RETAIL TECHIES’ DILEMMA: ENGAGING THE MERCHANTS
Byline: Kim Ann Zimmermann
PHILADELPHIA — As technology spills into every facet of the retail business, the job of the store’s chief information officer has become more challenging and trickier.
They need to start thinking like retailers — not just technologists. They need to permeate a wide array of business units, from marketing and merchandising to human resources and logistics, to tap talent away from their “real jobs” temporarily, to cooperate on developing information systems.
In addition, as the technology staff struggles to install the latest systems to meet the demands of the business, there is pressure to maintain and improve existing systems.
Yet, given the corporate cultures of most retail companies, cio’s generally remain an isolated breed.
That was the key message emanating from a panel of nine cio’s from major retailers and manufacturers, at last week’s RISCon technology conference here, sponsored by the National Retail Federation.
“In the past, the technology area in a retail company has played more of a support role, but that is clearly changing,” said Joseph Smialowski, senior vice president and cio, Sears, Roebuck & Co. “Today, we can’t implement any change in the business strategy without technology. It is woven throughout the organization.
“We’ve got to get the technology staff thinking of themselves as retailers.”
Getting people from various business units involved in information systems projects is important to the success of any project, the cio’s agreed, but they acknowledged it is often a source of conflict.
“[Taking people from the business units] is a huge commitment,” said John R. Thompson, vice president and cio, Liz Claiborne. “It is important that the ceo and the executive team work together to pick the best and the brightest people out of the business units,” he said. “The key is to keep them engaged when they go back to the business units so there is some cross-pollination of ideas,” Thompson said.
One of the problems, according to the panelists, is there is not always a willingness to relinquish top people in business units to spend an extended period of time on an information systems project.
“If people in the business units are telling you you can’t have a particular person, that’s the person you want to work on the project,” said Peter Burrows, vice president of MIS and chief technical officer, Reebok International Ltd. “Until I said we would fund the salaries of the people who were working on the project, we weren’t getting the people we needed,” he said.
There has to be a flow of communication between the information systems staff and the corporate offices, according to Burrows. “The earlier [the technology staff] knows about a change in the business strategy, the better,” he said. “We need to do as much advanced planning as the [business units] do,” he said.
Sears’ Smialowski said installing a new information system should be tackled like any other project — like building a new warehouse. “This is one of the largest projects a retailer will undertake, and it should involve the same people and functions as any other [large] project,” he said.
It is natural to have some friction between the business units and the technology staff when introducing substantial changes to the business process, the cio’s said. The success of a project depends on how the concerns are addressed.
“It is inevitable that there will be resistance from a business unit that feels threatened,” said Donald E. Norman, vice president and cio, Kmart. “The best way to deal with it, I feel, is through attraction. Create a giant magnet so that all areas of the business will feel drawn to the project. A big part of the job of a cio is selling.”
Getting the right people from the business units is only one part of the staffing concerns that need to be addressed when introducing new technology, according to the panel.
One of the key concerns among the cio’s centered on keeping the existing systems functioning while putting a new one in place.
The panel was split on the issue of using outsourcing to maintain legacy systems while installing a new enterprise-wide system.
“We farm out activities where we can’t bring additional value,” Smialowski said. “We’ve outsourced data centers, network and desktop management services, and it has served the company well,” he said. “As long as each party has a a clear understanding of what is expected and there are clear standards that must be adhered to, it can be positive,” he said.
Sandra L. Harris, cio at Maidenform Worldwide, said outsourcing can help focus the technology staff on the future.
“One of the biggest things I contend with as a cio is how to manage change,” Harris said. “It is certainly a challenge to support the existing systems while building the new.” She noted that you have to strike a careful balance of who is working on the old systems — whether it is an outsourcer or the internal staff — while the new system is being developed. “Everyone wants to learn the new stuff, but we still need the knowledge to support the old stuff.”
“It is important to develop a sense of ownership and responsibility no matter if you are working on the new project or maintaining the existing systems,” said Robert Meilen, vice president and cio of the Lerner New York division of The Limited Inc. “However, you really need to assess who are your ‘keepers’ and have enough of those people end up on the new project,” he said.
Harris said it is important to minimize changes to the existing system while installing new technology.
“While it may not be popular, you have to take a look at what you need in the short term and find a way to do only what is crucial.”
Liz Claiborne’s Thompson said using outsourcing wisely can help channel the technology staff’s effort. “We can focus on technology that will help us differentiate ourselves,” he said.
“The nice thing when you outsource is that when they are done, they are gone,” said Richard Silvers, vice president and cio, Tandy Corp.
Other members of the panel cautioned against outsourcing, noting that keeping technology in-house is central to the retail operation.
“We would never outsource merchandising, so why would we outsource technology if it is really mission critical,” said Thomas Reinebach, cio, Toys ‘R’ Us. “If we outsource mission-critical systems, we get further away from the user.”