CONNECTIVITY KEY TO AGGRESSIVE GROWTH

Byline: Brad Barth

NEW YORK — Through an ongoing three-year plan to implement a new retail technology infrastructure, Gottschalks is rolling out a thin-client solution to connect all of its department stores to a centralized enterprise resource planning system as well as a company intranet.
Having recently acquired two store chains — Harris in 1998 and Lamonts in 2000 — and looking to expand further, Gottschalks requires an infrastructure to accommodate what chief information officer John Zavada called an “aggressive growth strategy.”
“We are on a growth path and if we’re looking to develop the business beyond $1 billion, our business infrastructure needs to be refreshed,” he said. The thin-client solution, he continued, is “a key piece to the strategy,” adding, “It would not succeed without it. Our stores have to have access to the ERP [enterprise resource planning] system.”
As part of its plan, the company is looking to raise the level of strategic intelligence available at both the stores and at the home office in Fresno, Calif. Gottschalks’ 30-year-old mainframe-based operation, whereby stores’ point-of-sale terminals contain their own data, is insufficient for the retailer’s ambitious plans, said Zavada. “While it does a really good job of supporting our business, it does not allow us to have information at our fingertips,” he explained.
The thin-client technology, which is being set up over a wide-area network, will eventually connect all of Gottschalks’ point-of-sale terminals, back-office systems and corporate offices to a central server containing vast amounts of data and software. Information can flow freely between the server, the stores and the home office. Stores will obtain most of their functionality and procure most corporate data through this connection to the server.
The thin clients will provide a cheaper solution than Gottschalks’ mainframe-based operation. Information technology costs will drop because software needs to be downloaded only once into the server and because there is less technology to maintain in each store.
So far, 250 thin clients have been installed at the corporate office, while another 200 have been installed in 40 Gottschalks stores — about five per store. The thin clients were also installed in acquired stores.
Aside from the ability to access the Internet, the 40 connected Gottschalks stores have a little more functionality than they did when they were mainframe-based. However, this will completely change as the retailer phases in its technology overhaul.
This spring, as Gottschalks begins rolling out the solution to the remainder of its locations, the company will begin implementing an ERP system comprised of a data warehouse as well as a merchandising solution than contains applications for inventory management, price management, ordering and receiving. Both solutions are from JDA Software, Scottsdale, Ariz. Once the ERP goes live, the stores will have instant access to a wealth of information and an opportunity to do more ad-hoc reporting and analysis.
“Connection to an ERP application+will give [stores] access to key metrics and information such as how their particular store is performing and how the company chain is performing,” said Zavada. The thin-client terminals will also feature a more graphical, less text-based working environment than the company’s current store terminals, thus simplifying employee tasks.
The ERP, Zavada continued, “will allow merchants to have much better reporting capabilities and more timely information to manage their business and make better decisions.”
The home office will also be able to make better decisions, such as how to allocate merchandise. Through the thin-client solution, corporate headquarters will be able to leverage the merchandising solution’s replenishment capabilities. Zavada said the company is looking to “turn our inventory more quickly” and improve stock, “which would translate into potential incremental sales increases.”
The thin clients will also connect the entire company to an intranet that Gottschalks expects to be up and running in June. The intranet will contain comprehensive information on the company and its policies, and will offer employees self-service payroll and benefits administration, thereby eliminating paperwork.
“There are a lot of workflow benefits that will come from the intranet by adding online forms, online benefit administration and information,” said Zavada. “We are anticipating that we will improve the overall timeliness with which employees get information and reduce the amount of paperwork they deal with.”
Zavada said the thin-client terminals will even assist Gottschalks in possible future acquisitions. In fact, according to Zavada, the thin clients made the summer 2000 acquisition of Lamonts’s 37 stores “painless.” With Gottschalks’s technology plan already under way, “Instead of rolling out mainframe terminals, it made sense, with our long-term strategy, to bite the bullet and go with the thin-client terminals,” he said. “And it went extremely well. There were no issues and it went as planned.”

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