NEW YORK -- As the pace of product launches and enhancements continues unabated in the area of new technology, management information systems executives are beginning to take a closer look at the way they evaluate, purchase and roll out these new systems.
Many retailers report being inundated with information from vendors on new products, and having less time to critically evaluate each and every new offering on the market.
At the same time, MIS executives are struggling to keep up with internal user requests and finding more efficient ways to implement new technology within their own companies.
To cope with these issues, executives say it's more important than ever to keep the focus on corporate goals and strategy when making decisions on adding new technology and developing plans to roll it out internally.
Other keys to proper product selection are whether it's upgradeable, cost-efficient and easy to maintain, and whether the new system fills an existing need or provides a solution to a current problem.
Simply having the so-called "latest and greatest system" is not necessarily the best answer for MIS departments, many executives said.
"There's a theory -- which I don't subscribe to -- that says buy the biggest and fastest equipment you can get," said Robert Drury, vice president of MIS for Schnuck Markets, St. Louis. "I think basically what you're doing at that point is buying at the high end of the margin curve on technology as opposed to buying at the what-you-need level, which is where the equipment is a little less expensive and you have the opportunity to upgrade in the future."
Drury noted that in the area of new technology, product life cycles typically last only six months, which means the prices come down fairly fast.
"I think everyone has a similar strategy: look for a piece of technology to solve an existing problem or enhance an existing system," said Mark Uebelher, director of store systems at Copps Corp., Stevens Point, Wis. "What you are really looking for is a solution."
David LaCaze, director of MIS for Homeland Stores, Oklahoma City, said he has been overwhelmed with new products and upgrades. He worries that the 66-store retailer's existing systems aren't being fully utilized.
"Everybody has constantly got something new or something changing," LaCaze said. "You feel like all you do is upgrade and upgrade, but you never do anything with it. I'm at the point where what I want to do is take the tools I have and do something with them productively."
Still, the addition of new technology or systems, when done right, can be an important driver of profitability, executives said. The key is finding the right systems and using them correctly.
According to Dan Raftery, president of Prime Consulting, Bannockburn, Ill., one of the first steps in evaluating new technology is defining the criteria for the system within the company, and then making sure the particular technology is understood in terms of how it will fit with the company's strategic objectives.
At Schnuck, Drury said the company tries to add "prudent technologies" -- not absolutely state-of-the-art systems.
"We don't try to buy the fastest processor," he explained. "We look to buy things that are upgradeable. That's very important for us. We also look for things that are generic and we don't necessarily worry too much about branded things because the fundamental technology in most of these pieces of equipment is the same."
It's a given that new equipment is almost obsolete even before it arrives on the loading dock, he added. Schnuck also wants to add new equipment that it can maintain in-house. "I would argue that you have to have a compelling reason to buy more, and usually that compelling reason is pretty hard to come by," he said. "The second piece of it is that if you hang in there, when the next advanced version comes out, the previous version will be cheaper. Technology advances drive the cost down, so in my opinion it's better not to buy at the top of the scale."
Copps also carefully examines the costs and benefits of new systems before making a major investment in a new product. "We are constantly wrestling with the issue of how much resources we have and how we apply those to get the projects that are most important done," Uebelher said.
"A company of our size only has so many people in its MIS department, so many people in store systems and so many in operations. There's a limited number of things you can really accomplish and roll out properly."
In his position, Uebelher also is faced with answering internal requests for new technology, upgrades and training, and then has to determine how these issues fit with the company's priorities. "We have to weed through the requests to determine which ones will give us the biggest bang for the buck," he explained. "You can't just have a knee-jerk reaction and respond to every request you get from every user. The request should be something that will have an effect on the entire corporation, not just a single user."
At Schnuck, Drury said department managers must approve individual employee requests for training programs or system upgrades. This takes some of the pressure off the MIS department, he noted.
At Homeland Stores, LaCaze said the number one request he's getting from users is increasing the "functionality" of what they have.
"They say 'We have all these tools, but what are we getting from them?' " he said. In terms of training, for the employees who need to learn basic, well-known software applications, Homeland outsources the project to local companies. Training in specific applications, like payroll, is handled in-house, LaCaze said.
"Most of the software we run is purchased, rather than developed," he added. "So as part of the initial installation, the vendor supplies the initial training. Ongoing training is hands-on."
Jack & Jill, a single-store independent in Wheatland, Wyo., has an ongoing training program whenever it changes or enhances software or hardware, according to Adam McDowell, a partner in the business. This involves getting the staff together and "walking them through the new system," he said.
McDowell said Jack & Jill views itself as a progressive operator and strives for the top of the line in new technology, despite its size.
"We're an independent, so obviously, we don't have the financial backing that some of the chains do, but that doesn't mean we can't stay on top of what they're doing and how it's working," he noted. "We gain a little bit of knowledge riding on their coattails, so to speak."
Jack & Jill also tries to work with vendors who understand that, as an independent, it doesn't have millions of dollars to spend annually on upgrades. Still, the store recently added a front-end software upgrade for its preferred-shopper program and has been constantly upgrading the system since rolling it out five years ago.
Despite all the advancements, Raftery of Prime Consulting noted that in the end, choices are often determined by personalities.
"A lot of times, the reason for picking a particular supplier involves the personal contact," he said. "Two or three systems may be equal, but you may think the people at one of the suppliers will be better at following through, and you go with that system."
