Integration in Retail: Are we looking at the right issue?

During the last decade?? & half, I have met dozens of retailers?? around the global, as employee, as consultant, as sales person, as advisor et al. One of the consistent theme that I have come across is "Integration". And this is not functional or business integration but technical integration. "We have too many integrations, can we consolidate them", "Can we move away from point to point integrations", "Is there a common best practice in the industry for integrations?", "Is there a middleware that supports most of our integrations?"

And answer to all of these questions is "Yes", but are these the right questions? Are we looking at the right issue?

But before I try and answer that, let us look at the implications of "integration" issue (the WHY?).

1. Scalability of solution: Integration typically limit the scalability of the solution both functionally as well as technically. There are numerous examples of the same in every micro-vertical of retail.
2. Limited flexibility & slower time to market for M&A IT integration: Retail recently has seen a lot of M&A activity, and every time the IT integration is slowed down due to technical challenges. This limits the visibility across the combined entity and makes the overall optimization a painful task with guessing in the dark approach.
3. Speed of Business Transformation: For retailers, IT is not he business but, it is an enabler or if I may call, a Transformation tool. In last 2-3 years retail has changed faster than ever. The entire shift from brick & mortar to Omni-channel has happened at unprecedented speed, and so does the need to have single integrated platform (integrated????)
4. And age old issue of Single view of inventory & Single view of customer : I will not drain this, as there has been lot spoken about this.
5. Last but not the least, this has limited retailers from building a true Omni channel commerce offering at a the speed of light. 

Now let us try and understand how did we reach here and if this is a business issue or technical issue (the WHAT?):

1. Retail IT landscape had always been a best of breed solutions. How many time do you go to your Enterprise Architect (or someone who is custodian of the solutions) and ask "Can you send the latest Magic Quadrant for XXXXXX planning solutions?". Sounds familiar, right!
2. Lots of retailer have gone thru Mergers, Acquisitions and Divestitures during their lifetime, there by increasing the number of systems they use for running their business.
3. Lot of solutions have been build in-house, so they are not on the same platform or migrating an existing solution to a single consolidated platform is too much risk.

Could the software vendors have done things differently or simply done better job to address this? Well, we will talk about it in some other post, I think, it needs a post by itself. 

Let us look at what can be done to address the "integration" issue (the HOW?):

To my simple mind, answer is far more simpler, just get rid of "integration". I know, it is easier said than done, otherwise everyone would have done it already. Hence, let us segregate the solution into three buckets, namely, Remove, Reduce & Recycle:

1. Remove?: Build the Digital Core, move as many applications from planning to execution to analytics to a one single monolithic platform. Select SAP or Oracle or Microsoft or whatever fits in your long term technology stack strategy. Not only should the digital core be strong enough to handle the data volume and user volume, but also, but it is also designed to minimize the data creation and parallel user access.
2. Reduce ??: Rationalize the applications, if you have selected a COTS product which does not have a small functionality out-of-box, consider custom development over selecting or building another product. 
3. Recycle ??: Use Hub-Spoke model of integration wherever possible. E.g. If you have ten 3PLs bring them all on single mode of integration in terms of patterns.

Would like to hear your thoughts and if you would like to have a discussion about your integration issue, please don't hesitate to reach out to me, as always!

View expressed here are my own.