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  • Writer's pictureIryna Manukovska

Retail Back Office Software Development: Stages and Success Stories

“There’s a big difference between making simple products & making a product simple”
Des Traynor, Co-founder of Intercom

Everyone strives to make a digital product understandable for any user. Therefore, development is a rather complicated and creative process, especially when it concerns such a powerful mechanism as retail. After previous research, the reader probably knows what retail back-office software is, why, and where sellers purchase it. Some of them use ready-made solutions if the last ones are suitable for business in all respects. But most companies, especially giant retailers, prefer development from scratch. Here you will discover how the procedure for preparing, creating, and implementing a new product is conducted.

Four Stages of Retail Back Office Software Development Cycle

Retail Back Office Software Development Cycle

Stage 1. Discovery

The merchant's internal digital transformation always requires the current situation analysis. Data about the retail back office conditions and company’s position allows for implementation solutions, determining the priority of their introduction, etc. Therefore, before choosing one or another product for development, back-office management should ask themselves the following questions:

1. How relevant is the existing back-office software?

It is needed to identify the less flexible, outdated components that should be replaced or improved in priority. Following Victor Kmita, CEO at, “Retail ERP, SRM, and Product Catalog are the back office software components usually updated first.” Thus, primarily, sellers should pay attention to the above systems' work.

2. In which measure all internal processes are staff and time-consuming?

The digital transformation’s purpose is to minimize human involvement in maintaining procedures. Earlier noticed that software development results should allow the retail back office to function without employees. So, initially, it's necessary to determine how long this path will be and what procedures should be started.

3. Are the staff ready for innovation and organizational changes?

Following McKinsey&Company, digital transformation is 2.7 times more likely to succeed in companies with fewer than 100 employees. Because of their size, these companies devote more time to their employees. They prepare staff for change and raise the awareness level. It directly affects the digital transformation result. If a retailer's personnel is not ready for software implementation, it is better to increase the level of its knowledge in parallel with development.

4. Are the goals for digital product usage defined?

The development result should be multifunctional and relevant for the next few years. The company must clearly understand what it wants to achieve by implementing new solutions. It often comes down to flexible solutions, which can be seamlessly implemented due to microservice architecture. However, there are situations where a retailer wants to avoid technical debt and develop new essential software; or transform an existing system with additional components without global changes, etc.

5. How did the coronavirus pandemic and war affect internal processes? What is the chosen strategy of human resources work?

Due to the last circumstances, the internal retail office also changed its functioning. In a short period, new approaches, like remote work, began to be actively used. They affect employee performance in a better way. Meanwhile, because of the recent circumstances, merchants faced significant challenges with the supply chain. In each case, it’s necessary to determine which of these changes should be additionally supported by improved programs.

It is not an exhaustive list of questions since everything depends on the particular company and the features of its activities. The obtained data is analyzed, and the current situation of the back office is compared with competing retailers in the market. There are dedicated instruments to make such research relevant, like a Process Classification Framework by American Productivity & Quality Center (PCF APQC).

Stage 2. Definition

Based on the above data, an internal retail IT team or a Solution Provider makes a plan or map along which the software development process will move. It determines the scope of work, task priority, deadlines, etc. The Definition stage usually takes about 4-10 months. The more thoroughly the team prepares for a new project, the lower the risk of mistakes made during development. During this period, an analyst, architect, project manager, and, sometimes, a UX/UI designer usually work actively. The first one analyzes the previously obtained information about the software operation. The architect chooses how best to design a solution and which architecture to choose (monolithic or microservice one). The project manager's task is to prepare the basis for team interaction within the project. A UX/UI designer is needed if it's necessary to show the client (company management) how the solution will look and work. Created interface design is suitable for this purpose.

Stage 3. Development

Development is the most labor-intensive period. IT specialists design digital solutions due to project management systems like Agile and Scrum. The size of the team working on a solution development depends on its complexity. The minimum number of specialists includes:

  • an architect

  • two or more backend developers

  • one or more frontend developers

  • a tester

  • an analyst

  • a designer

  • a project manager

The development of retail back office software components is always complicated and requires significant time. But on the other hand, developers can quickly design a Minimum Value Product (MVP) to demonstrate how the result will work in the future. The finished product is tested and adapted to customer requirements.

Stage 4. Delivery

The software transfer consists of two procedures: customer testing ready solutions and transferring intellectual property rights for the development results.

If the final testing reveals some issues or errors, the contractor must eliminate them. The transfer of intellectual property rights occurs by signing the relevant legal agreements and acts.

The above procedures are simplified, if the retailer’s IT team works under development. The internal staff tests the digital product. The intellectual property rights are transferred by default, following the general labor contract or service agreement between the retailer and certain IT specialists.

Retail Back Office Software Development: How Does It Work In Practice?

Digital Transformation in Retail Framework

Case 1. Contact Center and Order Management System for Department Store Retailers with software

The client needed to develop digital solutions that would allow to:

  • effectively managed by employees of both nationwide brick-and-mortar stores network and e-commerce platform

  • interact with partners

  • improve the experience of 26.6 million customers

At the same time, it was necessary to preserve the existing retail ERP software, making an auxiliary solution that allows it to receive continually updated information for transaction processing. Thus, new programs had to integrate seamlessly with the legacy ERP and other back office solutions. Specialists had chosen a microservice architecture to develop such flexible programs.

The result is an Order Management System and Contact Center that provide

  • seamless interaction between all back-office components, incl. accounting, logistics, as well as all online and offline stores

  • fast and error-free execution of transactions

  • reduction of ERP burden by 20%

  • cutback of the onboarding period for new employees by 70%

  • one-stop-shop interface

Case 2. POS back office software for convenience stores nationwide network with software

The customer ordered a multifunctional Point of Sale capable of managing all service equipment in over 390 convenience stores. The staff impact on the system operation should have been minimal.

The result of the XME-team efforts is a contactless POS system developed on a microservices basis. The end product has a wide range of functions and advantages. This Point of Sale system:

  • reduced the number of errors by 15%

  • provides an upselling possibility

  • enhances rules creation for automatic supply requests

  • manages the assortment

  • has a user-friendly touch screen interface for operators

  • quickly integrates with other station software products and equipment

  • works, considering the fact of the excisable goods sale

  • improves the customer experience as a whole

Best for Software for Retail Business in 2021

Thus, the development of software for retail business is always complicated. Its cycle includes four main stages, during which:

  • the current software operation is analyzed

  • the development process is planned

  • a digital solution is designed and tested

  • the result is transferred to the customer

Spent time and human resources directly depend on the chosen solution and the retailer's situation. However, due to modern technologies like the XME platform, IT specialists can shorten a development procedure and improve the digital product at any stage.

If you are looking for a reliable vendor that can provide you with promising results and convenient tools for their fast achievement, let us know! Our professionals will help you develop robust retail back office software in a tight schedule with the code platform.

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