Great article. Thanks for posting it.
Cost issues ? A couple of aspects to it, likely ?
One might be a simple function of economies of scale. System wide deployment en masse on an accelerated schedule might enable some of the cost savings needed, compared to a more piecemeal deployment scheme that involves generating smaller numbers of devices over longer time frames with the same overhead. It might also mean that some of the "sales funnel" issues that we've pooh-poohed here for a year... contain solutions related to cost savings that can be gained from ramping-up to deploy in much larger numbers.
If there are firmly fixed costs related to production of specialized chips, you might still gain some cost savings from consolidation of functions... shortening the supply chain in production of the devices... but that also seems likely to create "chicken or the egg" type issues for ABSY... you can do it... but you need to pay for it out of sales, so you need the sales price/volume to support the cost of the current efforts plus the cost of the effort to reduce costs... so you come full circle back to ramp up and economy of scale issues.
Another answer might be had from the finance partner side of the equation... if there is a three year ROI you might use financing to better spread the cost over a longer time period, reducing the immediate obstacle of cost as a limit to making implementation decisions.
Otherwise, it becomes an investment issue, again, instead of a purchase finance issue, with a need for capital sufficient to enable bridging the gap in functions between current cost structures... and the necessary ability to support lower cost implementation on much larger scales. Sign the entire Staples system, Canada, U.S., Europe, and you need more capability to make it happen ? Sign Walmart, Costco, Best Buy, etc., too, and ??? Sales funnel vs. capability vs. finance vs. investment ? Of course, those are the sorts of problems you want to have... ???
Perhaps raises interesting questions, again, about the value of the business... and whether the needed cost saving benefits might be available from some particular business combination...
taking us full circle again back into finance issues.
There also might be other ways to extend the system functions to add additional value which might enable justifying the systems within current cost structures... or to simply generate greater recognition of additional value or potential value that exists but is not being considered...
Some of that comes from answering opportunity cost questions. If store management aren't required to focus as much effort on controlling inventory and shrinkage... what are they focusing on instead ? That likely explains why none of the stores opt to have the systems removed when asked... it frees management to focus effort on what they deem to be more important. Still, store priorities might not be those that most benefit the system wide bottom line which you need to justify the cost... so, there is a related systems management issue about how to optimize values that could be gained from the enabling efficiencies that are not being gained.
Similar potential, it seems, might be gained from integration of "other" chip functions... Poorly thought out, still, but might there be insurance cost reductions that could be made possible from some of the "other" functions... which would not reduce system costs, but would spread the cost into savings obtained from other areas ?
AI
