIOs and financial investors in evaluating ICT vendors and solutions and support their investment decisions. Public institutions and organizations also rely on our key analyses to develop and shape their ICT policies. Founded in 1976 and headquartered in Paris, France, PAC is part of the CXP Group, the leading European research & advisory firm in the field of software and IT services. JC Bodhuin Partner UK Managing Director Matthew Page Account Manager For more information, please visit: PAC s latest news:

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