On Saturday, June 15th, Target had a system outage that lasted two hours and caused chaos in the store and online. This was not the first time Target has had software quality issues. Five years ago, on the same date of the most recent event there was a similar system error with the cash registers.
Software is taking over the retail industry as online shopping becomes more important and customers’ demands become greater. As a result of this need, guaranteed software quality has become necessary for system performance. Target has also had issues with data breaches in the past. Of course, In 2013 Target had their legendary breach where 110 million customers’ name, address, password and credit card number were stolen.
Data breaches due to poor software quality
Target is not the only company with these kinds of software quality problems. Macy’s had an incident with data security issues in 2018. Information such as address, email address, phone number and credit card number with the expiration date was stolen. This issue was caused by weak authentication in the system. Adidas had a data breach in 2018 leading to the compromise of customers’ contact information, usernames and passwords. While the issue was addressed, the company only disclosed there was a data security incident without further disclosure of how it occurred.
More on breaches in our blog post - “Is There Anyone Left to Hack”
Outages due to poor software quality
Software outages have become a common occurrence in retail as people begin to rely more on online shopping. That’s especially true on big shopping days like Black Friday and Cyber Monday. Websites have started to crash as consumers flood to their digital storefront all at one time. Macy’s payment processing system crashed on Black Friday in 2017 due to overcapacity. This led to customers only being able to pay in cash in stores and not being able to pay at all online. Amazon’s website had an outage during their big sales day, Prime Day, in 2018. Reports say there were glitches across Amazon’s services for hours – from Prime, video playback, Alexa and Prime Now. There is a common factor in each instance which is poor software quality. Companies can expect to see a decrease in performance and jeopardizing their software security when not giving enough attention to application robustness.
These are just a few of the instances of technology causing system failure. This happens more often than we think, and it causes companies to lose money and customers. Software has an integral part in retail now, and companies continue to rely on it for daily operations. Because of the important role software is playing in business, Retail executives need to pay attention to the robustness and quality of their systems.
Erik Oltmans, an Associate Partner from EY, Netherlands, spoke at the Software Intelligence Forum on how the consulting behemoth uses Software Intelligence in its Transaction Advisory services.
Erik describes the changing landscape of M & A. Besides the financial and commercial aspects, PE firms now equally value technical assessments, especially for targets with significant software assets. He goes on to detail how CAST Highlight makes these assessments possible with limited access to the targetâ€™s systems, customized quality metrics, and liability implications of open source components - all three that are critical for an M&A due diligence.