Operational sovereignty allows business leaders to stay in control of their data, how they access their systems, and how they keep them safe. It also allows leaders to make the call on how much they spend on technology. Business leaders should carefully consider deploying any technology that could limit their control.
As a business leader, you take charge and make changes that keep your business on track, but what if you discover that something is standing in your way? Always making sure you have operational sovereignty should be one of your top priorities, but, unfortunately, it’s something that you can lose sight of when you choose new technology.
It’s an important issue because retailers are doing business at a challenging time. The U.S. Bureau of Labor Statistics reports rising costs for energy, medical care, and some types of inventory, like electronics and home goods. The cost of labor is also increasing as retailers try to recruit and retain the best workers, according to the National Bureau of Economic Research. But all challenges aren’t directly related to your budget. Competitive pressures may be forcing you to do things a little differently, maybe with your rewards program or inventory management. Technology is supposed to help you overcome challenges like these, but you need to make sure that you don’t give up control when you look for ways to make processes more efficient.
What is Operational Sovereignty?
“Sovereignty” means absolute control, like the power that a sovereign (e.g., a king or queen) has. When you have absolute control, no one outside of your reign impacts your ability to operate. Operational sovereignty means you aren’t at the mercy of systems that prevent you from ringing in orders or accepting payments when their infrastructure or connectivity is down.
Where You Might Be Sacrificing Control
There’s no doubt that cloud retail technology can provide your business with a lot of advantages. It can let you control costs, help your employees work more productively, and give you the power to improve customer experiences. But when you choose new technology, you need to make sure you consider how it could impact your operational sovereignty, from who controls your data down to how your point of sale (POS) system works in the event of an internet outage or system-wide downtime.
Data
As a business leader, you’re responsible for data governance plans that ensure your data is available, secure, and usable. Using that data to make decisions versus operating on intuition will have a big impact on your success. But some systems put limits on what you can see, access, and use. For example, you might want insights based on data that a Software as a Service (SaaS) solution doesn’t let you see, and when you ask, the response is, “We can’t do that.”
Another issue to keep in mind is that some systems may require that you give data access to third parties. You need to pay close attention to the policies a SaaS provider or other solution vendor has about what they can do with your data. SaaS providers may be looking for new sources of revenue. They may be making money from your data.
Internet Dependence
If your POS system or other technology solution relies on the internet to run, think about what will happen if that connection goes down. If you operate on a cloud-only system, you have a big single point of failure that can bring business to a halt.
An alternative that lets you maintain operational sovereignty is an on premise embedded POS system. This type of system uses a network of POS terminals with no single point of failure. All terminals sync data, and this data redundancy prevents any data loss. When you have a reliable internet connection, you can back up data in the cloud. With an embedded POS system, you never have to pause making sales because your internet connection is lost or choppy.
Payments
You need to accept digital payments to create convenient checkout experiences. But you need a way to stay connected to your payment processor’s network to get approvals to keep risks low. With approval, you know you aren’t accepting an expired card or a charge made on an account with no available funds.You can work with a provider that allows you to accept payments in offline mode, but it’s best to find a partnership that doesn’t hold you to short time limits in case there is a long outage. You also can reclaim operational sovereignty by using mobile devices that connect through a cellular network to maintain the ability to get approvals.
Cybersecurity
An important part of operational sovereignty is only letting the people you authorize to access your business systems or see your data. Bad actors who want to attack your systems and steal your data always work to be one step ahead, but you don’t have to give up your ability to protect your business. Research your retail technology provider partners to make sure they prioritize security and to understand the kinds of safeguards they put in place.
Also remember that a setup that’s on-premises, like an embedded POS system, doesn’t give hackers a way in to infect it with malware or ransomware. When the system operates within the walls of your business with no internet connection, they don’t have a way to attack it.
Cost
A key element of operational sovereignty is staying in control of business expenses. Some budget items leave you little choice, like overhead costs or minimum wage. However, you can control technology costs. Some POS and retail technology solutions can have hidden fees or subscription fees that keep increasing. And if you choose to end a contract or upgrade, you may find there is a cost involved.
Before you move forward with any POS or retail technology purchase, make sure you look past the upfront cost to understand the total cost of ownership (TCO) and any risks that could impact your bottom line.
Where To Get Advice on How to Control Technology
Your ability to stay in control of your operations comes down to the decisions you make. Smart business leaders will look for advice from people who know their industry, available technology solutions, and any trade-offs that lead to more functionality or less control.
NCC’s resellers have the retail expertise that can help you hold onto operational sovereignty while maximizing the benefits your business gets from POS or other technology. Contact us to learn more.
