Analysis of a representative sample of over 400 medium-sized fashion and lifestyle companies has shown that companies with agile business systems have, on average, grown 200% faster and achieved 150% greater operating profit margin than their peers.

Successful fashion and lifestyle businesses are accustomed to reacting to the trends that will shape consumer demand. But these same businesses also need to be able to respond just as quickly to emerging new market opportunities and the challenges posed by rapid growth or new competition.

In reality, however, many fashion and lifestyle companies struggle to adjust their business processes and systems as quickly or as effectively as they need to. Simply put: they lack business agility.

All businesses need to be able to adapt to change. But fashion and lifestyle businesses need to be able to adapt more quickly than most. This is because, in this industry, the pressure for change is virtually constant. With every changing season, there are new opportunities and difficulties to overcome, including:

Managing growth

Different sized businesses require processes and systems. Therefore, an expanding business may outgrow its warehousing system or may need to implement an organisational restructure. Equally, an increase in size might make it more viable for a business to relocate quality assurance overseas or invest in a new distribution centre.

Responding to changes in the business environment

External factors such as changes in tax, government regulations, market demand and competition will almost certainly require change. For example, companies might need to respond to price deflation, the growing popularity of fairtrade products or the availability new, low-cost overseas production capabilities.

Implementing new business strategies

Whether a business wants to develop new channels to market, open stores abroad or launch new product categories, changes in process and systems will be inevitable to keep the business running efficiently.

Whatever the cause of change, fashion and lifestyle businesses need to be able to react quickly to sustain their growth and profashion protect their margins.

And this is precisely why agility matters.

Key issues

At the heart of every agile business are flexible processes and IT systems that can be adapted quickly and easily to support business change.

In reality, almost all business processes and IT systems can be changed – but it often takes time, demands substantial investment and places a strain on existing business operations.

For companies that wish to improve their agility, the key issue is not simply whether or not their processes and systems can be adapted in the future, but rather:

1. How much will it cost to make changes?

2. How much time will be required?

3. Will the quality of business processes and systems suffer?

1. Cost

Companies that want to improve their business agility need to be ready for anything.

This means that, when they design processes and specify new IT purchases today, they must take into account that their requirements will almost certainly change tomorrow. If they don’t, they could end up purchasing a solution that, after just a few years, either becomes obsolete or costly to adapt.

And that’s not good return on investment.

To minimise the cost of change, companies should try to reduce the complexity of their processes and systems, and standardise wherever possible.

For example, by implementing one solution, from one vendor, across all business functions, companies can instantly remove all of the complexity inherent with managing multiple applications, multiple data sources and multiple interfaces between systems. Making changes instantly becomes much easier and significantly less expensive.

If a company has a current need to update just one or two of its business systems, it will be a hard decision to replace them all with one new integrated solution. However, if it wants the best financial return for its business in the medium to long-term, standardising on a single IT system for the entire company is almost certainly the best option.

Clearly, it will be a challenge to meet tomorrow’s business requirements with today’s IT budget, but within just a few years, this foresight can pay dividends.

2. Time

But it’s not just about cost. The time that it takes to react to a new business opportunity or market change can – of course – be crucial. The companies that can launch new products to fill an emerging new market niche or implement a new strategy quickly are more likely to be rewarded with success.

Some processes and systems can take many months to adapt, absorbing the time of key staff and perhaps even demanding costly support from external consultants. Major initiatives like these can weaken a business and drain profits – but still not help companies to keep pace with change. By the time that they have adjusted their systems, their business goals and strategy may have evolved again.

The only way that companies can ensure that they will be able to change as quickly, and as frequently, as necessary is for them to implement processes and systems with robust flexibility built-in.

For example, many companies find that it can take weeks to create new standard reports. Yet, when business change becomes necessary, one of the first requests is often for new management and financial reports. Companies that prioritise agility will want to ensure that their chosen IT solution allows them to generate new reports on a whim, without having to create fixed new reporting formats.

The time required to implement change is often dependent on the time required to brief vendors and partners, benchmark industry best practices and train users. Companies can help to minimise possible delays by maintaining ‘partnership’ relationships with key suppliers and working closely with them at all times to assess and prepare for possible future requirements. Regular external reviews can also help companies understand their requirements clearly and therefore implement change more quickly.

3. Quality

One thing is certain. Making changes to business systems and processes should not in any way jeopardise their reliability and accuracy.

It is often tempting for companies to use spreadsheets, build interfaces and customise software to implement business changes quickly. However, these short-term measures can lead to system instability, loss of data integrity and inefficiencies that will gradually erode business performance.

Instead of developing their IT systems, companies can inadvertently weaken them.

To guarantee the quality of systems and processes, companies should keep bespoke developments and interfaces, in particular, to a minimum.

Many companies implement solutions that are perhaps ‘best-of-breed’ logistics, sales or warehousing packages, but then need to tailor them in-house so that they meet their industry-specific needs. And this instantly makes the systems both less adaptable and more prone to errors. Instead, companies in the lifestyle and fashion industry should seek out solutions that support the business processes unique to their industry - straight from the box, with minimal customisations.

Prologic Approach

Prologic has been working exclusively with companies in the fashion and lifestyle industry for over 20 years and understands the importance of business agility. We offer solutions and services that are specifically designed to help companies adapt quickly and cost effectively to new business opportunities, while maintaining strong control over their entire operations.

Improve your business agility:

• Remember that today’s business requirements will almost certainly change in the near future.
• Assess the cost not only of buying and installing a new IT system, but of making changes to it in the future.
• Elect someone to have formal responsibility for ensuring business agility.
• Buy into a solution that meets your specific industry requirements as standard and thereby avoid major customisations that impair quality and be costly and hard to adapt.
• Adopt one IT system across your entire business to reduce the interfaces that hinder agility.
• Demand the complete flexibility in reporting and financial management that a dynamic business needs.
• Conduct regular external reviews of your business processes and benchmark your practices against peers.
• Accept that change is inevitable. Be prepared.

Our integrated software applications span all aspects of the fashion business from design and sourcing to logistics and warehousing. All of the functionality provided is relevant to business needs today - and flexible to support growth in the future.

Our solutions are already customised to meet the specific needs of apparel, footwear and other lifestyle and fashion businesses and, as the industry environment changes, we change too. Every six months, we release upgraded software with enhanced functionality, which is available to customers free.

We work closely with our customers and can often develop new features to meet the requirements of a specific business. When we do this, we incorporate the customisation into the standard edition of the software, so that the customer can benefit from our ongoing support and warranty. In this way, our customers gain all of the benefits of customisation without the risk of impeding their future agility.

Our business analysts offer customers regular independent assessments of their business strategy and operations and can help them to improve their agility. We provide advice on industry best practices and encourage industry bench marking – all of which helps to ensure that our customers can respond quickly to industry trends and opportunities.

Thanks to this approach, Prologic customers are statistically proven to be among the fastest growing and most profitable in the industry.