Enterprise Resource Planning at Enterprise Resource Planning at Hudson’s Bay CompanyHudson’s Bay Company

Presented by:Presented by:

Gary DavenportGary Davenport

Vice President Vice President

Information ServicesInformation Services

• HBC Corporate Overview

• Enterprise Resource Planning

• ERP at Hudson’s Bay Company

Today’s AgendaToday’s Agenda

• HBC Corporate Overview Profile HBC in the Canadian Marketplace

• Enterprise Resource PlanningEnterprise Resource Planning • ERP at Hudson’s Bay CompanyERP at Hudson’s Bay Company

AgendaAgenda

Corporate OverviewCorporate Overview ProfileProfile

• Hudson’s Bay Company (HBC) is Canada’s oldest Corporation and largest department store retailer.

• Company incorporated in 1670 when King Charles II granted charter to 18 investors

• During 330 years of operations, HBC was involved in various enterprises from oil and gas to real estate to distilled beverages - eventually focused exclusively on retail operations

Corporate OverviewCorporate Overview ProfileProfile

• Over the years, HBC expanded through strategic acquisitions:Zellers in 1978Simpsons in 1979, merged into Bay in 1986-1991Towers in 1990 , merged into ZellersKmart in 1998

• HBC is the parent company of the Bay, Home Outfitters, Zellers, Zellers Select, Fields department stores and hbc.com

2000 Revenue of $7.52 billion

• Employs 70,000 associates and has operations across Canada.

Many

Few

Narrow Broad

HBC

Stores

Breadth of product

Walmart

Sears / eatons

Canadian Tire

Corporate Overview Corporate Overview Broadest Reach in Broadest Reach in Canadian MarketCanadian Market

Corporate Overview Corporate Overview HBC Treasure ChestHBC Treasure Chest

New Product

Lines

Increased Geog. / Segment

Scope

GreaterLongevity

Number of Relationships

AverageRelationshipProfitability

Per Year

AverageRelationship

Duration

Corporate OverviewCorporate Overview Positioned for Positioned for Future GrowthFuture Growth

• HBC Corporate OverviewHBC Corporate Overview

• Enterprise Resource PlanningERP DefinitionRetailer RequirementsTheory vs. Actual

•ERP at Hudson’s Bay CompanyERP at Hudson’s Bay Company

AgendaAgenda

ERPERP DefinitionDefinition

• Enterprise Resource Planning designed to improve shareholder and customer value by integrating manufacturing, financial and distribution functions to dynamically balance and optimize an enterprise's resources.

• Major vendors in this area include SAP AG, Baan Co., PeopleSoft Inc., Oracle Corp., Lawson Software and J. D. Edwards & Co.

ERPERP Retailer RequirementsRetailer Requirements

• Store Operations

• Merchandising

• Supply Chain

• Logistics

• Finance

• Human Resources

• Credit

“Retail is a little bit specialized in ERP terms because it characteristically has to handle very high transaction volumes relative to other ERP types of projects and so industries like retail, utilities, banking and insurance all have very high transaction volumes which have to be handled.”

Gartner Group

ERPERP The Theory vs. Reality The Theory vs. Reality

The Theory• One single integrated

solution with enterprise wide capabilities.

vs. Reality• Each technology provider has

their own respective area of strength.

• Companies still need to customize and integrate multiple ERP solutions with existing systems to maximize functionality.

ERPERP Implementing multiple solutionsImplementing multiple solutions

Pros• Best functionality for

each solution

Cons• Data duplication• System overlap• More integration

• HBC Corporate OverviewHBC Corporate Overview

• Enterprise Resource PlanningEnterprise Resource Planning • ERP at Hudson’s Bay CompanyERP at Hudson’s Bay Company

HBC’s ApproachHBC’s Approach Key Success factorsKey Success factors

AgendaAgenda

ERP ERP HBC’s ApproachHBC’s Approach

ERPERP HBC’s ApproachHBC’s Approach

I.S. TransformationImprovement Process Personal Mastery

Information Technology InfrastrucureComputing Platforms(Hardware/Software)

Communications Networks (Voice/Data/Wireless)

Personal Productivity/Communications

Email Voice Mail Handheld DevicesPCsWorkflow

Sup

ply

Cha

in

Mer

chan

disi

ng

Sto

re O

pe

ratio

ns

Fin

ance

E-B

usin

ess

Information Access and Decision SupportBusiness Intelligence

Executive Information SystemsReportingData Warehouse

Strategic Technology AllianceMicrosoft IBM Oracle

ERP ERP HBC’s ApproachHBC’s Approach

• Leverage information technology suppliers to expedite progress and reduce costs.

• Strategic Technology Alliance with:– IBM– Oracle– Microsoft

• Renovate HBC’s IT House and build “Retail Showcase”.

ERP ERP HBC’s ApproachHBC’s Approach

• Multiple ERP suppliers, chosen for their specific area of expertise, integrated with existing systems.

– Retek Merchandising System

– Oracle Financials / iProcurement System

Common &

IntegratedSupportSystems

ERP ERP The HBC PlatformThe HBC Platform

ERP ERP Keys to SuccessKeys to Success

• Ensure top management is united behind the business goals. Don’t start until you have top management commitment.

• Make business operations own the system.

• Do not underestimate the resources required.

• Be prepared for the Change Management effort required to support the implementation.

ERP ERP Keys to SuccessKeys to Success

• Be rigorous about Project Management and the implications of your partnerships with consultants.

• Do process re-engineering before and during the project…the system will require processes of the future, not the past.

• Focus and align your organization, team and scope…ensure you have a clear, common understanding of the objectives.

ERP ERP ConclusionConclusion

• Not a panacea, but a building block.

• Large and complex undertaking.

• Significant costs and benefits.

• Focus on the business first.