Building a Business Case for Packaged Applications - … a Business Case for Packaged Applications Paul Sperling, Director IT Fashion Retailer

Building a Business Case for Packaged Applications

Paul Sperling, Director IT

Fashion Retailer

A Retailer Perspective: The Evaluation Process

Recognize and Establish the Business Need 1

Define Program Goals and Objectives 2

Gather Requirements and Evaluation Questions 3

Measure Success 4

The Role of References 5

The Decision 6

The

Art

of

the

Dea

l

• Non-uniform metrics across systems (No singular version of Truth)

• Current systems will not support projected growth

• Constant struggles with system integrations (reliability)

• Need Solutions to Fill Current Gaps /Applications for Critical Business Processes (WMS, Sales Audit, Planning, Merchandising, etc.)

• Performance issues which translate into worker productivity loss

• Current vendors do not offer adequate support

• Current vendors are resource constrained

• Inability to execute requested improvements

• Resistance to modify applications to better suit your company


• Feel your team leads vendors in improvement conversations, vs receiving industry best practices and benefits from other retailers

• Current systems do not support International growth initiatives

• Current systems have inherent business process delays; resulting in slow information dispersal for proper decision making

• Require people to mark processes complete, delayed batch transfers, manual assembly and information delivery external of systems.

• Seeking measurable ROI to automate / improve / change existing business processes


• Provide a platform for future growth

• Eliminate future reanalysis / second guessing if you’re on the correct platform

• Align with a business partner that will continuously improve and adapt software to respond to challenges and opportunities

• Partner must have proper support model

• Align organization processes with Industry Best Practices

• Reduce / Eliminate Custom Integrations

• Identify a system that maintains a “Single Version of the Truth” / uniform metrics


• Identify a Warehouse Management System

• Identify a Sales Audit System

• Automatic validation for duplicate or missing transactions

• Highlights suspicious transactions

• Cleanses raw POS data before export

• Consolidates sales data across all channels

• Ability to correct past transaction history

• Exports one version of cleansed data across the organization


Identify a Stock Ledger System (Hybrid Accounting Model)

Identify a system that can support Hybrid Accounting Methods

Retail / Cost Accounting (Align Merch / Planning and Acct.)

Provide system framework to enable Omni-Channel capabilities

Provide near Real-Time visibility to business processes

OTB, P.O., Receipt, In-Transit, Shipping, Put-Away


Enhance / maintain Store operation

Consider all aspects of the store and seek out solution that offers continuity

Loss prevention (xbr)

customer relationship management (relate)

omni-channel position, current / future (ATG / Endeca)

Address specific store needs

inventory visibility

transfers Management

Cycle counts 24 x 7 (sim)

Reserve inventory for customers (serenade / Locate, Long Term)


• As Is, As Was, Point in Time review of item status

• International Org. Hierarchy

• Workflow Approvals

• Notification Processes (e-mail alerts)

• Mass Item Induction

• Support One Item Per P.O.

• Revisions / Rules for Vendor P.O.

• Over-Ship / Under-Ship

• Trace Vendor Revisions


• Receiving Reporting

• Filter by Buyer

• Auto-Receive Inventory Function at Stores

• EDI Capabilities

• Automated RTV Process

• Financial Visibility

• Visibility to Margins (COGS)


• Pricing

• Initial Price / Advisory Price

• Suggested Retail

• Automated Rules (% reduction after n weeks)

• Alerting on Slow Sellers

• Price Conflict Checks / Alerting

• Mechanism to record competitor price checking

• Change Approval Process / Auditing

• Calendar Based Pricing Rules

• Fixed Deals


• Finance

• Invoice Matching

• Automatically apply credits to GL

• Prompt for confirmation of reasons (i.e, shortages)

• Alert for Violators (Late Arrival of Goods)

• Sales Audit Rule Base (Base Interrogation)


• Valuation of Inventory: How is gross margin calculate? How are freight charges and transfers handled?

• Replenishment

• Fill by case (Shoes)

• Constant vs. Min / Max

• Time Supply (How we currently manage)

• Size Breaks (DC utilization)

• Allocation: Current is based on previous 4 weeks + Last Year Plan

• Class History + Sales

• Allocation from P.O.

• Exact and Proportional Capabilities


• Improve Margin and Sell-Thru: Better Planning Abilities to Lessen Transfers and Reduce Clearance / Improve Full-Price Sell Thru

• Improve Execution on Pricing Strategies: Provide visibility to COGS at time of planning and Reduce out-of-stocks with Real-Time Inventory Visibility

• Reduce Operating Expense: Utilize Labor Management (WMS), Reduce manual tasks, Reduce wait times, improved system and process improvements

• Reduced Headcount: System Capabilities and Automation to drive reduction of need to add head-count as company grows

• Run Scenarios: Built in What-If capability into the system

Measuring Success 4

• Warehouse

• Break Packs, Pick From Each’s

• Cross-Dock Support

• Vendor Non-Conformance / Compliance Reporting

• Workforce Management (Scheduling, Task Optimization, Layout Optimization (Step Reduction)

Measuring Success 4

• Planning

• Pre-Season (Lock earlier than most)

• Plan Development

• View History at Store Level (By Division / Store)

• Top Down (Exec Determined) Comp %

• Lease, Square Footage, Volume, etc.

• Contribution % determined by class and department

• Actual with Future Trend

• Comp and Non-Comp As Alternate Hierarchy

Measuring Success 4

• Project forced focus on business processes

• Gained exposure to best practices

• Unified teams on standardized systems and processes

• Retraining efforts yielded great results

• Training efforts were not characterized as significant and ranged from 8 hours to 2 weeks

• Formats

• Individual Classroom

• On-Line Learning

• Sandbox (staged training environment

• 3rd Party Training


• All customers found value in the tools

• All customers labeled the Oracle projects as significant effort, requiring resources from all departments, and emphasized executive support for initiatives as critical

• All customers leveraged external resources.

• All committed sizeable teams to the effort

• Key Benefits Articulated


• Control Your Own Destiny; Network With Others That Have Embarked On This Journey

• Summary of Comments: • You already know it is a big project!

• Recommend Dedicated Full Time Resources from the business be assigned to the project

• ROI has been realized with efficiencies of scale introduced with Oracle Platform

• Platform positions company in a great spot to grow

• Business Engagement is required for the project to be successful

• Invest in Training; do not overlook this in the project plan

• Phased approach to delivery of modules was preferred strategy

• All stated they will continue to grow and invest in their investment with Oracle

• Be prepared for a journey; but it will be worth your time


• Cost: Oracle solution presents significant cost to the organization (hardware and software costs)

• Complexity: Oracle solution will drive changes in business processes

• Disruption: Transition to new system with new processes while still maintaining day-to-day business will present challenges

• Support: Additional Specialized resources will be needed to support the ORACLE product portfolio (Internal / External Resources)

The Decision 6

Ability to Plan at Channel (INS, Franchise, B/M)

Comp will be Planned and Results provided within actual Planning Tool

Hybrid Planning – GM results will match Finance

Store Planning

Health of Inventory and Sale will easily be seen as a result and will have impact to how Comp is planned

Ability to see Original Plan, Lock Forecast (monthly) and Working Forecast

Overall, Math/Formulas will work efficiently so pre-season and in-season planning is improved greatly

Store Planning – at all Buckets and Transfer. Health of Inventory and Sale will be known at every level including Store/Class combination

The Decision: Planning 6

Able to Plan at Store level. Class level plans will drives ability to allocate to these Store Plans – all within same framework

Adjust on the fly concept with Store bucket and class results visibility

Will be able to eliminate Excel Tool to identify Store Plan as well as Balancing Sheet by Class

Provides detailed method to Allocate at any Attribute level

Obtain Strong Size Analysis Tool

Current capabilities all available – greatly enhanced!

• All of these opportunities will IMPROVE MARGIN and

The Decision: Allocation 6

One Suite = same results across tools and reporting

Dashboards and Canned reports improve speed and maintain consistent metrics

Ability to schedule reporting for repetitive weekly and monthly reporting

EDI and ASN capabilities

Mobile Platform (As Needs Grow)

Draft PO available

Consistent reporting built upfront by group of users to level set and what everyone is using to manage business and make decisions to move the business forward

When approving PO’s, live feed to OTB (both new and adjustments)

Photo functionality will allow for Assortment Reports, Line Sheets, Best Sellers quickly and more efficiently

Markdowns can be scheduled for optimal run time in the system

The Decision: Merchandising 6

• Singular Accountability

• Unified System with ability to satisfy long-term strategic options

• Products are pre-integrated; avoids recurring integration expenses and throw away work for future upgrade compatibility

• Workflows are automated and issues are managed via exception

• Aligns with business initiatives (xStore, PLCC, Relate, Locate, Internationalization)

• Competitor Offerings Introduce additional custom integration, complexity, and non-standard approach; requiring unique skillset for support

• Be True to Your Goals

The Decision 6

• Each solution offering from Oracle stands on its own as “Best of Breed” product

• Oracle continually invests in improving their applications

• Oracle application presence can be used for recruiting

• Industry Standard Application makes it easier to identify talent and reduce risk to the organization.

• Organization will not outgrow Oracle

• Industry leading software in every vertical of Retail

The Decision 6

Documents

Building a Business Case for Packaged Applications - … a Business Case for Packaged Applications Paul Sperling, Director IT Fashion Retailer