One of the main purposes for which Hudson's Bay uses ERP is to manage deliveries to its stores. "When we order merchandise from a vendor, sometimes it comes in from Europe and we know about how many we need by store, but it might be months before it is delivered to our company," says Dan Smith, CIO of Hudson's Bay. The resulting delay, he adds, "may change how much you need for one store versus another." Store employees often have to wait until the merchandise arrives, open the containers and then route them to other stores as needed, he explains.
Hudson's Bay decided it needed to replace its older systems with one overarching ERP system for all stores. Executives knew they wanted to move away from their mainframe systems and instead use newer blade servers; the mainframes had many problems, including the headache of finding Cobol programmers to maintain the old ERP software. The company upgraded to supply-chain management software from Manhattan Associates partly to gain the ability to determine exactly what was being delivered to stores and when it was arriving.
Some of the benefits that the upgrade yielded included process improvements, labor savings (which Smith chose not to detail) and the ability to consider future acquisitions that could be easily transitioned onto the existing supply-chain software.
Of course, Smith says, the overall project presented challenges, too, including the need to integrate the systems for the combined companies and the need to train staffers on the new process.
Julie Lockner, a data management analyst at Enterprise Strategy Group (ESG), says all mergers are complex, but they're especially complicated for retailers that will need to address compliance issues and figure out how old data sets will be maintained after moving to one companywide system.
If data is going to be merged into a single application, she says, companies should "[have] a plan for data retention and legacy application retirement at the outset" in order to minimize the chances that any application will become "a source of pain years later."
For his part, Gartner's Duggan says Hudson's Bay faced a very complex series of problems: legacy apps that mostly worked but didn't meet the needs of the newly merged company; a large-scale implementation across multiple locations; and the political concerns that typically arise when different corporate cultures come together. The main issue, he says, is that complexity leads to high costs, and IT has to make business continuity a priority.
"A major factor in mergers and acquisitions will be the attitude toward business process standardization," says Duggan. "Political concerns often result in multiple processes where only one should exist. IT can federate some processes when that is needed, but using IT to mask an inability to enforce consistency can result in costly, unreliable operations."