Information systems departments are redefining themselves as shifting priorities and changing roles within the company converge to break down boundaries that once isolated them from other business areas.
Retailers are increasingly focusing on new technology projects such as electronic marketing and communications, which, due to their strategic nature, require involvement from other business areas.
The coming together of marketing, merchandising and information systems staff in technology decision-making is good news, retailers agree, but the challenges are great. To maximize the potential of new technology, retailers must overcome several hurdles within their own organizations.
Systems Integration:
Introducing even an upgraded version of existing software can materially affect the performance of systems that are linked to it, risking compatibility and data synchronization problems.
Resistance to Change:
Leveraging new technologies frequently requires users to adopt new processes, yet most want to cling to old ways.
Priority-Setting: Information systems de-partments, large and small, said pursuing multiple initiatives simultaneously is futile when there's no clear road map.
Timetable Pressures: IS departments are being asked to deploy solutions swiftly and on a broader, enterprisewide basis to many users with varying proficiency levels.
The onslaught of new technology choices requires all staff in the organization to get up to speed with new strategies, not just the systems that support them.
"The amount of change that happened in the first part of the '90s will pale in comparison to the rate of change in the last half of the '90s," said George Dieterich, director of retail technology services at Fleming Cos., Oklahoma City.
"Not only will change come at a much faster rate, but the improvement in processing speed and issues of compatibility with other peripheral devices will require much broader changes in retail automation than just replacing a PC," he said.
Investing in the latest technologies can present a dilemma all too familiar to the homeowner who's repainted the den: After the job's done, the carpeting and furniture don't look so good anymore.
"I believe we'll reach a point in speed where the processor of Pentium grade won't be able to talk to the laser printer or be able to communicate with peripheral devices. That will require programming changes and some of the items that attach to the PC will have to be replaced," Dieterich said.
The challenge for IS, then, is to anticipate with confidence how new technology will fit in with older systems that are not yet ready to be replaced.
"I see departments such as ours becoming more systems integrators and figuring out how to integrate packaged solutions into the business environment, and secondly, into all the other packaged solutions we already have," said the vice president of information technology at a 100-store chain.
Even when IS is successful in getting hardware and software to work together in harmony, it's the human nature element that creates a bottleneck because people are resistant to change.
"To really take advantage of new technology, re-engineering of work processes has to take place," said Joanne Donley, vice president of information services at Raley's Supermarkets, West Sacramento, Calif.
Unfortunately, "that's an issue with your user community, where the opportunities are there but people are used to doing their work in a certain way. It's often very difficult to convince them that another way might be better," she said.
Retailers who fail to approach technology in a fresh way are selling themselves short, said an information technology vice president at a 250-store chain. He said he's not too impressed by progress the industry has made.
"Things are getting faster, capabilities are increasing, but what I haven't seen is a whole lot of innovation in the last year," said the executive, who requested anonymity.
For instance, data warehousing has been available and exploited for decision support applications in other industries. However, supermarkets still haven't figured out how to model it into a process, to implement it in such a way that knowledge can be shared across an organization, he said.
Within decision support, specifically category management, retailers are sabotaging their own efforts because "we haven't learned to use the new stuff differently. That's the challenge.
"Right now, it's pretty much individualized so a category manager, with his [data] mining ability, is looking at data certain ways, and we don't have a way to move that into an executable process across the organization."
Everyone seems to think the other guy has it easier: Large retailers say smaller players have the advantage because they are more nimble, while independents say the heavy hitters have the money and technical expertise to exploit new technologies. On one thing everyone agrees: The pressure is heating up.
"It's always been intense here and people who are here like that intensity," said Raley's Donley.
"Our biggest challenge is delivering [solutions] in all the business areas we need to deliver them. We operate with a very small, talented staff and we do tend to get split in all different directions," she said.
Harp's Food Stores also operates with a small IS staff, and it's particularly challenging to deploy multiple projects simultaneously, said Jim Antz, director of management information systems and electronic data processing.
The 38-store chain is now in the process of upgrading corporate computer systems while rolling out category management software to all stores that have scanning capability.
To keep all projects on track, Harp's created a cross-departmental IS steering committee. The group meets quarterly to establish and modify priorities as needed.
"We have to do a very good job of priority-setting so everyone has a clear idea of what we're trying to accomplish, because there are more opportunities than we could possibly [implement] in one year's time," Raley's Donley added.
A top priority at Raley's is the development of communications capability at all levels of the organization, and to that end the company recently launched its RaleyNet project, consisting of local-area and wide-area networks.
"One of the urgent areas is communications. You've got to have a sufficient network, both local- and wide-area, to support the business today and in the future," Donley said.
In the longer term, the retailer is looking to take advantage of "intranets," which are internal networks that make use of technology and graphics that are part of the World Wide Web.
"We have an Internet committee that works with us on developing ideas and we're getting our technology in place so we'll be able to take advantage of this," she added. Raley's will likely launch a company intranet before developing a publicly accessible Internet site.
Raley's Donley said retailers must prepare now for the workforce that will be running the business in years ahead.
"Think of all the children running around with computer games, playing with them all day long. We've got a whole generation of people who are going to be totally conditioned to using computer technology for fun and work. We've got to be ready for that," she said.
