By Charles F. Moreira
Many organisations around the world implement their IT systems without considering the alignment factor between their business processes and IT initiatives. This often results in misalignment of these two very important elements. IronHorse, founded by Stan Singh, aims to help organisations with such problems and beyond. We continue from Part 1 of our article that chronicles Stan’s experiences in the industry.
Many IT system implementors only see what their system does from point A to point B. However users have other business requirements but such implementors cannot think outside of their box to offer a workaround or secondary solutions, so end up modifying the system to suit the retailers business and operational needs, resulting in higher implementation and ongoing maintenance costs which is loaded upon, and depending how the entire change management process or modifications to the original system was managed and implemented, the retailer may be ‘orphaned’ from all future upgrades unless there is a provision made on cost to retrofit these so called new additions, even though it sounds nice to take note and hear that “Upgrades Are Free”
Stan cautioned that there is a fine line difference between updates and upgrades and it’s always good and prudent to know this before hand and have this clarified and documented as part and parcel of the contractual terms in the agreement
“However, in all this, most implementors are also unable to provide workaround or recommend realignment or re-engineering of business processes to match the system which would have saved some of these costs. So in this regard when we look at cost, we are taking into account cost in terms of waiting or loss time for the business to launch, deviation from original business cost, additional maintenance cost, human resource cost, and so on so forth.
Especially in retail, besides warehouse management, there’s also head office management, procurement management, buying management, store operations management, store visual management, merchandising management, supply chain management and financial management, and all these require an in-depth understanding at the management, operations and transaction levels in order to advice, implement and lay the foundation to provide the organisation the ability to have complete visibility of the business from an end-to-end processes perspective and more importantly, be able to identify any single point of failure in the processes and to counteract this whilst mitigating risk factors.
Lack of subject matter experts
Incidentally, knowledge in retailing and the business and data flows and importantly how this integrates, is very important that spans across various segments of the retail industry such as Fashion, Hypermarkets/Supermarkets, Convenient Stores, DIY Stores, Drug Stores, Petrol Stations, inclusive of Single or Chain Stores and there are huge operational differences that also comes with various challenges and complexities when IT is introduced as the backbone in these businesses
“It requires a complete understanding of how the industry works but I’ve seen so called ‘experienced’ consultants appear on the doorstep, only to find that they had worked in a warehouse for 15 years and suddenly become ‘experts’ in the retail industry,” said Stan. And so on the other hand “While someone may have been working as a carpenter for 20 years but that does not make him a contractor either.”
What a business needs is a Subject Matter Expert who can discuss, interpret, advice and follow through in all areas of the retail business cycle or simply, understand how retail works in its entirety when addressing business issues arising during open discussion stages with the retailer,that is also outside of the system offerings.
Too many cooks… and all that jazz
Furthermore in such instances if there is more than one supplier involved in the implementation of any given project and when issues arise that cannot be resolved for whatever reason, these suppliers will ‘play’ the blame game or create jurisdictional disputes as to who is right and who is wrong but at the end of the day whatever is said and done the matter still remains unresolved on the table and the customer or the organisation suffers as a result of such disputes
“Sometimes the clauses in their contractual terms also don’t seem to favour the retailers, as it lacks clarity, don’t usually cover all the deliverables due to many unknown areas and when these so called unknowns are discovered, they result in additional costs to clients and these usually end up either as, cannot be done due to timing or lack of resource on the vendor end or the cost is simply too high for the vendor to absorb and perhaps is passed on to the retailer.
“But at the end of the day this too remains on the table unanswered unless somebody is willing to either pay for these unknowns or to do it away with or suffer with poor workarounds as suggested by the vendor,” Stan opined.
So what does all this mean?
“You paid for a system and before you can even implement it in the business you end up having to wait and still continue to wait and unable to use it effectively. In some instances, the supplier will advise the retailer to “use” and implement whatever is available first, and will ‘cross’ the bridge later so as not to ‘halt’ the project.”
Stan cautioned about this, “But I can safely state here that usually when the time comes to address the previous matter that has been put away, these are simply either forgotten, the person-in-charge has left the organisation from the supplier or the person from the organisation itself has also left and due to poor documentation, sometimes these becomes ‘new’ issues to be discussed in the next meeting.”
Also more often than not, the vendor or supplier of the solution also have different sales, implementation, development and support teams, which results in a huge disharmony to the entire process, and when project managers come onboard they are unable to recognise the differences between their clients’ business and IT processes and system offerings to what was either said or demonstrated or documented during the sales and demo cycles.
“This is a very common error occurrence which leaves huge gaps that is still happening today,” said Stan
A valuable experience
Stan had been head-hunted to join the MUI Group in 1997 as general manager of Group IT and stayed for 14 years, his longest with any company. He was later promoted to vice president, then senior vice president and as the global chief information officer (CIO), responsible for all MUI Group’s IT systems across Malaysia, Singapore, Indonesia, Australia, the U.K. and the USA.
In 1998, the MUI Group acquired Laura Ashley in the UK which had business in Europe and the USA as well. Besides its foundation in having a brick and mortar retail chain stores, it also has e-Commerce offerings, Main Orders & Catalogue Sales with Phone sales, Franchise business, Wholesale and occasionally had Outdoor Event Sales. So in short Laura Ashley is a true blue Multi-Channel Retailer.
“For example, in this particular scenario there were 36 various systems that were bolted “together” to address the various business channels that had many complexities and as a multi-channel retailer, Laura Ashley, were faced with huge disparities in processes, major disparities in data integrity, data mismatch, major repetitions in processes to get similar results in different systems, and much money was spent on maintenance, modifications and upgrades,” said Stan.
“After evaluating them all, overtime working very closely with the Senior & Operations management, I was able to consolidate them down to 9 systems with major improvements in data segmentation in processes and ended up with a huge reduction in IT costs in terms of people and maintenance, and more importantly reducing peripheral cost such as upgrades.”
“Our biggest task ever was to implement retail systems at Laura Ashley U.K. Subsequently, we also implemented systems at Laura Ashley U.S. and the Metrojaya departmental stores in Malaysia, while our biggest challenge was to make Laura Ashley’s U.S. system Year 2000 (Y2K) compliant due to the fact that after the management buyout it became an independent entity and we started from zero base to bring the business and IT together and importantly to cross the Y2K safely.
“We completed the task at the back office and front office in its stores across the U.S., including one store that was based in Hawaii all within under three months,” said Stan who added that this feat hugely surprised global management consulting firm, Ernst & Young, which did not believe it could be done.
Stan left the MUI Group in 2009 because he wanted time to write his book about the retail industry entitled, ‘Something They 4Got 2 Teach U in Stanford.’ Meanwhile, he had drawn huge interest from Oracle and SAP to work on their retail segment regionally but finally joined Wincor-Nixdorf retail as its managing director later that year. He stayed till 2012, when he left to found Iron Horse Asia.
“I founded IronHorse Asia because I wanted to help small-to-medium sized and even larger companies where much remains to be done in terms of automation, not only their implementation of IT systems but also to help retailers rise to the next level with clear objectives and how they can use available technologies to become multi-channel retailers and to go beyond their traditional retail ways,” concluded Stan.
