Telecom Retail Technology:

The False Economy of Legacy and In-House Solutions

Enterprise-level telecom retail businesses, from carriers to retailers, need to avoid these three mistakes when it comes to their technology stack.

It’s an easy mistake to make: to choose the path of least resistance, which often means staying with the devil you know. 

It happens to the best of us. You’re busy running an enterprise-level telecom retail operation, and your technology stack isn’t doing what your business needs it to. Perhaps it’s outdated, or a mass of integrations, or it’s simply suboptimal for requirements. 

What to do? You need a radical change but aren’t sure where to go or what’s even possible within budget, and now everyone is used to the status quo no matter how frustrating and heavy it is. Perhaps you’re too busy to make what can be a time-consuming process with substantial lead times, until it’s too late and then you’re stuck with what you’ve already got. On the flip side, if you’re not getting everything you want, it’s often tempting to take everything on yourself. 

All three of these scenarios can result in anything from poor experiences to outright disaster. And all are extremely costly. You only have to look at the April/​May 2024 catastrophe experienced by London Drugs, when this major Canadian retail brand had to close all its Western Canadian stores due to its outdated tech stack being unable to withstand a cyberattack. 

In this report, we’ll break down these three dangers and their costs — plus the solution to these problems: 

For even the most process-efficient among us, it can be tempting to stick with the status quo for an easier life. When it comes to major IT implementation, which can be time-consuming and expensive, the devil you know can often feel like the obvious choice.

And what exactly is the devil” that most enterprise-level telecom retail operators know? Often, it’s working with a messy spaghetti bowl tech stack of systems that are a combination of legacy solutions, plugged-in systems from mergers and acquisitions, and one-to-one integrations. The kinds of systems that you feel stuck with, and that your established staff understand, but newcomers are bewildered by. Multiple logins and interfaces, multiple different processes, and a total nightmare when anything breaks.

Sometimes, it’s simply working with sub-optimal retail management technologies that don’t offer everything your company needs, but they’re what you and your team are accustomed to, and they’re cheap.

And, more often than you’d think, it’s about not knowing that there are far superior alternatives out there. Even enterprise-level operators such as major telecom carriers often don’t know what technology solutions are available because they’ve been using sub-par or legacy solutions for so long.

All these familiar-sounding truths are supported by research on IT spending. According to Gartner, the growth rate for worldwide IT spending was 3.3 percent in 2023 – below the rate of inflation in most countries, which represents a net decrease in IT spending. And, while application modernization is cited by 87% of IT, security, and executive leaders as critical to digital transformation success, some 42% are experiencing budget constraints to fund such initiatives.

Caoimhin Smyth, Vice President of Business Development in Canada at iQmetrix, observed, Retail is the pointy end of the spear when it comes to operations, but it’s a business area that often has no say in how that spear works. They are forced to deal with the result of wider technology decisions, for the most part. They’re the ones who feel like, Someone in IT thought this was a great idea and now I have to figure this out.’”

It can feel tough to justify capital expenditure on new systems when it works okay” as it is.

Expense is the inevitable first hurdle to replacing sub-par or legacy systems — actual monetary expenditure, and the time and effort needed to put new systems into place.

Research shows that most of the average IT budget is spent keeping existing technology systems operating. A report from Dell estimates that organizations currently allocate 60-80 percent of their IT budget to maintaining existing on-site hardware and legacy apps, which leaves only 20-40% of the budget for everything else.

However, trying to cut costs by sticking with poor and outdated systems is usually a false economy that can end up costing you much more.

It’s hard to put a price on the security of your business or customer data — but you can try.

Legacy or otherwise insecure systems leave enterprises exposed to cybersecurity attacks and data breaches from hackers looking to exploit vulnerabilities.

  1. According to an IBM report, the global average cost of a data breach reached $4.45 million in 2023, which represents an increase of 15% in three years
  1. New data breach reporting requirements for telecom went into effect March 13. Changes now include inadvertent” breaches. Companies are required to report within 30 days.
  1. In a data survey by Hitachi Vantara, respondents say that data is their most valuable asset but are concerned about the security and resilience of their data infrastructure; 71% are concerned they cannot detect a data breach in time to protect data; 65% of respondents are concerned whether their organization’s data infrastructure is resilient enough to recover data from ransomware attacks; 27% of respondents admitted that important data was not backed up; and 35% had experienced data inaccessibility due to storage outages.

Even harder to quantify, but essential to consider, is the opportunity cost of using suboptimal systems.

Relying on dated or basic technology limits the pace at which any enterprise can innovate. Then throw in the complexities of telecom retail, and it becomes incredibly hard to stay ahead of the ever-increasing competition. Especially when you add in the carrier and indirect authorized retailer channel divide, the need to control brand experience across channels, as well as added complexities around bill payments, carrier pricing plans and changes, rate plans and terms, financing, trade-in and other add-on options such as warranties and device care. There is a need to reconcile commissions back and forth between carriers, retailers, and sales associates. There is also added regulatory red tape and even more requirements when it comes to security and compliance. 

There is the seemingly elusive goal of significantly reducing the time it takes to activate a phone for the customer while the buying experience itself gets more complicated. Not to mention there is the need to integrate all the various disparate systems between carriers, retailers, and countless vendors. All within a relentlessly changing industry, in which customer expectations are constantly evolving, new players are gaining market share, and device purchasing cycles are lengthening.

Indeed, while today’s communication technology often feels effortless and seamless, the same can’t be said when it comes to the experience of buying and activating a device. Telecom retail operations — especially on the enterprise side — are often notorious for creating a disconnected experience. And a lot of this is down to the substandard technology that is still being used, preventing that enterprise from creating a great customer experience.

The use of older or substandard technology can actively prevent telecom retail operators from innovating, because the tech stack doesn’t support it, or they’re simply not aware of what’s possible.

Smyth explained, When it comes to enterprise clients deciding whether to replace sub-par technology, there’s a bit of an if it ain’t broke, don’t fix it’ mentality, but also the understanding of we could potentially get so much more out of this by going another way.’ This is the struggle that some of our enterprise-level clients and prospects, largely major carriers, are constantly having. As we take them through the steps, they’ll bring us problems they think are difficult, saying brace yourselves’ — but our reply is invariably, yes, yes, we can do all that’.

Often their response is that it can’t be that easy, otherwise why would they not be doing it already? And they don’t realize we’ve already solved this 100 times. We’ll show them all the technological possibilities, and the response will be, That’s great in theory, but what can iQmetrix do in practice? And when can you do it by?’ And my colleagues and I will look at each other and reply, Literally all of it. And we can do it now.’”

We’ve spoken about the pain of working with older tech stacks and sub-par solutions, but what about systems that are truly near the end of their lifecycle? 

While still functional, using outdated legacy systems is highly detrimental from both a technical and business point of view. Particularly in telecom retail, which has its unique complexities that make smooth integrations essential, it can create terrible customer and employee experiences that will lose your company both repeat business and skilled workers. 

As legacy systems reach a point of limited or discontinued vendor support, the costs of support also begin to soar. With these older technologies falling out of favor and talent retiring — that one guy who understands the spaghetti bowl of systems could leave — organizations will likely incur higher maintenance and licensing costs for legacy systems. Your business will end up paying for additional time and resources taken to make changes due to various limitations with unsupported systems, lack of skills to make those changes, undocumented and unstable code, and impact to retail operations due to the delay in providing new functionality or fixing old issues — to name just a few issues. 

In addition, talent costs are much higher on legacy systems. Not only are the costs exorbitant in person-hours, but unlike on newer systems, they often require skill sets that are expensive and difficult to find. 

Don’t fall prey to the perils of procrastination and analysis paralysis. 

We’ve considered the costs of doing nothing, and sticking to the status quo of sub-par solutions and legacy systems. But what if doing nothing isn’t an option, because you’ve left it so late that the contracts on the systems you’re using are set to expire? 

Smyth explained a prime example. For one of our major carrier clients, their contract is coming up on the basic point-of-sale and retail management technology they use, which is not ours. For them, the cost of doing nothing’ is that they simply wouldn’t have a way to transact in retail. That’s not an option for them, so they have to find a solution. But it’s very easy to wait until the last possible second to make these decisions while you’re busy running your massive carrier business. The problem is, the longer you leave it, the fewer options you have. Your choice is either renewing a sub-par solution contract, or going with a better alternative that has the chops to integrate with your systems quickly.” 

He added that this is the type of case where the client might choose the ain’t broke, don’t fix” mentality. A client like this might feel like, This is fine as it is, it works, we have retail, so why would we change?’ But a lot of these companies are simply not grasping how far technology has come since they chose their current system, and where a company like iQmetrix is at with Interconnected Commerce, and integrations and seamless transactions and all the higher-level systems. If you haven’t been with us and followed every step of our 25-year history, you probably won’t realize how far ahead we are.” 

iQmetrix’s conversations with industry players continuously reveal that many enterprise-level and large telecom retail operators have an unending list of retail technology gaps that make them feel they will never get out of tech debt. But it doesn’t have to be this way. 

How does Interconnected Commerce solve these issues? 

By using an end-to-end retail technology solution that is modular, flexible, and wireless specific, telecom retailers can rid themselves of the burden of tech debt created by legacy and inferior solutions. Instead, they are free to focus on running their telecom business and creating the customer experiences they want, instead of being dragged down by their outdated tech stack. 

The ideal solution is a suite of technologies that offer all the elements an enterprise-level telecom retail business would need, while also offering modular elements and APIs where needed, using SaaS microservices architecture that is scalable, responsive, and flexible. This way, not only will the operator be able to innovate in their own retail strategies, knowing they have the technology to support their growth goals, but they are also 100% future-proofed against their tech stack becoming outdated. The technology being used thus keeps the business ahead of this relentlessly changing industry, instead of dragging it behind. 

Trish Sale, Vice President of Product at iQmetrix, said, One of the hardest things within telecom retail is the fact that there is so much weight that holdssets companies back with their old legacy systems that need to be far better connected. What they need is a solution that takes away all that gravity, all that friction that exists today. They need seamless integrations that enable, for example, a customer to easily activate a phone so that it’s not a painful, slow process. And that’s at the heart of Interconnected Commerce — we have all those integrations into all the players in the industry that can ensure your customer walks out of your store, or exits your e-commerce site, having had an uplifting experience.” 

To gain control of the above-outlined legacy system chaos and the customer experience, several major brands — including carriers, large authorized retail operators, and national retail brands — have tried to create in-house solutions. However, this move often ends up working against them. With every pain point they face, every industry change, comes a one-to-one integration trying to solve that problem. 

It’s an enterprise telecom phenomenon that works like a gravitational pull — that instinct to solve problems yourself because you know your business best. This is pulling companies toward perfectly rational decisions of building out their own commerce solutions and one-to-one integrations for every new project and problem. 

No carrier or authorized retailer wants to be a full-time software development company, and to be forced to maintain those hugely complex and expensive systems as well as run a massive retail operation and/​or telecom network. They don’t want to be weighed down in the details, held back by technology, or frustrated by a heavy tech stack. By trying to support all the day-to-day technology systems, they lose sight of the big picture. It takes them away from focusing on the more important things to them and their end customer experience. 

There are many other huge disadvantages to taking solutions in-house, from eye-watering expenses to can’t-sleep-at-night risks. 

Here’s just a handful of them. 

  1. Capital expenditure: Deciding to take a system such as retail management and point of sale in-house is staggeringly expensive and time consuming — far more so than transitioning to a new technology solution. It takes many years of development to stand up a new system that can support the highly complex needs and integrations of a high-functioning, enterprise-level telecom retail business. This is an incredibly expensive and resource-heavy undertaking.

    Not only that, you’ll be doing everything brand new for the first time, versus working with a technology provider that has already figured everything out hundreds of times over. Your company will make all the mistakes that have previously been resolved by a partner that is already an expert in the field.
  2. Skills costs: To develop and maintain your in-house solution, the number of highly paid, highly skilled technology personnel the company requires skyrockets.
    1. Ninety-six percent of IT decisionmakers report that their organizations are facing at least one problematic IT-related skills shortage [Source: Dell]

  3. Lack of system and partner integrations: Another thing that must be created from scratch when taking systems in-house is all the integrations necessary for today’s telecom retailer.

    Whether you’re talking about carriers having to integrate with all their authorized retailers’ systems, or a national retailer having to integrate with multiple carriers, or any other permutation, you’ll be forced to create them one-by-one — ending up with that spaghetti tech stack once more, except this time it’s all in-house and you have to maintain it yourself. Add to this all the different vendors that are essential to offer your customers, from warranty providers to trade-in vendors to accessory suppliers and much more — you’ll need to develop all those relationships and pull in the solutions. Whereas, all this has already been done when you go with a technology provider who has deep roots in the sector, relationships and integrations built over decades, and a massive ecosystem of integrated partners.

    Sale added, When you’re using Interconnected Commerce solutions, it’s no longer papering over the cracks between systems and suppliers, but instead truly connecting the all the various parties involved. Then you’re making sure that the customer walking out of the store feels like they had a singular great experience — a seamless process across the purchase of the phone, or their add-on services, or their accessories, or the activation of the device.”
  4. Compliance and security costs and risks: Companies face huge security risks in operating their own tech stacks, and can face massive fines for not complying with current regulations. Some 30% of IT leaders say their organization couldn’t fulfill regulatory audit or Freedom of Information requests because the data was unavailable
  5. Massive risk factors to innovation: Like using legacy systems, taking retail management technology in-house creates massive risks and barriers to innovation. One failed experiment or project could cost your business millions of dollars and unfathomable wasted hours.
  6. Under-utilization of data: One of the most common pitfalls is the failure to capture important insights and use the data effectively.

    Part of the problem is that many companies are storing data without the right strategy or data infrastructure tools in place. In fact, our study revealed that a significant number of companies store every piece of data, just in case, and more than half of their data is dark,’ or never used,” said Bharti Patel, Senior Vice President of Product Engineering, Hitachi Vantara. The company has carried out research that shows:
  • 55% of enterprises are struggling to derive meaningful insights from their data 
  • nearly 60% of U.S. companies are overwhelmed by the amount of data they manage and 76% are concerned their current infrastructure will be unable to scale to meet upcoming demands 
  • 61% of IT decision makers are already overwhelmed by the amount of data they manage; even more (75%) are concerned their current data infrastructure won’t be able to scale to meet their organization’s data needs over the next two years. 

Despite all the risks and expenses, some enterprises still choose to go their own way in an attempt to keep control and create custom experiences.” The mistake here is thinking you need to own the entire tech stack to make this happen. This is far from the case! 

One recommendation made at Mobile World Congress 2024 was to buy for pace and build what’s unique” — meaning to partner with vendors on the areas where your needs overlap with their solutions, to help with speed and agility, and only build in-house what’s truly unique to you. By using a modular, flexible technology solution such as Interconnected Commerce, this is not only possible, but easy. 

It’s clear that an enterprise-level telecom retail business should avoid using sub-par systems, delaying legacy solution updates, or falling prey to the temptation of doing it themselves. Going with a technology partner that is an industry leader is the only option for operators to stay competitive in a challenging industry.

  • SaaS technology partners such as iQmetrix who are truly leaders in their field bring deep understanding of the problems to be solved, and unparalleled experience in solving for countless wireless-specific challenges and issues.
  • Everything your telecom retail business needs from a technology perspective is already built and integrated, and all the relationships necessary for that are high quality and long established.
  • Using a modular, flexible solution such as Interconnected Commerce means you can keep some elements in-house where absolutely necessary, and plug in modular products and solutions where you need them.
  • For those who are looking to innovate but don’t want to risk their entire retail business to do so, you can use an expert technology partner that can work with you on your wishlist, as well as continuously ideate, test, and launch (or shelve) new solutions, features, and products to keep your business ahead of the relentlessly changing retail landscape.
  • Leveraging SaaS partners instead of reinventing the wheel allows businesses to focus resources on core service areas, innovating in their field, and creating outstanding customer experiences.
  • Repeatability and ROI: the technology replacement must result in ROI for your business, and by going with an expert technology partner, your retail operations can deliver on your essential business strategies using the same provider over and over again .
  • The long term will see massive savings on infrastructure and IT overheads, servers and server maintenance, upgrades, overtime for unplanned outages, and much more.
  • You won’t have to recruit, pay for, or train a huge team of IT personnel.
  • You can sleep at night knowing that your security risks and compliance issues are taken care of.

Smyth commented, As an enterprise telecom retail operator, whether a carrier or another major player, you’re an expert in what you’re an expert in. And we’ve spent 25 years becoming an expert in making retail channels effective, and growing and scaling large enterprise businesses using SaaS technology. Some major carriers are moving away from being telecom companies to truly tech companies, but the retail element is a whole other piece that they don’t have the expertise to do themselves. In the end, they want to enable the customer experiences they want, and to be able to grow retail long term.”

Sale added, Ultimately, using Interconnected Commerce means you’ll get the experience you’re looking for — and more importantly, create the experience that your customers are looking for.”