It and Retail

8/2/2019 It and Retail

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Information

Technology

and Retail


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Supply Chain Systems

Enterprise Retail Systems

Store Operation Systems

POS

Inventory Management

Workforce Management

Store-Level demand

Perishable Management


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Need of accurate information and make it available

to store, warehouse, distributors, etc.

Before it was used for recording of data of salesonly.

Today even individual customer can be served asper his needs as highly sophisticated IT systems are

available now.


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MANUFACTURING RETAIL E-COMMERCE

DataSynchronization

DemandPlanning

MasterPlanning

InventoryOptimization

AssortmentPlanning

ReplenishmentPlanning

Mark-DownOptimization

Store

Development

ContentManagement

Back OfficeIntegration

Supply chainTracking RFID Web site Analytics

ItemsManagement

PartnerCollaboration


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Efficient stocking of merchandise,

Collection of Data,

Efficiency in operations,

Helps Communication among departments.


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The scale and the scope of operations,

The financial resources of organization,

The nature of business,

Human Resources Available.


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What is an ERP System?

Why implement an ERP system?

How should ERP systems be implemented?

Conclusion


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Simplistic DefinitionERP - Enterprise Resource Planning

Detailed Definition

ERP (Enterprise Resource Planning) systems typically includethe following characteristics:

An integrated system that operates in real time (or next to

real time), without relying on periodic updates. A common database, which supports all applications. A consistent look and feel throughout each module. Installation of the system without elaborate application/data

integration by the Information Technology (IT) department.


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Requests Suggested purchase order

Blanket orders Receipt of Goods (ROG) Invoice verification

Materials provided Etc


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Quotations Sales order management

Blanket orders Sales order production list Shipping processing/Goods issuing Deliveries Invoicing


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Installing an ERP system has many advantages -bothdirect and indirect.

The direct advantagesa) include improved efficiencyb) information integration for better decision-makingc) faster response time to customer queries

Tangible benefits are those measured in monetaryterms and intangible benefits cannot be measured inmonetary terms but they do have a very significant

business impact.


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Tangible benefits: Improves the productivity of process and personnel Lowering the cost of products and services

purchased Paper and postage cost reductions Inventory reduction Lead time reduction Reduced stock obsolescence

Faster product / service look-up and orderingsaving time and money Automated ordering and payment, lowering

payment processing and paper costs


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Intangible benefits: Increases organizational transparency and

responsibility

Accurate and faster access to data for timely decisions Can reach more vendors, producing more competitive

bids ; Improved customer response Saves enormous time and effort in data entry ; More controls thereby lowering the risk of mis-

utilization of resources Facilitates strategic planning Uniform reporting according to global standards


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Obtain the right mix of people, processesand technology!!


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People Project Structure

Should be aligned to processes

Process Implementation Process (outlined in detail)

Adapt your processes to those of the ERP.

Technology Hardware

Software

Integrated Systems


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1. Definition and Analysis

Hold discussions with various functional personnelto establish the actual number of systems

operating at client site, what they are used for, whyand how often

Produce the Project Scoping Document outlining

current situation, proposed solution and budgetedtime

Challenge : REQUIRES EXPERTISE


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2. Design

Prepare various functional reports - specifies

current scenario and wish list Prepare Design document which specifies how thesystem is going to work

Prepare test scripts to be followed on system

testing Map out the interface paths to various modules

Challenge : INFORMATION SHARING -Availability of staff


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3.Build

Configure system as per set up documentspecifications i.e. transfer conceptual modelinto reality

Test system to verify accuracy (preliminarytests)

Challenge : TECHNICAL ENVIRONMENT -System functionality


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4. Transition Train users on their specific areas Assist in test data compilation and system

testing by users Finalise the Live system and captured openingbalances

Challenge : USER RESISTANCE Understandingand acceptancedata preparation


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Technology is an enabler, not the driver (it isthere to assist the organization to achievebusiness goals)

It is a means to an end, not the end


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ERP systems provide a mechanism forimplementing systems where a high degreeof integration between applications is

required.

To successfully implement, a proper mix of

people, process and technology should bemaintained.


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Legacy system could not handle 80% annual growthrate of Cisco. Constant band-aids to meet businessneeds resulted in the application becoming toomuch spaghetti.Systems outages became routine exacerbated by thedifficulties of recovering from outages.

CIOs View point-Each functional area had to make its own decision regardingchanging the legacy system and fund it.

-Not in favor of ERP solution because it could become a

mega-project


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January1994:

The legacy system crashed because a work around due to thesystems inability to perform malfunctioned, corrupting thecentral database.

Shut down the company for two days.

Autonomous approach to replacing legacy systems in Order Entry,

Finance and Manufacturing will not work.

SVP of Manufacturing took the lead-put together a team in

February to investigate the replacement


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1. Could not be an IT-only initiative

-Must have the very best business people on the project.

2. Need a strong integration partner to assist in both selection andimplementation of the ERP solution.

3. Selected KPMG because they brought experienced people tothe engagement, not greenies.

4. Team of 20 people tapped the actual experience of largecorporations and knowledge of sources such as Gartner Group

-Narrowed the field to 5candidates within 2days


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5. After a week of evaluating the packages at a high level, twoprime candidates were selected Oracle was one.

Size of the vendor was an issue in the selection.

6. Team Spent 10 days on the Request for Proposals. Vendors given 2 weeks to respond.

7. Visited reference clients of each vendor as part of due

diligence.

8. Vendors invited for a 3 day software demo.To show how software could meet Ciscos needs using sample

data from Cisco .


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9. Oracle selected because

Better manufacturing capability

Made number of promises about long

term development of functionality

Same location as Cisco

Total Time : 75 daysTime clock: May 1, 1994Next step: Board Approval


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1. Ciscos Financial Year: August 1-July 312. Constraint : Can not implement in Quarter 43. One option : July/August 1995

4. Rejected it-too late5. Worked back wards :

Qtr 3 System should go live

So it would be completely stable for Qtr 4

Target Date : February 1995Project Time : 9months


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1. Cisco had NO CHOICE but to move2. Three Options

1. Upgrade legacy system

2. Replace it in parts

3. Big bang implementationOne ERP solution for all systems in 9 months time

3. ERP Project Cost : $ 15 Million

Single largest capital project at the time

4. Justification :

- No CostBenefit Analysis.

-We are going to do business this way.

ERP System became one of Ciscos top 7 goals for the year.


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Executive Steering Committee

- VPs of Manufacturing & customer Advocacy

- Corporate Controller & CIO

-Oracles Senior VP of Applications

- KPMGs Partner-in-charge of West-Coast Consulting Project Management Office

- Ciscos Business Project Manager

- KPMGs Project Manager Team of 100 members placed onto one of 5Tracks (process areas)

- Order Entry, Manufacturing, Finance, Sales/Reporting andTechnology


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Function Area Tracks had

- Business Leaders, It Leaders

- Business and IT Consultants (KPMG and Oracle)

- Users


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Hand-Picked the best and brightest Rules of engagement

- Short-term

- No career change

- It was a challenge To each Person

- the project was THE opportunity.


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The Project was divided into 4 different versions

Version 0

- This version had trainings for the learners.- Configuration of Oracle Packages,- Small Parallel Tiger Team set up by the system

- Realized that modification were required despitecompelling reasons not to.


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Goal: Make the system work in each track Modeled the business process in detail and documented

the issues Weekly 3-hour meetings with track leader store solve

issues Found that software could not support huge number of

business processes Classified required modifications as Red, Yellow or

Green Steering Committee had to approve a Red 30 developers needed for 3 months After-sales support needed another package since

Oracle could not handle it.


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October 1994: Most difficult part of the project Project scope had expanded- Major modifications to Oracle- New after-sales support

- A data warehouse was necessary Did not convert any history- the data warehouse became the bridging system for

reporting history and future in an integrated data

conversion. Final test with full complement of users- Captured a full days business data- re-ran it on a Saturday in January 1995- Team members gave go signal after watching each

track executing the simulated day.


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1. Over sight by Top Management

CEO made the project one of the companys top 7 goals for theyear and track edits progress in executive staff meetings,company- wide meetings and board meetings.

2. Project was NOT an ITonly Initiative

Hand-picked the best business people to work with ITpersonnel on the project.

Team of 100 members placed on to one of 5 tracks (processareas).


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1. Implementation Responsibility at Two Levels

-Executive Steering Committee composed of VPs of

Manufacturing and Customer Advocacy, CIO, CorporateController and Senior VPs of Vendors.

-Project Management Office headed by business manager

overseeing the 5 tracks, each of which had a businessleader and an IT leader jointly overseeing the work of theteam.


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Well Communicated Top Management Commitment Put Best People on Team Can Do Team Attitude

High Priority in Company Project End Date Defined by Business Factors Select Hungry Vendors Financially Strong Vendors High-Level Vendor Personnel on Steering Committee Structure of Hardware Contract ( Capability- Based ) Seasoned, Experienced Consulting Support.


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It and Retail

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