Retailers who adopt a ‘DIY’ approach to IT maintenance risk ‘depleted budgets and poor service levels’
Many retailers are unaware of the true costs of managing their IT support and maintenance in-house and could end up depleting budgets well before the year-end reveals experts at retail IT service support company Barron McCann.
Cost-cutting continues to remain high on the agenda for many retailers and you only have to look at the current strategies of many of the UK’s big retailers to see the extent to which this is influencing expenditure. The “big four” supermarkets are closing stores and scrapping new store developments as they try to cut costs and react to a fall in sales (1).
In addition to this news, Barron McCann, who specialise in providing outsourced break-fix maintenance and managed IT services for retailers across the UK, has revealed an alarming rise in the number of retailers opting to bring their maintenance and support services in-house, only to find themselves in hot water several months later when budgets are depleted as the real cost far exceeds their expectations. The variable nature of internal costs compared to a fixed outsourced fee means that whilst bringing the function in-house seems to save money in the short term, those responsible for planning, budgeting and forecasting are often completely unaware of the trouble that lies ahead.
Simon Phillips, Retail Sales, at Barron McCann provides further insight:
“In addition to the cost element, the second biggest issue for retailers looking to bring their break-fix maintenance function back in-house is the sheer impact it has on internal resource. The nature of this kind of support is that it’s unpredictable and re-active, which leaves internal teams unable to focus on the more pro-active and strategic IT elements that are of equal importance for retailers, particularly those with a large number of stores. Service levels can also be affected if teams are limited. I know of several retailers whose current service level agreement for IT support call-outs from their internal team are over 7 days. In the fast paced world of retail, these kind of lead times for IT repairs and servicing are simply not practical and end up costing the retailer even more in lost earnings.”
What is clear is that many retailers are still struggling to find the right balance when it comes to their in-house vs outsourced arrangements. Research from Epson found that 72 per cent of companies currently own their printers, with 70 per cent managing and maintaining them internally, however 60 per cent said that they are already looking to move over to managed print services. (3). Whilst another report revealed that 93 per cent of organisations in the retail sector are outsourcing at least part of their IT estate to managed services, more than any other sector. The same research predicts that the amount of IT estates managed by MSPs in retail is expected to grow to 22 per cent by 2020, with each organisation consuming an average of four managed IT services (3).
“If you add up all the hard and soft costs going into different areas of the business, it means that for many retailers the ‘do-it-yourself’ approach to IT provision will more often than not work out to be more costly in the long run than outsourcing it. We want to make sure that retailers are fully aware of the cost implications of bringing functions in-house so that they can accurately assess whether it is the right decision for them or if it will end up costing them much more than they can feasibly afford,” adds Simon.
1 – http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11539976/Sainsburys-to-convert-supermarkets-into-non-food-space.html
About Barron McCann
Barron McCann is an independent IT service provider, specialising in secure installation, support and disposal of distributed IT systems. They have over 30 years experience in the implementation, transition and support of IT assets across multiple platforms and environments.
Barron McCann employs a team of over 170 engineers who are qualified to diagnose and fix retailers problems first time, on site, across the EU. Their network of over 27 Forward Stock Locations and 1,000 locked box locations ensure Barron McCann are able to position all parts in as little as 2 hours.
With annual revenues of £16m, Barron McCann is privately owned, profitable and financially secure. Founded in 1977, the consistent delivery of service excellence has earned the company a reputation for quality and has allowed them to grow largely via referrals into a business, which today employs some 225 employees.
Having no external shareholders or investors, Barron McCann is uniquely flexible in its ability to make, and act upon, firm and fast decisions. Having successfully completed five new acquisitions in 2013, the company is set for exciting development and expansion in the coming years, whilst remaining at the forefront of IT systems support.