The global COVID-19 pandemic has affected retailers of all sizes. Many have had to shift their operations to fully remote work, while others have had to close their doors and seek alternative solutions to continue serving customers. With teams becoming more disparate and more customers making purchases online, finance technology solutions have become necessary to keep business functions up and running in the short-term and set them up for success.
When the pandemic first hit and stay-at-home orders appeared around the world, we experienced a seismic shift in how retailers and consumers operated. Retailers had to adapt their normal day-to-day operations with storefronts closed and consumers confined to their homes. For those without an online presence, they had to scramble to bring operations online if they wanted to continue serving customers at-scale. Even those with an online presence likely had to adjust to cope with an increase in online sales volumes and fulfillment requirements. Regardless of each retailer’s unique circumstance, those using antiquated on-premises business systems or manual processes faced a steeper uphill climb in the changing retail environment.
Forward-thinking retailers have always understood the value of implementing technology throughout the customer-facing aspects of the shopping journey, but many still overlook the benefits of moving backend finance functions to the cloud. As businesses navigate the current pandemic and plan for the future, cloud-based finance solutions covering the entire shopping experience should be top-of-mind for those who want to disaster-proof the business for years to come.
By moving finance functions to the cloud, retailers can not only improve how flexible their business can be during times of rapid change but also provide a foundation for efficiencies and growth in the future. By putting outdated and manual processes in the cloud, retailers can benefit in several ways, including:
Increased operational efficiency
Traditional, on-premise technologies have provided many retailers with the capabilities to manage operations with little trouble for many years. However, as online shopping and digital commerce has exploded in recent years, retailers have rapidly expanded the channels through which they sell through, which has created a new set of capabilities to keep pace.
As recent events have shown us, consumer preferences and habits are quickly shifting toward a digital-first and, in some cases, a digital-only approach to shopping. In the digital age, on-premises solutions lack the necessary latency and redundancy to keep pace with the ever-changing nature of digital commerce, as well as the flexibility needed to turn business operations on a dime without significant inefficiencies and costly impacts.
Unlike on-premise solutions, cloud-based finance technology provides retailers with the added redundancy and latency needed to ensure that operations remain online during times of crisis or change. Likewise, business leaders can manage and make changes to systems from anywhere—in the office, at home, or on the road—which makes managing business operations in any climate easier. The added flexibility of cloud solutions enables retailers to make quick decisions, scale their business, and improve overall operational efficiency regardless of the factors impacting the retail sector.
Increased accuracy and risk mitigation
Retailers can also benefit from cloud-based finance solutions when it comes to compliance and mitigating business risk. When you combine digital business speed with the growing volume and variety of sales transactions happening on a global scale, you find that there has been an unprecedented amount of complexity added to tax compliance for retailers to manage. Similarly, tax legislation around the world is in a state of constant evolution, making it difficult to keep on-premises solutions and manual processes up-to-date with the changing rules and rates.
Cloud technology leverages machine learning and automation to ensure that every tax change and transaction type is updated in real-time to ensure that every transaction is compliant. Plus, if this is the first time a business is moving online, it will likely attract customers from outside its local area. That opens businesses to a need to manage a whole new set of remote-seller compliance obligations.
Beyond risk management, cloud solutions also improve accuracy throughout the checkout process. Retailers can make sure that every transaction is not only charging the right amount of tax but also easily integrate with shipping and fulfillment and payment technology to optimize every shopping cart.
Increased data visualization
The modern retailer is likely to be already using several disparate business systems to manage day-to-day operations. From point-of-sale systems to supply chain management, most on-premises systems operate in a silo. An inability to manage and aggregate transactions and other kinds of business data across systems immediately places retailers at a disadvantage in an increasingly digital world. With cloud technology, retailers can integrate multiple platforms to increase the visibility of data from different sources across the business from websites to online marketplaces to in-store retail. For example, a retailer can better understand which products are selling the best in-store and online to streamline their supply chain costs.
Data visualization also provides retailers with the insights necessary to make business decisions on an ongoing basis quickly. During a time of uncertainty, retailers can rely on their transaction data to identify which areas of the business can be adjusted to keep pace with the changes. For example, during the current state of stay-at-home orders, retailers leveraging cloud technology could easily understand the shift in buying habits and ramp their online operations promptly.
When many businesses are focusing on serving their customers in the best way possible during a global pandemic, it can be challenging to give thought to what areas of the company could benefit from technology investments. However, the move to cloud-based finance functions will not only help retailers weather the current storm but also lay a foundation for continued resiliency in the face of future societal changes. Retailers can expect to see a return-on-investment and gain greater peace of mind by automating the finance aspects of retail to give their business the flexibility to change and infrastructure to grow.
Avalara Inc. is a provider of tax management software.Favorite