Computerising Your Business

According to the 20th Annual Retail Technology Study (April, 2010 produced by Retail Info Systems News), the average retail business spends 2.24% of revenues on computerization.

Actually, the above figures include all IT spending. It does not actually specify what is included in IT spending. Many of the businesses surveyed are larger businesses and may or may not include items such as creating and running web sites.

I'm guessing that the average retailer should be spending about 1.5% of revenues on IT. So, a store doing about $500,000 in business should be spending about $7,500 yearly on computerization (including computers, software, support and maintenance).

I do have a "beef" with many retail store owners who do not treat computerization seriously. Many restaurants check the beef and tomatoes that they sell to customers extremely carefully. They try to give their customers the highest quality foods possible at their price point. I've seen hardware stores that give customers great customer service and keep an impeccably clean and fully stocked store.

These same retail store owners and managers hate to spend money on computers and software. After all, good tomatoes and a well stocked store bring in money. The cash register system just takes up space and is more a hindrance.

Maybe I'm exaggerating a little but I hate to go into a store using 5 year old equipment that is barely working. The computers are old and abused frequently because of the way they are cared for and where they are located. Even worse, people are always posting hand written notes over the front and back of their computer screens.

The point is, you do need an IT budget. You do need to set up a yearly budget for your computerization and upkeep. I think the correct number is somewhere between 1.5% and 2.24% of your revenues.

You need to replace your computers every three, four or five years. You need a method of fixing a computer that malfunctions. Perhaps you need a local computer service person who you can trust or a service contract with your computer manufacturer. EziWorx offers hardware with a 3 year warranty!!

You need some redundancy. If you have 4 checkout stations, you should have an extra one which will allow you to quickly swap cash drawers, printers, computers or other items that may have failed.

You should have a software maintenance agreement, including updates. EziWorx offers support and annual update plans on Cash Register Express and Restaurant Pro Express. But, it doesn't matter which point of sale software you are using. Part of your IT budget should include maintenance in case something goes wrong.

All retail stores need contingency plans. Most businesses are using a server which stores all of your data. If you are doing it right, you should have a second backup server which can take over in case your primary server fails. Your server is going to crash every three or four years. You need a backup plan. Your local computer tech person can make sure that you have a working redundant system that can take over in case of a computer failure.

That's where your IT budget goes. But, it's not all about spending money. Your point of sale system and IT budget can help bring money into your business especially if you are using loyalty cards and capturing names, street addresses, telephone numbers and email addresses that can be used to market to your customers.