Corporate Cost Cutting 101: The Retail Networking Budget

Fiscal budget responsibility for networking in retail has become fragmented. Under present day circumstances, ownership of the networking budget is commonly divided amongst many divisions within a retail organization. These divisions are rarely viewed holistically by the organization. For example, in many cases managing data, “plain old telephone service,” Private Branch exchange (PBX), fax machines, Wi-Fi, and burglar, smoke and fire alarms are delegated to various corporate departments, and are maintained on a decentralized basis.

As a result, few retailers genuinely know their actual spend on networking based on the isolation level of each individual budget. This has put retailers at a fiscal disadvantage, especially those who have bought into multiple contracts for systems that have, today, become bundled entities with a much lower cost of ownership. The overall added expense of this structure is often considerable, as there is no system of checks-and-balances and a unified figure of total networking expenses does not exist.

A silver lining to this cloud does exist, however. Thanks to technological innovations, several opportunities now exist to significantly shave down networking costs and the overall organizational budget. Prudent retailers should consider strategic adjustments in the following arenas:

Bundling and Cloud Capabilities

Major opportunities now exist to save on expenditures by bundling necessary vital services into one integrated package. This can include data, voice, Wi-Fi, video, fax, security, PBX, etc. Currently, wrapping voice, data, customer-and associate-facing Wi-Fi and security into one resilient cloud-based service is readily available on the market and provides an incredibly efficient alternative with significant cost savings compared to traditional offerings.

Further, by switching to Voice over Internet Protocol (VoIP) and PBX in the cloud, there is added occasion to centralize call routing and to establish low cost call centers that provide quick, professional and consistent customer service.

Data Centralization

Centralizing data can similarly contribute to cost savings, as it cuts down the associated expense of hardware and maintenance. Efficiency also comes into play, as consolidating multiple factions of a company into a single entity promotes faster service at a considerably lower cost.

Invoicing

An additional opportunity lies within the processing and monitoring of corporate and store networking invoices. Instead of handling the invoicing process in an uneconomical manner, retailers now have several updated invoicing options to consider. Opting to buy invoicing software or outsource the payment of networking and telecommunication invoices can be extremely advantageous from a cost and visibility perspective. This area has matured dramatically in the last 15 years and should be part of any network strategy discussion, as these tools and processes typically pay for themselves in the first 6 months of implementation.

Making the organizational adjustments necessary to execute upon these measures undeniably requires time and effort, and invariably involves various setup expenses. Nonetheless, incorporating these technological advances into your retail organization is sure to result in a leaner budget and sizeable long-term cost savings.

Walter Deacon

Principal
Walter has experience in both the retail and consumer packaged goods industries as an executive and consultant. His work as a partner at PwC Consulting earned him the Chairman’s Client Service award in his dealings with some of the firm’s largest clients. His experience includes planning, procurement, replenishment, logistics, allocation and customer marketing. He specializes in the strategic application of technology to retail and supply chain process.

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