Paul Gaffney, chief technology officer at Dick’s Sporting Goods, is leading an effort to bring the chain’s software development in-house rather than rely on third-party tech vendors, according to a Wall Street Journalreport. The goal of the program is to give Dick’s the ability to create and control solutions that meet its specific business needs and, in turn, place it in a position of competitive advantage over rival retailers.
Dick’s decision to handle its own software was a controversial move for the RetailWire BrainTrust in an online discussion last week, with the strategy striking many as wrongheaded.
“Becoming a software developer when you have no core competency in it will distract from being a retailer,” wrote Phil Masiello, CEO of Hound Dog Digital Agency. “There is no competitive advantage to be gained from this initiative. Too many great development teams are already building systems far beyond what Dick’s can think of.”
“After decades in this business, I belong to the school that says: unless you have devised the better mouse trap, and no commercially-available software comes close to supporting your need, buy it!” wrote Bob Amster, principal at Retail Technology Group.
“It is a brave or foolish man who believes he knows better than everyone else,” wrote Andrew Blatherwick, chairman emeritus at Relex Solutions. “I thought most retailers had grown out of this some years ago. Technology moves too fast, especially in the dynamic world of retail.”
Mr. Gaffney, who led a similar effort at Home Depot before joining Dick’s, began by having his team tackle the retailer’s inventory management system. The goal of the program, which is about halfway to completion, is to create a system that would earn at least 10-times in annual revenue the cost of the eight-person team that developed it.
Before the end of the year, Mr. Gaffney and team are planning a complete overhaul of Dick’s e-commerce platforms, including how products are displayed online and how search, checkout and shipping estimates work.
Dick’s claims its systems are enabling the retailer to be more responsive to its customers and internal stakeholders, as well. In speaking with the Journal, Mr. Gaffney pointed to Dick’s ability to list new merchandise online within 30-minutes of breaking news, such as a team winning a championship. Previously, the same task took up to five days to complete.
Others on RetailWire’s BrainTrust didn’t dismiss the idea completely.
“My gut says, bringing it in house is difficult and resource-intensive,” wrote Bethany Allee, vice president of marketing at Cybera. “But they’re looking for something that is purpose-built for their business. If the tech isn’t available, they have to innovate.”
“It seems like a smart move on Dick’s part — provided that they can hire the right talent to execute the strategy in a cost-effective manner,” wrote Dick Seesel, principal at Retailing in Focus. “After all, who knows more about the specific complexity of Dick’s business than the company itself? As the demands for system development get more complex (driven by real-time inventory management and omnichannel initiatives), Dick’s is at least trying to control its own destiny.”
And Lee Peterson, EVP of brand, strategy and design at WD Partners, saw in-house software development as potentially offering some exciting, concrete advantages.
“Think of your insights team having the ability in-house to sort information and derive what they think is most relevant and apply it to the business they are intimately involved with — wow,” wrote Mr. Peterson. “When you consult or are a vendor to a brand, it’s like being a grandparent. But if you are the brand, you’re absolutely the parent. That metaphor really holds in this case.”