“Saved”: What does the excessive IT budget cuts in the store lead to?

Surely, each of you can easily, like Scheherazade, tell tales all night long about the consequences of the excessive savings of owners on IT. We also have such stories - below are six short cases on how our customers “saved” in their stores.

Case No. 1. Cheaper does not mean better

In the last couple of years, we most often had to save on equipment in the context of the Unified State Automated Information System (EGAIS) and  2D scanners. There are generally recognized manufacturers of this equipment (for example, Zebra Technologies, Datalogic), but some of our customers, when switching to work according to the EGAIS requirements, decided to save money and purchased cheap scanners of various Chinese names. As it turned out, these devices cope with the tasks with a creak: they do not always read excise stamps quickly and correctly, and are also almost inconvenient to set up, because they do not have drivers. As a result, shops had to deal with numerous problems in working with UTM - incorrect reading of the brand and the inability to sell goods or sending incorrect information.

Summary. As the saying goes, the avaricious pays twice: in order for the stores to meet the EGAIS requirements, our customers had to abandon the savings on 2D scanners and re-purchase them (however, they are already normal devices from reliable manufacturers).

Case No. 2. Long, expensive and painful

You can tell endless stories about equipment savings. Most often, it leads to incompatibility of devices. Suppose a retailer decided to build a POS terminal from the system unit of one manufacturer, the customer’s displays at the second. The main thing is to be cheaper. Formally, the savings are no more than $ 10-20 from a set of cash desks, however, it leads to the fact that the IT department of the customer or our specialists have to spend a lot of time to “make friends” the disparate equipment of different vendors.

For example, one of Pilot's customers - a chain of food stores - decided to purchase new POS equipment, choosing for this purpose some inexpensive supplier. His system units were cheap, but he kept silent about the compatibility of lots of iron: as it turned out, in the same supply there could be several system units with different component bases. This client choice came back when installing the software. Usually it is poured centrally from predefined images. But in cases of incidents with these system units and primary filling, it was necessary to install the operating system and drivers from scratch on each machine. As a result, when leaving for the installation, the engineer spent 1.5–2 hours on setting up each ticket office (and this time is usually enough to install software for the entire store).

Summary. In the case of our client, 15% of the budget saved when buying cash registers was spent on the time of the software installation engineers.

Case No. 3 Home version instead of business option

Another popular form of saving is saving on system software licenses. One of our customers used a Windows XP workstation as the store’s server. That is, with its help, a large number of network works were performed (management of cash registers, goods distribution, price checkers, video surveillance and scales). Although it is worth remembering that the regular home version of Windows XP can withstand no more than 10 simultaneous connections. And if such a design could still function on a store with two cash desks and an administrator's workstation, then a store with 4-5 cash desks didn’t work quite correctly: prices could not be unloaded at the cash desks, not all receipts fell into goods distribution. Such a “server” often refused to work, especially during busy hours.

Summary. We can say that the customer, buying quite expensive equipment for IT, saved on software, and the cost of licenses for him was much lower than the cost of this equipment. As a result, the savings resulted in losses associated with technical interruptions in the operation of the equipment.

Case No. 4. Misunderstanding of the importance of staff training

One of Pilot's customers - a grocery store chain - opening a new outlet, decided to save (and quite a bit of money) on staff training. And he taught me how to work with the  Profi-T cash programnot all cashiers, but only a few. The IT department hoped that for the days remaining before the opening, trained employees would transfer competency to colleagues, but they miscalculated. On Day X, it turned out that people who were “Pro-T” almost the first time they saw in the eyes and certainly did not know how to work with her were at the box office. And, besides, they do not understand the business processes that have changed due to the introduction of new software. As a result, the retailer had to deal with a huge amount of negative both on the part of customers and employees. Yes, and such an “economy” hit: it was a lot of returns and abandoned purchases on the day the new store opened. And this is also a reputation blow.

Summary. As a result, the IT department still had to organize emergency training among all cashiers. In the future, the experience was taken into account, and the network no longer had to deal with such a negative, and further stores opened with trained personnel.

For comparison, here is how the processes in stores with trained and untrained personnel proceed:

• in a store with trained personnel, approximately 100 returns take place on the opening day, in a store with untrained personnel - 150;
• in a store with trained personnel about 15 cancellations of checks occur daily, in a store with untrained personnel - 20;
• in a store with trained personnel, 100 cancellations of positions in a check can be recorded per day, in a store with untrained personnel - 300;
• cashier’s check speed in a store with trained personnel - 20 seconds, in a store with untrained personnel - 40 seconds;
• the number of checks in a store with trained personnel per day is 300, in a store with untrained personnel - 100.

Case No. 5. Ignoring recommendations is not an option

Once our software introduced one store of everyday goods, where decisions, including those related to IT, were made by the management related to issues of technology spending very mundane: why set up - it's just software, everything should work. At the same time, recommendations from both the staff of our own store and our specialists in setting up cash register software and business processes at a point of sale passed by. For example, management considered it unnecessary to breed the roles of cashiers and administrators in software. As a result, the very first results of the store brought tangible financial losses compared to competitors. The staff was not only wrong, but also, as it turned out, could not do without economic disruption by some cashiers.

Summary. Not surprisingly, management had to urgently eliminate flaws and take into account recommendations from IT professionals.

Case No. 6. In-house - not always better

There are retailers who are trying to save on the services of a contractor and solve some problems on their own. It is understandable - not everyone can immediately get used to the idea that, for example, the introduction of software, installation and configuration of equipment can cost about a million rubles. However, IT insourcing does not always possess the necessary competence for specific equipment in order to perform work efficiently and quickly. As a result, it all comes down to the fact that the initial savings on the services of a contractor lead to the expenditure of own resources. For example, one client decided to open a pilot store with our help, and the rest on their own. However, at the first completely own opening, he realized that, in addition to existing internal IT tasks, employees still had to spend a lot of time on additional ones. And the time it took It turned out to be many times more than what our experts spent on opening the store. For greater clarity, we give statistics: on average, our specialists spend 1 hour on installing and setting up one box office. For IT staff on the client side, this usually takes at least 3 hours.

Summary. Having lost time, part of the funds, the client eventually turned to us for help so as not to occupy the internal employees with the tasks of opening stores.

As you know, this story about how stores save on IT and what comes of it doesn't end there. We are sure that you had to deal with similar cases. If yes, share in the comments.