Are you living with Frankenstein’s monster?

Why retailers need to strive for an elegant system architecture

Do you remember Mary Shelley’s story of Frankenstein – who created a monster from the sum of many parts that eventually ended up killing its creator? It looked ugly too.

As I observe the retail industry, I see many retailers living with system architecture reminiscent of the literary monster. They have to cope with massive complexity, which they can’t control, and their businesses buckle under the continuing strain.

How has this happened?

In the past, it has been quite easy to secure massive IT budgets. This let retailers buy overpriced, usually non-retail-specific software, which needed massive effort to customise and took years to implement. Such retailers have assumed that big bucks had shown how serious they were about their IT.

These days, retailers tend to be much more frugal, but they still get easily tempted by the promise of the next shiny new IT thing that comes along.

How many decision-makers actually stop to consider whether they need that shiny new element in their tech stack, or whether they’ve simply been caught up in the hype? And how many have the awareness that the shiny new thing could further hinder their business instead of making it simpler?

Missing technology skills

It wouldn’t be practical to expect all senior retail executives to be technology experts. Yet, the most successful retailers have CEOs fluent when it comes to technology. Without such expertise at the top, corporate boards usually view the level of IT spending and investment as the key measures of retailer executives’ commitment to having great IT systems.

This explains why decision-makers operate on the assumption that retailers must spend heavily on IT to get the right outcome, or even just to keep up with the competitors.

Paradoxically, this has given some other retailers a strong competitive advantage, as they have managed to put in place good systems that suited their businesses really well, for a fraction of what their competitors spent.

Spending big and even bigger

The matter wouldn’t be so grave if the big spenders ended up with gold-plated, but solid systems. In reality, many experience serious IT issues, resulting in the runaway train scenario: someone invests heavily in a particular technology, what they’ve implemented doesn’t work, and more money needs to be spent.

This is a classic example of throwing away good money after bad. The people behind the initial decisions usually jump off the train just in time.

Stuck with a bad system, companies feel compelled to spend even more, trying to salvage what shouldn’t have been started in the first place.

The essential importance of architectural clarity

Most of the challenges described above stem from basic failings – a blurred strategic vision and lack of architectural clarity for the systems within the retailer’s enterprise.

In contrast, retail organisations with clearly defined architectural IT strategies stick steadfastly to their master vision, understanding what works well for them – whether it’s the latest must-have technology or even a somewhat antiquated system that still performs well.

Without such an architectural map to dictate a strategy, new systems and various add-ons and middleware keep creeping in – within the main business and in its various departments. Suddenly, one day you realise you have created a monster - and that monster can kill! We have all heard stories about retailers encumbered by their systems.

The trend to ‘composable’ and why it needs to be re-thought

In the world of IT, when people realise that they have ended up with something messy, they rarely question their approach and instead look for silver bullets.

Unfortunately, silver bullets don’t exist, so usually the solution ends up in the sphere of semantics – new terminology pops up, trying to make bad systems look legitimate. The latest lipstick on the pig comes under the heading of ‘composable’ systems, which replaces the somewhat worn-out term ‘best of breed’.

But, the problem of overcomplicated systems will not go away by simply re-labelling a mishmash of solutions that don’t work well together.

Let’s consider a car as the analogy – quite a complex piece of machinery. Cars vary in quality and price, but not a single car in the world has uniformly the best components. What makes a car great is the smooth way its components have been made to work together. The quality of the vehicle comes from the coherence and harmony of its components, not from how expensive, or how shiny and new some of its parts happen to be.

Clarity leads to power

Those retailers who stick to long-term business visions – like Ikea, Costco and Aldi as examples – have demonstrated impressive clarity of where they are heading and how to get there. They stick to their strategy, sweat their assets, and evolve their systems as they need to, not as the wider market or the latest IT fashion dictates.

So, if you have to live with your own Frankenstein’s monster of systems, how do you steer yourself out of the mess? Start by looking at your existing system components to figure out what does work and what doesn’t.

Like in the ‘Apollo 13’ movie, just after the ship malfunctioned - the man in charge asked his team: “What do we have in the ship that’s actually good?”

Once you make this distinction, you can start to think about how to remove the bad parts and get as much as you can from what you want to keep. Also, you have to stop repeating the mistakes of the past.

Please note that I don’t claim that the idea of ‘composable,’ or ‘best-of-breed’ solutions has no merit at all. Plugging in additional, specialist elements can be a good approach in some cases. But such solutions need elegant core architecture and well-designed, closely coupled integration in order to make such hybrid systems work as one.

The IT industry has been notorious for trivialising system integration. In reality, hardly ever can you just plug and play.

Ultimately, as you look to invest in technology to deliver better outcomes and efficiencies for your business, be aware that ‘composable’ doesn't mean agile either, despite the claims to the contrary. Agility means flexibility, but ‘composable’ or ‘best-of-breed’ results in the opposite – rigid systems. I recall The Economist making a comment a few decades ago about a high-end ERP system, equating the implementation of such a system within a retail enterprise with pouring concrete into the business. I was impressed with the precision of this analogy.

So, beware of a Frankenstein monster emerging from a ‘best of breed’ or ‘composable’ IT ‘strategy’, because once it comes alive, you will struggle to control it.

Victor Frankenstein certainly couldn’t!

ENDS