IBM Retail | 14 Success Stories in Retail
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IBM Retail | 14 Success Stories in Retail

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IBM presents a collection of 14 retail case studies and success stories from companies such as 1-800-Flowers, Bazaar Voice and Sears. Learn how you can work smarter in retail today

IBM presents a collection of 14 retail case studies and success stories from companies such as 1-800-Flowers, Bazaar Voice and Sears. Learn how you can work smarter in retail today

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  • 1. Smart Work in Retail – Customer Stories
  • 2. Smart Work in Retail – Customer Stories
  • 3. Smart Work in Retail – Customer Stories Smart Work for a Smarter Planet The world has become highly instrumented, interconnected and intelligent: from our food and water, to our energy, homes and transportation, to our cities and governments and, of course, our businesses and places of work. The workplace may be smarter, but it is also more challenging because of increasingly rapid and unpredictable change. Everything from swings in markets, to increasing global competition to new consumer expectations and more are changing at a furious pace. To keep up, we work harder. But to win, we must work smarter. Smart work embraces, even takes advantage of, change by creating a more agile, collaborative and connected business environment. It can make your business more profitable and productive. While it makes the world a better place to live and work. Some organizations are showing the way. In this book, you’ll see how our customers from around the world, in the retail industry, are connecting people and processes to: Optimize business performance Use technology to meet business needs quickly Maximize people's effectiveness working together To learn more about Smart Work, visit ibm.com/smartwork. Additional case studies are available at ibm.com/smartwork/success. We would love to have your organization as a client reference. To become an IBM client reference, visit ibm.com/ibm/clientreference.
  • 4. Smart Work in Retail – Customer Stories
  • 5. Smart Work in Retail – Customer Stories Table of Contents I-800-FLOWERS.COM, United States.....................................................................................7 1-800-FLOWERS.COM, INC needed to replace multiple, diverse, siloed e-commerce systems with a unified technology platform. Bazaar Voice, United States .....................................................................................................11 Bazaarvoice needed a vehicle to help its own software solution to increase online sales and create innovative tools to facilitate online commerce. Gewandhaus Gruber, Germany ..............................................................................................13 Gewandhaus Gruber wanted to better understand and reward its existing customers, while attracting new ones. It sought a cutting-edge loyalty offering that would help it increase revenue and differentiate itself from its competitors. Hartman Rauta Oy, Finland....................................................................................................15 The company wanted to take advantage of a number of new updates and improvements available in the latest version of Lotus Notes software, including new features that would improve mobile data security. In addition, Hartman wanted to implement a virtual group working environment to support improved communication and collaboration. Hess, United States....................................................................................................................17 Hess Corporation needed a new inventory solution that would automate processes and keep data up to date. Isuzu Australia, Limited, Australia.........................................................................................19 Isuzu Australia Limited needed a solution to improve the speed and accuracy of communications between head office and the dealerships as well as facilitate increased collaboration with business partners. Major Retailer, United States ..................................................................................................23 Major Retailer wanted to determine whether its hybrid inventory strategy with some stock keeping units (SKUs) was appropriate for its business. Max Bahr, Germany.................................................................................................................25 Max Bahr wanted to meet its customer demand for any of 40,000 products in over 80 outlets with low replenishment and storage costs. METRO Group, Germany.......................................................................................................27 METRO Group’s retail store meat tracking system was entirely manual, a time-consuming and error-prone process. METRO Group needed to gain a better grasp of the inventory management of its meat products, while working to improve customer food safety. Moosejaw, United States ..........................................................................................................29 To thrive in the highly competitive market for outdoor adventure gear, Moosejaw Mountaineering needed to create a customer experience that would engage a customer community whose appetite for extreme sports is matched by a hunger for communication and collaboration. i
  • 6. Smart Work in Retail – Customer Stories Table of Contents Sears Canada, Canada..............................................................................................................33 Sears Canada wanted to deliver on business objectives and reduce development cost through code reuse to eliminate coding and recoding of the same integration, and speed the exchange of information with business partners to improve business agility to be competitive in today’s economy. South American Retailer, Brazil .............................................................................................37 South American Retailer needed to enable an enterprise-wide sales information portal with dramatically improving productivity and information access while eliminating millions of printed pages annually. Spotlight Proprietary Group, Australia .................................................................................39 Spotlight Proprietary Group wanted to have a strong and flexible IT Infrastructure with sufficient strategic dimension or vision. Yansha, China ...........................................................................................................................55 Yansha needed to increase its competitiveness against both local retailers and new foreign competitors in an increasingly deregulated Chinese retail industry through the adoption of new business processes, automation and business intelligence. ii
  • 7. Building a Smarter Planet 1-800-FLOWERS.COM: Creating an e-commerce platform for the future Overview ■ Business Challenge To better enable synergies between its 14 gifting brands, create greater business agility, and reach its goal of becoming one of the Top 10 among Internet Retailer Top 500 com- panies, 1-800-FLOWERS.COM, INC. needed to replace multi- ple, diverse, siloed e-commerce systems with a unified technol- ogy platform. 1-800-FLOWERS.COM, INC. is the “ The platform will ■ Solution world’s largest florist and gift shop, with 1-800-FLOWERS.COM teamed enable the individual revenues approaching US$1 billion. The with IBM to implement company is marked by its large-scale brands to do things IBM WebSphere® Commerce vision and forward thinking, positioning they would never for two of its gift food brands as itself at the leading edge of trends with have been able to an initial proof of concept innovative marketing such as “green” cost-justify before. It’s for the platform. The site, initiatives that reward responsible con- thepopcornfactory.com has going to give us sumer behavior. For example, its seen a consistent rise in conver- BloomNet® brand will, in exchange for unprecedented agility.” sion since its November launch. a customer forgoing a BloomNet Florist — Steve Bozzo, CIO, Using knowledge gained from paper directory, plant trees as part of a 1-800-FLOWERS.COM this first rollout, the company reforestation campaign. It is also intro- will take a greater role in transi- ducing environmental responsibility as a tioning most of its other brands theme across all of its businesses, with to the new platform over the awareness campaigns on social net- coming year. working Web sites. ■ Key Benefits — Enables more rapid creation The company has a thorough under- and deployment of retail standing of the “gifting” market space in Web sites which it operates, and sees great — Facilitates cross-selling potential for synergy by offering multiple between brands Page 7 of 60
  • 8. Making the most of brand synergy through shared technology specialty brands. The 1-800-FLOWERS.COM strategy has been to grow three Business Benefits ways: organic growth, internal business development and strategic acquisitions. ● Enables more rapid creation and Today, it has 14 brands that sell everything from popcorn to gift baskets to gour- deployment of retail Web sites, met food and children’s gifts. allowing 1-800-FLOWERS.COM to try out new offerings with very little investment and risk The strategy has given 1-800-FLOWERS.COM a broad and diverse portfolio, but it ● Facilitates cross-selling between also created a business challenge. To fully realize the benefits of its multibrand brands by unifying the underlying strategy, they must be unified behind the scenes, but as is usually the case, each technology new acquisition brought with it a different set of business processes and technol- ● Provides the potential for information ogy, resulting in a large number of siloed operations that were difficult to integrate. sharing across business units, opening up the possibility for more effective To promote brand synergy, the company has undertaken “Fresh Digital™,” an marketing to customers enterprise-wide transformation initiative. “Unifying lines of business is a better ● Ensures a consistent look and feel approach to retail,” says Steve Bozzo, CIO at 1-800-FLOWERS.COM. “By sharing across the company resources, systems and services, we accomplish a number of things. We become ● Provides a rich, differentiated customer a more dynamic and agile enterprise because we’re breaking down internal experience barriers—which will also help us develop new business intelligence. We’ll be able to ● Reduces maintenance and leverage resources and services of all kinds across the brands, from information to development costs IT to shipping to warehousing, which will let us work smarter. And by consolidating, sharing and implementing more efficient technologies as well as implementing measures like sustainable packaging and reducing our reliance on paper catalogs, we’ll be able to reduce our environmental footprint, which puts credibility behind our green marketing efforts.” Build versus buy The first step on the consolidation path was to give the individual brands a com- mon e-commerce platform. The 1-800-FLOWERS.COM brand itself uses a robust e-commerce system that was developed entirely in-house and which continues to “ Tearing the walls serve the company very well, with a demonstrated ability to handle even the heavi- down will enable us to est holiday volumes. It became clear, however, that using this platform to support go to market much all of the other brands was not the best use of the company’s resources. Rolling more effectively. We’ll out the 1-800-FLOWERS.COM platform to its other brands would require replicat- have a lot more shared ing it over and over and it was simply not the most efficient way forward. information, and that “We’re very happy with our core platform. Its performance proves we have the abil- will allow us to cross- ity to create really strong e-commerce solutions, but fundamentally we’re not a sell much better.” software company—we’re a gifting company,” says Steve Bozzo. “It made more — Steve Bozzo sense for us to find a best-of-breed e-commerce platform and work with it as Page 8 of 60
  • 9. opposed to spending a lot of time and energy creating our own. Also, by going Solution Components with an industry leader, we’re leveraging its research and development dollars instead of using ours to reinvent the wheel as well as reducing the size and envi- Software ronmental impact of our infrastructure.” ● IBM WebSphere Commerce ● IBM WebSphere Message Broker The company chose IBM WebSphere Commerce, in part because of the flexible ● IBM WebSphere MQ and efficient way in which it functions behind the scenes. “With WebSphere Hardware Commerce, basically you’ve got a single Web site that handles all of the transac- tions,” says Bozzo. “This central engine supports as many customer-facing Web ● IBM Power Systems stores as you like, and it’s easy to add new ones or roll out new features across Services brands.” ● IBM Global Business Services ● IBM Global Financing The platform, running on IBM Power Systems™ hardware, also has to integrate seamlessly with the company’s existing systems. The 1-800-FLOWERS.COM platform will remain in place, and most of the other brands will be migrated to the new WebSphere Commerce-based system over the coming year. In the interim, everything needs to continue functioning transparently. To accomplish this, the service-oriented architecture solution includes IBM WebSphere Message Broker and IBM WebSphere MQ, which form an enterprise service bus that ties the legacy Smarter Solutions for Retail systems together. To realize its vision of synergy among its 14 brands and meet ambitious growth The initial rollout supports two of the company’s gift food brands, and took a total goals, 1-800-FLOWERS.COM, INC.—the of only seven months with the help of IBM Global Business Services. “We went world’s largest florist and gift shop—is from Web 0.5 to Web 2.0 in only a few months; we could not have done that with- deploying a single e-commerce platform. out IBM,” Bozzo says. Knowledge transfer and lessons learned during the initial The solution, based on IBM WebSphere Commerce, is designed to replace rollout will help 1-800-FLOWERS.COM to take a greater role in launching the multiple siloed systems. The new remaining gift food brands. In this way, the company will be well prepared to launch platform adds flexibility and agility, future brand storefronts entirely on its own. making it significantly easier to launch new Web commerce brands—allowing the company to try new business IBM was chosen mostly because of the capabilities of WebSphere Commerce and strategies with little risk. In addition, the expertise of IBM Global Business Services, but Bozzo emphasizes another the shared platform facilitates cross- important consideration: IBM Global Financing. “Because of the uncertainty we’re selling and information sharing seeing in the macro economy these days, making it easier to make the investment across the enterprise, which helps 1-800-FLOWERS.COM gain maximum was a key decision driver for us. IBM was able to give us what we needed in that benefit from its many business units. area.” Page 9 of 60
  • 10. Supporting a visionary business strategy © Copyright IBM Corporation 2009 IBM Corporation The ultimate goal of the company’s overall Fresh Digital™ initiative is to eliminate all 1 New Orchard Rd. of the barriers between business units, enabling the full sharing and leveraging of Armonk, NY 10504 U.S.A. information across the entire enterprise and throughout its back-end systems. Produced in the United States of America “Over the long term, our customers will be able shop any of our brands, and we’ll January 2009 be able to ship from a unified location. That’s a much more streamlined, efficient All Rights Reserved and smarter model,” Bozzo says. IBM, the IBM logo, ibm.com, Power Systems and WebSphere are trademarks or registered trademarks of International Business The implementation of WebSphere Commerce is a critical first step—the benefits of Machines Corporation in the United States, other countries, or both. If these and other shared services that it offers will trickle down throughout the organization over time IBM trademarked terms are marked on their first and enable new ways of going to market. “Tearing the walls down will enable us to occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. go to market more effectively. We’ll have a lot more shared information about buy- registered or common law trademarks owned ing patterns and customer profiles and that will allow us to cross-sell much better,” by IBM at the time this information was published. Such trademarks may also be says Bozzo. “Also, we’ll be able to try new ideas with little risk. With the new registered or common law trademarks in other platform, we can launch an entirely new brand fairly easily, because all of the countries. A current list of IBM trademarks is available on the Web at “Copyright and e-commerce technology is already there.” trademark information” at ibm.com/legal/ copytrade.shtml Other company, product or service names may The most significant impact of the platform, however, will be in the competitiveness be trademarks or service marks of others. it brings to 1-800-FLOWERS.COM by allowing the company to leverage best prac- This case study illustrates how one tices across the entire business. “The platform will enable the individual brands to IBM customer uses IBM products. There is no guarantee of comparable results. do things they would never have been able to cost-justify before,” Bozzo says. “It’s References in this publication to IBM products going to give us unprecedented agility. We’ll be able to re-merchandise our Web or services do not imply that IBM intends to make them available in all countries in which stores on the fly in response to competitive offers. That will make us much more IBM operates. relevant to the customer, which is critical. Customer expectations continue to ratchet up, and this new platform is positioning us to meet them going forward. We’ll have an immediacy and responsiveness that will give us a real competitive advantage.” For more information To learn more about how IBM can help transform your business, please contact your IBM sales representative or IBM Business Partner. Visit us at: ibm.com/retail ODC03103-USEN-00 Page 10 of 60
  • 11. Case Study QuickView Industry: Retail Bazaarvoice social commerce solutions boost sales at online retail sites powered by IBM WebSphere Commerce Bazaarvoice is a pioneer in developing technology and services that encourage and harness online word-of-mouth marketing and boost e-commerce. Working with IBM, Bazaarvoice chose IBM WebSphere® Commerce as a superior platform for its social commerce solutions. Challenge In the offline world, word of mouth is a powerful force, and perhaps the most trusted form of advertising. Bazaarvoice, an IBM Advanced Over view Business Partner that participates in IBM PartnerWorld® Industry Networks and is optimized in the retail industry, saw the potential for Bazaarvoice, Inc. word-of-mouth marketing to increase online sales and created Austin, Texas innovative tools to facilitate this capability. www.bazaarvoice.com Products Solution • IBM WebSphere Commerce Bazaarvoice core products -- Ratings & Reviews™, Ask & Answer™, and Bazaarvoice Stories™ -- provide capabilities that are critical to differentiating retailers and driving sales. The tools, respectively, help enable customers to rate products and write reviews, ask questions and get answers directly from other consumers, and share user experiences. “Joining PartnerWorld Industry They can also seamlessly feed data to IBM DB2® databases. Networks and using the Bazaarvoice solutions, which are hosted, managed and monitored, exceptional resources that provide advanced analytics. They work with any e-commerce platform, IBM can bring to a partner including IBM WebSphere Commerce, a next-generation solution for e-commerce needs which is the preferred foundation for the lets us take our business applications for multi-channel retailers. to a whole new level. Our relationship with IBM is making “WebSphere Commerce provides a whole set of possibilities that simply wouldn’t be possible with other e-commerce platforms that Bazaarvoice grow faster and lack WebSphere’s multi-channel capabilities,” said Brant Barton, vice in more robust ways than we president, business development, Bazaarvoice. would have otherwise seen.” Brant Barton, vice president, Benefits business development, Bazaarvoice Bazaarvoice social commerce solutions running on IBM WebSphere Commerce: • Increase online sales and reduce return rates • Improve customer satisfaction and loyalty • Improve search ranking and drive qualified leads • Provide better understanding of customer wants and needs Page 11 of 60
  • 12. © Copyright IBM Corporation 2007 Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America 12-07 All Rights Reserved International Business Machines Corporation, the IBM logo, DB2, PartnerWorld, and WebSphere are trademarks or registered trademarks of IBM Corporation in the United States, other countries, or both. Windows is a trademark of Microsoft Corporation in the United States, other countries, or both. Other company product or service names may be trademarks or service marks of others. The information contained in this documentation is provided for information purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this documentation, it is provided “as is” without warranty of any kind, expressed or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software. Page 12 of 60
  • 13. Innovation that matters Gewandhaus Gruber increases customer loyalty and sales revenue by using cutting-edge IBM and IBM Business Partner technology. Overview Gewandhaus Gruber is a clothing retailer with a 350-year history of dressmaking and retailing. It currently has eight branch stores, two Gewandhaus Gruber Erding, Germany outlets and a sports shop where it sells both traditional Bavarian clothing www.gewandhaus-gruber.de and formal dresses of other brands. Industry • Retail Challenge Employees Gewandhaus Gruber is a successful mid-level to high-end clothing merchant in • 1,000 Germany. Wanting to better understand and reward its existing customers while attracting new ones, the company decided to implement a customer loyalty Products • IBM Anyplace Kiosk program. But traditional card-based loyalty solutions were predictable and could • IBM DB2® for Linux® be expensive to maintain. Instead, the retailer sought a cutting-edge loyalty offering IBM Business Partner that would help it increase revenue and differentiate itself from its competitors. • it-werke Technology GmbH Solution Using a combination of IBM and IBM Business Partner technology, the retailer launched the first fingerprint identification–based loyalty program and payment method in Germany. The solution allows the client’s loyalty club members to quickly “The system is unusual and and conveniently pay for items via a fingerprint scanner that also tracks purchases distinctive…it has a number and that rewards members through loyalty incentives. Further, it provides Gewandhaus of practical advantages… Gruber with in-depth sales reports that provide decision makers and marketers with particularly in terms of lower valuable insight into the way customers spend their money. operational costs. With no need to print cards, post Benefits them, manage them and • Earned d2.6 million —15 percent — of annual revenue in just six months replace them when lost, the through approximately 4,500 club members savings are considerable.” • Saved d100,000 in operational costs over a comparable card-based — Svenja Wittrowski, project leader, loyalty program Gewandhaus Gruber • Increased revenue by 4% and improved customer satisfaction Page 13 of 60
  • 14. © Copyright IBM Corporation 2008 IBM Corporation 1 New Orchard Road Armonk, NY 10504 U.S.A. Produced in the United States of America September 2008 All Rights Reserved IBM, the IBM logo, ibm.com and DB2 are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trade- marked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or com- mon law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml Other company, product and service names may be trademarks or service marks of others. The information contained in this documentation is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this documentation, it is provided “as is” without war- ranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this documentation or any other docu- mentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software. This document illustrates how one organization uses IBM products. Many factors have contributed to the results and benefits described; IBM does not guarantee comparable results elsewhere. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates. REC03001-USEN-00 Page 14 of 60
  • 15. Case Study QuickView Hardware retailer increases mobile messaging security and flexibility while improving integration with IBM Lotus Hartman Rauta Oy operates a number of hardware and do-it-yourself Overview (DIY) stores for private consumers and the construction industry. Hartman Rauta Oy The company’s retail stores focus on providing products for leisure Vaasa, Finland activities as well as interior decoration and construction. www.hartman.fi Industry Challenge • Retail Hartman Rauta Oy (Hartman) had been using IBM Lotus Notes V7 software hosted on an IBM System i5 server as it legacy e-mail and messaging platform, Employees and was satisfied with the existing system. However, the company wanted to take • 1,000-5,000 advantage of a number of new updates and improvements available in the latest Products version of Lotus Notes software, including new features that would improve mobile • IBM Lotus Mobile Connect ® ® data security. In addition, Hartman wanted to implement a virtual group working • IBM Lotus Quickr ™ environment to support improved communication and collaboration. • IBM Lotus Notes V8.5 ® Solution • IBM Lotus Notes Traveler V8.5 Hartman worked with IBM to upgrade its e-mail and messaging platform to • IBM System i5® IBM Lotus Notes V8.5 software. The upgrade allowed the company to replace its legacy Intellisync software with IBM Lotus Notes Traveler V8.5 software, offering quick access to e-mail and attachments, calendar, address book, journal and to-do list for Lotus Notes mobile users. Hartman also implemented IBM Lotus Mobile Connect V8.5 software, helping to increase mobile security “IBM Lotus software for the company’s virtual private network connections. Hartman implemented provides the tools we IBM Lotus Quickr V8.5 team collaboration software to create a shared work- need to leverage mobile space that helps groups work together on projects and easily share everyday content such as documents and rich media. productivity—without sacrificing security.” Benefits —Jari Pienkuukka, Director, Logistics • Increased security and flexibility of mobile connections and ICT, Hartman Rauta Oy • Improved integration between the Lotus Notes platform and the company’s mobile Symbian operating system–based handhelds • The Domino Attachment and Object Service built into Lotus Notes V8.5 helps save storage capacity by minimizing duplicate file attachments Page 15 of 60
  • 16. © Copyright IBM Corporation 2009 IBM Software Group Route 100 Somers, NY 10589 Produced in the United States August 2009 All Rights Reserved IBM, the IBM logo, ibm.com, Lotus, Lotus Notes, Quickr and System i5 are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml. Other company, product or service names may be trademarks or service marks of others. The informa- tion contained in this documentation is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this documentation, it is provided “as is” without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agree- ment governing the use of IBM software. LOC14140-USEN-00 Page 16 of 60
  • 17. Case Study QuickView Hess Corporation maximizes its profitability with real-time pricing updates thanks to an SOA built using IBM software. Overview Hess Corporation engages in the exploration, production and refinement of crude oil and natural gas. Operating more than 1,350 retail gas stations in Hess Corporation Woodbridge, New Jersey, USA 14 eastern U.S. states, the organization also offers energy-related utilities www.hess.com services to commercial and retail customers. Industry • Chemicals & Petroleum Challenge • Retail Locked in stiff competition, Hess Corporation’s retail gas station business relied on Products smooth supply chain operation to minimize costs and maintain high profit margins. • IBM Lotus Expeditor But the organization’s manual product pricing and inventory processes frustrated • IBM WebSphere Process Server these goals by consuming employee resources and leaving the organization open to IBM Business Partner errors. Even worse, these manual processes led to delays that frequently resulted in • Openstream Inc. data that was out of date before it had been entered into the company’s database. Hess Corporation needed a new inventory solution that would automate processes and keep data up to date. Solution IBM delivered an IBM Retail Integration Framework solution (built using IBM Lotus® Expeditor software) that leverages a service-oriented architecture (SOA) to provide Hess Corporation with real-time insight into the inventory levels of its retail gas “With the Openstream and stations. Using personal digital assistants (PDAs) and software from IBM Business IBM solution, it is so much Partner Openstream Inc., the client’s staff can scan station inventory and upload easier to track inventory that data to a local database. This information is then distributed to the client’s across our 870 stores. It headquarters using Lotus Expeditor and IBM WebSphere ® Process Server streamlines our inventory software via the SOA. The solution also enables Hess Corporation to update processes while providing pricing information across its entire enterprise at one time, removing manual steps. us with the peace of mind Benefits of knowing that the data is • Maximizes profitability by supporting real-time price change updates actually correct.” • Reduces inventory-tracking errors and duplicate orders by eliminating — Hess Corporation manual processes • Streamlines order and inventory processes with an SOA, improving employee productivity Page 17 of 60
  • 18. © Copyright IBM Corporation 2008 IBM Corporation Software Group Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America 04-08 All Rights Reserved IBM, the IBM logo, Lotus and WebSphere are trademarks of International Business Machines Corporation in the United States, other countries, or both. Other company, product and service names may be trademarks or service marks of others. The information contained in this documentation is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this docu- mentation, it is provided “as is” without warranty of any kind, express or implied. In addition, this infor- mation is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any dam- ages arising out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warran- ties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software. WSC14034-USEN-00 Page 18 of 60
  • 19. IBM Australia Isuzu Australia takes the road to collaboration success with IBM® WebSphere and Lotus technologies Overview Problem Isuzu Australia Limited (IAL) has a large national dealer network which is the driving force behind the business. The company needed a solution to improve the speed and accuracy of communications between head office and the dealerships as well as facilitate increased collaboration with business partners. Solution IAL chose to implement IBM WebSphere® Portal linked to other collaboration tools including Lotus® Sametime®, Lotus Quickr™, Portal Document Manager (PDM) and About Isuzu Australia Limited expensive and time-consuming, it was Web Content Management. Isuzu Australia Limited is a wholly- also vulnerable to errors. Dealers were Benefits owned subsidiary of Isuzu Motors responsible for the internal distribution Communications both internally and Limited (Japan), and is responsible for of the various materials, resulting in externally with dealers and partners the marketing, distribution and support frequent failure to reach the appropriate have been radically improved. of Isuzu Trucks in Australia. With just dealer recipients. In addition to this any Information is now hosted centrally 65 employees in Australia, IAL depends errors or update to materials meant a on a web-based portal, allowing all largely on its national dealer network repeat of the above process, and again parties to access real time, up to of over 1000 dealership staff to drive there was no immediate confirmation of date information at any time. its business and maintain its market receipt and use by dealers of the up to leading position. date information. Looking towards the latest technology It was evident to IAL that both internal The Isuzu Truck national dealer and external communications could network is the retail end of the be improved through utilisation of new distribution channel for Isuzu technologies. Aninka Morhall, Staff Trucks sold in Australia, hence the Operations Manager at Isuzu Australia’s requirement for access to the latest Head Office, in Port Melbourne, was materials and information from IAL tasked with sourcing an online portal head office. In 2005 the company and content management solution (IAL) was distributing all information to to supercede the existing manual dealers manually in printed format via processes. surface mail. Not only was this system Page 19 of 60
  • 20. Selection of a portal IAL also elected to expand its Collaboration pays off Morhall evaluated solutions from a collaboration capabilities by adding The implementation of the WebSphere number of leading vendors, but settled Lotus Sametime instant messaging, Portal enhanced by Lotus collaboration on IBM WebSphere Portal along with Lotus Quickr for team based project tools has totally transformed the Workplace Web Content Management management and Portal Document communication processes between (WCM). Commenting on IAL’s reasons Manager (PDM) to create a central Isuzu and its dealer network. Today for selecting IBM technology Morhall repository for documents. “These all materials are hosted on the said, “We chose WebSphere Portal additional systems were implemented portal and dealers simply have to and WCM because this solution was to enable teams to collaborate around log on to instantly access the latest more capable of meeting our needs specific projects and documents and to information. The result has meant than the other offerings in the market, cut down on sharing of documents as vastly improved, more accurate and in particular in terms of its scalability. email attachments” Morhall commented. timely communications with IAL’s We were also interested in all of the dealer network enhancing most areas The portal and collaboration tools were extra collaborative components. of their business operations, and even rolled out to staff and 1000+ dealership As a long time Lotus Notes user ® increasing their ability to sell more staff, with access controlled by a we knew these systems would effectively. The dealers can also log onto complex security structure allowing the integrate seamlessly with our existing Sametime instant messaging through right people to see the right content at technology platforms.” a web interface, enabling them to the right time. The systems were quickly communicate with head office contacts adopted by the majority of users and in real time and quickly trouble-shoot today are used companywide. any current queries. Internal communication within IAL has also improved. Staff can now publish information themselves, expediting access to important information. Instant messaging has also meant employees rely less on email and more business decisions can be made in real time. The “We chose WebSphere Portal and WCM discipline of using a central document because this solution was more capable of repository hosted online means fewer meeting our needs than the other offerings documents are shared as attachments and users can be more confident they in the market, in particular in terms of its are accessing the most recent version. scalability. We were also interested in all of the extra collaborative components. As a long time Lotus Notes user we knew these systems would integrate seamlessly with our existing technology platforms.” - Aninka Morhall, Staff Operations Manager, Isuzu Australia Page 20 of 60
  • 21. Morhall explained, “Now our company Continuing the journey Leading Communication for the Truck announcements are no longer sent The implementation of WebSphere Market leader by email – people know they have to Portal and Lotus collaboration tools As Australian truck market leader for log into the portal if they want to be has given IAL a taste for more 19 consecutive years (20 by the end kept up to date. Anyone can publish technology and the productivity gains of 2008), Isuzu Australia recognises information, it’s simply reviewed for it can deliver. Morhall is currently rolling that maintaining this enviable record appropriateness, and then it is posted out the use of wiki technology which is dependent on providing leading immediately. All our business policies is available in Quickr, “We are going products and services. IAL is also and procedures are hosted on the to start using wiki technology in Lotus committed to demonstrating leadership portal as well.” Quickr to further improve information in all areas of its operations, and by sharing – that’s our latest exciting selecting IBM WebSphere Portal and Since the portal went live in 2006 project here.” Morhall is also looking at Lotus Software technologies to provide Isuzu has realised substantial incorporating IBM’s Workplace learning leading communications between business benefits. The company has management system into the portal IAL and its dealer network its market enjoyed cost reductions since it no to further extend knowledge sharing leadership is more easily maintained. longer has to print materials for the and collaboration based e-learning dealer network and distribute them throughout the organisation. through the mail. Cost aside, Isuzu now distributes information to its dealers instantaneously, confident in the knowledge that dealers are always just a click away from the “Now our company announcements are no latest information. This has reduced longer sent by email – people know they have errors across the entire dealer to log into the portal if they want to be kept network. up to date. Anyone can publish information, it’s Armed with the latest technology simply reviewed for appropriateness, and then it is tools, collaboration and knowledge posted immediately. All our business policies and sharing has increased – for example teams can discuss a particular procedures are hosted on the portal as well.” document over a web meeting, or - Aninka Morhall, Staff Operations Manager, Isuzu Australia individuals can access the real-time status of a project, task or milestone simply by logging into the portal. Page 21 of 60
  • 22. For more information Please call 132 426 in Australia or 0800 801 800 in New Zealand. © Copyright IBM Australia Limited 2008 ACN 79 000 024 733. © Copyright IBM Corporation 2008. All Rights Reserved IBM Australia Limited IBM Centre Level 13, 601 Pacific Highway St Leonards NSW 2065 08/08 IBM, the IBM logo, Websphere, Lotus, Sametime, Quickr and Lotus Notes are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries or both. Intel, the Intel Inside Logo and Pentium are registered trademarks of Intel Corporation or its subsidiaries in the United States or other countries. Other company, product and service names may be trademarks or service marks of others. Important Privacy Information: If you would like to request access to or correction of your details or if you or your organisation would prefer not to receive further information on IBM products, please advise us on: 132 426 (Australia) or 0800 801 800 (New Zealand). This customer story is based on information provided by AusRegistry and illustrates how one organisation uses IBM products. Many factors have contributed to the results and benefits described. IBM does not guarantee comparable results elsewhere. Designed by the IBM Grafxlab. GL_10081 Page 22 of 60
  • 23. IBM Case Study IBM Major retailer Evaluating inventory strategies Overview  Objective: A retailer with billions in annual sales had seven distribution centers (DCs) to serve its stores. The retailer was growing rapidly through acquisitions and organic growth. This produced a hybrid inventory strategy with some stock-keeping units (SKUs) stored at all the DCs and others at only a few centralized locations. The assignment of SKUs was largely based on the practices of the acquired companies. The retailer wanted to determine whether its inventory strategy was appropriate for its business. scenarios were developed for each Best of both inventory strategies strategy. The retailer was able to Using the centralized strategy, the  Solution: reallocate nearly 25 percent of its retailer is able to reduce its inventory The decentralized strategy had SKUs between the two strategies, levels through risk-pooling and more suppliers drop products at the DCs, with a projected reduction in accurate forecasts. Furthermore, the while the centralized strategy had transportation and inventory holding larger volume at the central locations products go to central DCs and then costs of more than U.S.$1.5 million. means more frequent shipments to other DCs. The latter system from suppliers, which results in lower resulted in transportation costs of  Benefits: inventory levels. But this strategy incurs nearly U.S.$5 million a year between • Lower transportation costs additional transportation costs be tween the central and store-facing DCs. • More accurate inventory analysis central and store-facing DCs, as well as Using IBM® ILOG Inventory Analyst, • Improved distribution extra handling costs as products have the inventory planning solution from to flow between DCs and then on to the LogicTools (now IBM ILOG), stores. Page 23 of 60
  • 24. IBM Each inventory strategy was evaluated group together. Also, sensitivity analysis with IBM ILOG Inventory Analyst. The was conducted to determine how the ® factors modelled included product strategy would change if inventory costs, inventory holding costs, demand, holding costs were changed. forecast error, service levels, supplier lead times and reliability, receiving Benefits © Copyright IBM Corporation 2009 frequency, and transportation times and By comparing IBM ILOG Inventory IBM Corporation costs. A total cost for each SKU was Analyst’s recommendations with the Software Group Route 100 determined for each strategy, and the current distribution system, the retailer Somers, New York 10589 resulting costs compared. This helped was able to identify SKUs as candidates U.S.A. determine which SKUs to assign to each for transition between the centralized Produced in the United States of America inventory strategy, and the projected and decentralized inventory strategies. December 2009 savings from doing so. Nearly 25 percent of the SKUs fell All Rights Reserved into this category. By making these IBM, the IBM logo, and ibm.com are trademarks For operational reasons, some product changes, the retailer projected savings or registered trademarks of International categories could not use a hybrid of over U.S.$1.5 million per year, mainly Business Machines Corporation in the United States, other countries, or both. If these and other strategy, and an aggregated decision from reductions in transportation and IBM trademarked terms are marked on their first was made for these categories by inventory holding costs. occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. considering all the products in the registered or common law trademarks owned by Based on extensive analysis of the IBM at the time this information was published. Such trademarks may also be regis-tered or results from the IBM ILOG Inventory common law trademarks in other countries. A Analyst model, the customer was able current list of IBM trademarks is available on the Web at “Copyright and trademark information” at to save millions of dollars annually ibm.com/legal/copytrade.shtml in distribution costs, as well as Other product, company or service names may significantly reduce inventory. This be trademarks or service marks of others. gave the customer more visibility into This case study is an example of how one the downstream supply chain, thereby customer uses IBM products. There is no increasing manufacturing flexibility guarantee of comparable results. and further reducing raw material References in this publication to IBM products inventories. In addition, the length of and services do not imply that IBM intends to make them available in all countries in which IBM the cash-flow cycle was reduced by operates. 50 percent through direct shipping to customers. Products and services used Software IBM® ILOG Inventory Analyst Recyclable, please recycle. WSC14123-USEN-01 Page 24 of 60
  • 25. IBM Global Business Services Max Bahr Case Study Supply Chain Management “Do-it-yourself” retailer uses IBM solution to automate replenishment and help ensure high shelf availability A change in business focus in the stores; 70 percent arrive directly Overview Max Bahr Holzhandlung GmbH, a from suppliers. A second warehouse is pioneer since 1879 in Germany’s scheduled to begin operations this year. Challenge highly competitive do-it-yourself (DIY) Meet customer demand for any of market, was at a crossroads. After Max Bahr employs approximately 4,500 40,000 products in over 80 outlets with going through a busy period of opening employees, all of whom are dedicated low replenishment and storage costs up new stores during the 1990s, the to one objective: providing superior DIY retailer wanted to refocus its on-floor consultation and service to Why become an On Demand business energy on driving up sales per square every customer, whether layperson or To help drive up sales per square meter of existing floor space. That professional. The company strives to meter of existing floor space, Max meant ensuring high shelf availability offer premium goods and services at Bahr needed an approach that would for every item Max Bahr carries. DIY the lowest possible prices. provide the highest product availability stores typically carry few substitutable levels for customers, while optimizing products, and customers have a high To help implement its revised business inventory and storage costs propensity to buy when they are in the plan, Max Bahr needed an automated, store. centralized replenishment system that Solution could provide the highest customer IBM Dynamic Inventory Optimization With revenues of 816 million euros in service levels, while optimizing Solution, a comprehensive offering 2005, Max Bahr operates more than inventory and storage costs. “We were that helps companies determine 80 home and garden centers around making replenishment decisions locally optimal inventory levels based on cost the Federal Republic of Germany, at each store,” says Anja Schöning, constraints, forecasts, demand patterns as well as an e-commerce Web site. project manager at Max Bahr. “Planners and service level requirements Its inventory of some 40,000 items, would look at the store’s point-of- some of which carry the Max Bahr sale (POS) data and manually place Key Benefits brand, are sourced globally and cover replenishment orders.” Each store has - Customer service levels of 99 percent everything the “do-it-yourselfer” needs a POS system that runs on an IBM or higher for the home and garden, including eServerTM iSeries™ server. However, - Over 90 percent of replenishment wallpaper, carpets, wood, electrical not all stores had very good and proposals turn into orders without equipment, tools, DIY manuals, garden experienced planners — often resulting any review furniture and a huge assortment of in poor availability and high opportunity - Improved demand forecasting, fewer plants and flowers. A central warehouse costs. Moreover, it was expensive planners and lower replenishment replenishes 30 percent of the products employing so many planners. costs Page 25 of 60
  • 26. Answering the challenge Nightly replenishment runs © Copyright IBM Corporation 2006 In 2003, after considering a number Today, the Dynamic Inventory IBM Global Services Route 100 of alternatives, Max Bahr turned to Optimization Solution performs Somers, NY 10589 IBM, which proposed the IBM Dynamic eighty to ninety percent of Max Bahr’s U.S.A. Inventory Optimization Solution. After inventory replenishment. There is no Printed in the United States of America a one-month requirements study, the ERP system involved. 12-06 IBM team began incorporating the All Rights Reserved business rules needed by the solution Shortly after midnight, the stores IBM, the IBM logo, eServer and iSeries are to forecast demand, calculate safety transfer POS data — approximately trademarks or registered trademarks of Inter- stock, batch sizes and reorder points, 15–20 million transactions — to a national Business Machines Corporation in the and compute replenishment order central database and add them to a United States, other countries or both. proposals for the entire inventory. rolling repository that contains a two- Other company, product and service names year history of every product in every may be trademarks or service marks of others. “We wanted IBM to build in as much store. Using this transaction dataset, References in this publication to IBM products business logic as possible, so that the Dynamic Inventory Optimization or services do not imply that IBM intends to replenishment orders could be sent to Solution performs a two-echelon make them available in all countries in which the warehouse and to suppliers without analysis, looking first at the outlets IBM operates. ever being reviewed by a planner,” and then at the central warehouse This document is based on information pro- explains Schöning. That required to generate forecasts and order vided by Max Bahr and illustrates how one writing client-specific modules that proposals. Each of the approximate 85 organization uses IBM products. Many factors have contributed to the results and benefits considered variables such as maximum runs of the solution takes around one described; IBM does not guarantee compa- shelf or bin space for an item, minute, constituting up to four million rable results elsewhere. upcoming promotions, supplier lead replenishment decisions. The entire times, free shipping on orders above a process is completed by seven o’clock certain amount, product assortments in the morning, before the planners and odd lots. arrive at work. Any replenishment issues found by the solution go on For more information an exception report to be manually The IBM Dynamic Inventory Optimization “The [solution] has become one of resolved. Solution is part of the IBM Center for the most important business tools we The results from the Max Bahr-IBM Business Optimization’s solution portfolio, which includes solutions in the areas of have for positively impacting sales collaboration are impressive. Customer risk management, marketing investment, service levels at the stores have and keeping us competitive.” reached an average of 99 percent or pricing and supply chain management. The center brings together IBM’s industry more. What’s more, over 90 percent of and process expertise, hardware and — Anja Schöning, project manager, the order proposals are automatically business performance software, and the Max Bahr turned into actual orders to suppliers company’s deep computing and advanced without any review by, what is now, analytics capabilities to tackle the most only a handful of planners in the difficult challenges facing business and “The capabilities and flexibility of company. government. the Dynamic Inventory Optimization Solution allowed us to respond quickly “The Dynamic Inventory Optimization To learn more about IBM Global Business and effectively to Max Bahr,” says Solution has become one of the most Services, contact your IBM sales Richard Boedi, an IBM researcher on important business tools we have for representative, or visit: the team. “Within months of starting positively impacting sales and keeping the project, we were managing us competitive,” concludes Schöning. ibm.com/bcs inventory at four outlets and with one major supplier.” To learn more about the IBM Dynamic Inventory Optimization Solution and the IBM Center for Business Optimization, contact your IBM representative or visit: ibm.com/services/cbo BCC00102-USEN-01 Page 26 of 60
  • 27. Let’s build a smarter planet METRO Group tracks meat products from production to point of sale. Overview In Germany, there have been several incidences of moldy meat being sold by different meat wholesalers. Although this had not been a problem METRO Group Düsseldorf, Germany for METRO Group, customers were aware of fresh meat problems at www.metrogroup.de other retailers. Industry • Retail Challenge Products METRO Group’s retail store meat tracking system was entirely manual. Expiration • IBM Global Business Services date monitoring was done visually, a time-consuming and error-prone process. • IBM InfoSphere™ With 800 to 1,000 meat trays inside the self-service counter of a single store at Traceability Server any given time, METRO Group needed to gain a better grasp of the inventory management of its meat products, while working to improve customer food safety. Solution Working with IBM Global Business Services in a first-of-a-kind project, METRO Group used IBM InfoSphere™ Traceability Server software as the backbone of its new meat-tracking solution. Meat trays are tagged with radio frequency “METRO Group now has identification tags. Each meat tray is visible during its complete in-store life- cycle, from packaging to point of sale. unprecedented transparency in its in-store meat processes Readers throughout the lifecycle of the meat tray continuously update the inventory of the real,- Future Store management system. Data is stored by the IBM InfoSphere Traceability Server in Tönisvorst.” software, enabling improved inventory management and helping ensure product — Dr. Gerd Wolfram, Head of CIO-Office, and consumer safety. IBM Global Business Services provided process consulting, METRO AG dashboards and the architecture for the solution, as well as customization. Benefits • Improves inventory management with demand-driven forecasting, reducing overstocks and write-offs • Increases consumer safety by sending system alerts for expired or nearly expired products, which can then be removed from inventory • Is easily scalable and reusable, thanks to standardized interfaces, enabling METRO Group to deploy track-and-trace solutions in other sales lines as well Page 27 of 60
  • 28. © Copyright IBM Corporation 2009 IBM Corporation 1 New Orchard Road Armonk, NY 10504 U.S.A. Produced in the United States of America November 2009 All Rights Reserved IBM, the IBM logo, ibm.com, and Smarter Planet are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml The information contained in this documentation is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this docu- mentation, it is provided “as is” without warranty of any kind, express or implied. In addition, this infor- mation is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any dam- ages arising out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warran- ties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software. This document illustrates how one organization uses IBM products and services. Many factors have contributed to the results and benefits described; IBM does not guarantee comparable results elsewhere. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates. GBC03030-USEN-00 Page 28 of 60
  • 29. Let’s build a smarter planet Moosejaw Mountaineering reaches new heights of customer engagement through social commerce. Overview n The Need To thrive in the highly competitive market for outdoor adventure gear, Moosejaw Mountaineering needed to create a customer experience that would engage a customer community whose appetite for extreme sports is matched by a hunger for commu- nication and collaboration. n The Solution Based in Madison Heights, Michigan, Moosejaw Mountaineering, Inc. is one of the nation’s leading outdoor-adventure retailers. With seven retail locations employing 250 in Michigan and Chicago, the Moosejaw sought to make its site company’s online retail, Moosejaw.com, was rated a top 50 Web site according to Internet Retailer. the go-to destination for young, hip high school and college students n Key Benefits Online commerce has changed a and for hard-core outdoor enthusi- • Increased revenue from an lot in the decade since it entered asts by embedding rich community expected increase in conversion into the cultural mainstream. Driven features into its online commerce rate (based on an initial increase by relentlessly rising customer experience, thus becoming one of to 50 percent) expectations, sites have become the first outdoor-adventure retail- • Expected increase in customer loy- easier to use, merchandising has ers to make multichannel “social alty and word-of-mouth expansion improved and, to put it simply, com- commerce” the cornerstone of its through a more engaging and col- panies have gotten better at online growth strategy. laborative online retail experience commerce because they’ve come • Ability to deliver seamless to understand its many nuances. messaging, programs and In spite of these changes, however, customer experience across the essential character of online all channels retail – namely, the extension of tradi- • Expected increase in customer tional retail practices to the Internet satisfaction through richer, more channel – has remained largely informative pre-purchase support unchanged. So, too, have some basic (e.g., customer ratings) and long-held assumptions about the way consumers buy and what they are looking for from an online retailer. Page 29 of 60
  • 30. Enriching the retail experience with the power of social networking The traditional view of online transactions is anchored on the idea that online Business Benefits stores are first and foremost a venue for transactions, which, by and large, tend • Increased revenue from an expected to be tightly structured interactions involving the buyer and the retailer. Within increase in conversion rate (based on this interaction, the retailer’s key job is to provide customers with the information an initial increase to 50 percent) they need to purchase – such as pricing, product descriptions and orderly • Expected increase in customer loyalty merchandising – and to deliver all within the context of a superior customer and word-of-mouth expansion through a more engaging and collaborative experience. However, the way customers are seeking and processing this infor- online retail experience mation is beginning to change, and that’s expected to have a big impact on • Ability to deliver seamless messaging, tomorrow’s online experience. programs and customer experience across all channels The biggest reason is the sweeping impact of Web 2.0, a term that describes • Expected increase in customer a paradigm shift in the way people use the Internet to interact with each other – satisfaction through richer, more and with information. The key earmark of Web 2.0 is the exploding popularity informative pre-purchase support of user generated content, examples of which range from blogs, wikis and (e.g., customer ratings) discussion groups to YouTube and MySpace. What each has in common is a • Stronger brand through a more decidedly “bottom-up,” approach to generating and sharing information that’s consistent multi-channel experience heavy on collaboration and light on hierarchical structures. So how does this impact online retail? The answer, in large measure, lies in demographics and changing expectations. Community meets commerce When the younger consumers driving the Web 2.0 wave want to buy online, they’d prefer the same kind of collaborative, bottom-up information exchange in their shopping experience. This, in effect, resets the goals and parameters that retailers have to consider in configuring their online strategies. While issues “ Our strategy has been to like merchandising and navigation remain important, retailers also need to reinvent the way people provide an environment that supports the interaction of customer communities, which are exerting more and more influence on buying behavior. This is espe- shop for outdoor, surf, cially true for products that reflect a lifestyle or a set of emotional values. That’s skate and snowboard why Moosejaw Mountaineering (www.moosejaw.com), a fast-growing retailer apparel and equip- specializing in outdoor, surf, skate and snowboard equipment and apparel, is ment. IBM – through its such a good example of how it can work. Relying on a host of retail solutions technology and retail from IBM and IBM Business Partner CrossView, Moosejaw sought to make its site the go-to destination for young, hip high school and college students and thought leadership – for hard-core outdoor enthusiasts by embedding rich community features into has been instrumental its online commerce experience, thus becoming one of the first retailers to make in helping us realize “multi-channel, social commerce” the cornerstone of its growth strategy. this vision.” – Jeffrey Wolfe, COO, Now a fast-growing chain with seven stores and 250 employees, Moosejaw Moosejaw Mountaineering owes much of its success to a fiercely loyal customer base. The roots of this loyalty lay in the company’s ability to make shopping fun, as well as its abil- ity to provide the right product mix, strong product and technical support and Page 30 of 60 2
  • 31. a constant drive to develop unique, innovative ways to communicate with Solution Components their customer. But with no shortage of competitors in the “outdoor adventure” space – many large and well known – Moosejaw faces the ongoing challenge of Software making itself the destination of choice. Rising to this challenge, the company • IBM WebSphere Commerce has introduced a steady stream of features that have resonated with custom- • IBM WebSphere Remote Server ers, including over 50,000 customer reviews, texting of tracking numbers and • IBM DB2 promotions to mobile phones, and its Moosejaw Madness community, where Hardware customers post photos from their latest adventures, read the irreverent Daily Remark and immerse themselves in Moosejaw’s unique culture. While features • IBM SurePOSTM 500 Express like these have been highly successful, Chief Operating Officer Jeffrey Wolfe Services believes that Moosejaw has only scratched the surface of what it can do for its • IBM Toronto Software Lab customers. “We are on the verge of truly blurring the lines between Web, retail, • IBM Global Technology Services mobile, catalog, call center and kiosk, taking the best of each channel and • IBM Retail Store Solutions making it possible across all channels.” IBM Business Partner Moosejaw’s approach to multi-channel, social commerce was to implement a • CrossView new solution from the ground up with help from IBM and IBM Business Partner Timeframe CrossView. One of the key benefits of the solution is its ability to create a seam- • Core platform implementation: 9 months less, interactive, community shopping experience across every sales channel. • Social commerce platform: 5 months Customers can interact with Moosejaw staff and with other customers on the Moosejaw Web site and then connect those threads on their mobile phones and when they come into the Moosejaw retail stores. Perhaps more valuably, it provides Moosejaw with a ready-made platform for integrating these social net- working capabilities deeply into its commerce platform. Imagine, for example, a customer looking for a tent suitable to use at 20,000 feet and 20 below zero. Instead of simply searching through a catalog, customers can now search by What Makes it Smarter a product’s rating, while also taking into account customer profiles that include Moosejaw Mountaineering is making product usage experience. Getting product feedback from someone who has itself one of the leading places to be for actually used that tent on Mount Everest or K2 is a far cry from standard catalog outdoor adventurers by leading the way information – and that’s exactly what Moosejaw is shooting for. Key to the realiza- in the integration of social networking capabilities like blogging, group discus- tion of this vision is the company’s work with IBM Toronto Software Lab, which is sion and customer product ratings across working with Moosejaw to develop this breakthrough capability. all of its retail channels. Moosejaw’s physical stores also figure prominently in its strategy. A standout feature of the new solution is its ability to provide truly seamless support to – and thus create a common, superior experience through – all of Moosejaw’s channels. Key to this capability is CrossView’s Point of Sale solution which extends the capabilities of IBM WebSphere® Commerce into retail stores with a solution that utilizes WebSphere Commerce as its engine at the enterprise and IBM WebSphere Remote Server in the stores. CrossView’s solution utilizes a common information platform based on IBM DB2® and validated for the IBM Retail Integration Framework, making it easy for Moosejaw to extend its Page 31 of 60 3
  • 32. online channel programs and tactics into its store environment. For instance, using IBM SurePOS 500 dual-screen point-of-sale terminals in-store customers are now able to buy, ship and pay with the exact same services they are familiar with online, and they will be offered the same targeted promotions and cross- sells while they read reviews, blogs and recommendations. With all this new © Copyright IBM Corporation 2009 technology, that same fun and irreverence that has been a part of the Moosejaw IBM Corporation culture from the beginning will now be part of the in-store check-out process. 1 New Orchard Road Armonk, NY 10504 U.S.A Multichannel benefits Produced in the United States of America To enable a consistent shopping experience for customers across channels, September 2009 the Moosejaw solution integrates and registers orders and inventory changes All Rights Reserved for every channel, offering increased visibility and optimum resource alloca- IBM, the IBM logo, ibm.com, Smarter Planet, DB2, SurePOS and WebSphere are trademarks tion across channels. The multichannel capability also provides Moosejaw’s of International Business Machines Corporation, in-store sales associates and call center agents with the tools they need registered in many jurisdictions worldwide. Other product and service names might be to provide more interactive and insightful support to customers. It’s seen in trademarks of IBM or other companies. A current the small things, like being able to tell a customer how close they are to a list of IBM trademarks is available on the Web at www.ibm.com/legal/copytrade.shtml reward point threshold or asking about their satisfaction with a recent pur- This case study illustrates how one IBM customer chase. But it’s also seen in the bigger things, like the system’s ability to see uses IBM products. There is no guarantee of inventory in near real time so an associate can find just the right Patagonia comparable results. coat for a customer – whether it’s in the store, in the warehouse or at a supplier’s References in this publication to IBM products or services do not imply that IBM intends to warehouse – and send the order via XML straight to the other shop, warehouse make them available in all countries in which or supplier for processing and fulfillment. It’s seen in the way it enables call IBM operates. center agents to get a full profile of a customer and provide the most knowl- edgeable and comprehensive support. Altogether, it’s about providing the kind of customer experience that will continue to make Moosejaw the premier destination for the outdoor, surf, skate and snowboard community and in the process enable Moosejaw to sustain its high rate of growth. Wolfe sees the company’s advanced social commerce capabilities playing an important role by strengthening loyalty, increasing the conversion, or “browse-to-buy,” rate of the Moosejaw site and by building word-of-mouth support, which thus far has been one of the biggest factors in its growth. “Our strategy has been to reinvent the way people shop for outdoor, surf, skate and snowboard apparel and equipment,” says Wolfe. “IBM – through its technology and retail thought leadership – has been instru- mental in helping us realize this vision.” For more information Please contact your IBM sales representative or IBM Business Partner. Visit us at: ibm.com/retail ODC03073-USEN-02 Page 32 of 60
  • 33. IBM Case Study Sears Canada increases code reuse by 5%-15% with SOA solution Overview ■ Challenge Deliver on business objectives and reduce development cost through code reuse to eliminate coding and recoding of the same integration, and speed the exchange of information with business partners to improve business agility to be competi- tive in today’s economy ■ Solution Supplier information exchange A successful retailer needs to change “ Already, Sears Canada quickly to keep pace with shifting cus- service enabling exchange of can clearly see the tomer tastes. For Sears Canada, this product information between has meant improving the agility of its ROI advantages of our Sears Canada’s legacy systems supply chain. IBM SOA solution.” and 3,000 suppliers — Miki E. Uhlyarik, Middleware ■ Benefits Sears Canada is a retail powerhouse and Integration Architect, Sears — 5%-15% reuse of code, low- Canada with a strong heritage in large ering costs and improving brick-and-mortar stores and a compre- developer productivity hensive product catalog with associ- — Faster deployment of prod- ated merchandise pick-up locations. ucts and services The company operates 196 company- — Improved customer, owned stores, 178 dealer stores, dealer, supplier and partner 64 home improvement showrooms experience and 1,850 catalog merchandise pick-up locations. Today, the company partners with about 3,000 suppliers to makes sure all of its sales channels—stores, catalog and online—are fully stocked with the right mix of products that consumers want at the right price. Page 33 of 60
  • 34. Streamlining business and IT processes From the business side, Sears Canada needs to streamline its internal processes to achieve faster time to market even as it reduces the cost of bringing new mer- chandise to its customers. From the IT side, it needs to streamline development and integration to enable it to exchange data with its suppliers more efficiently and expeditiously. The IT infrastructure team, led by Middleware and Integration Architect Miki E. Uhlyarik, has the responsibility of integrating new functionality with the company’s legacy systems, which still run a very large part of the business and act as the main repository of corporate data. Sears Canada faced a major challenge in imple- menting changes quickly enough in its legacy development processes to keep up with the fast pace of business change. “We faced point-to-point, fairly rigid connections,” says Uhlyarik. “We couldn’t very easily replace components. What’s more, any change to one component had to be made in all the other components.” After researching service oriented architecture (SOA), the team recognized it as a valuable concept that they could apply. “SOA offered us a framework both on the conceptual and on the technical level that could help us overcome issues related to the integration of internal and external business systems,” says Uhlyarik. Uhlyarik’s team anticipated that SOA would enable code reuse to eliminate coding and recoding of the same integration; reduce development costs over the long term; and speed the exchange of information with business partners to improve business agility. Investing in SOA skills and infrastructure Starting essentially from scratch, the infrastructure team realized it had to prepare before it could begin employing an SOA approach to coding services or building applications. The team established an SOA Center of Excellence (CoE) and began publicizing it. The CoE initially functioned as an SOA information, education and training clearing- house. The company leveraged its more than 30-year partnership with IBM to raise its CoE’s understanding of SOA and begin orienting people in the new approach. Sears Canada also initiated IBM training programs to close the skills gap that fre- quently hinders SOA projects, especially in the early stages. The IBM training addressed SOA concepts, Web services, XML and security. The team even began educating management long before a single service had been developed. “We found that we needed support from IT management because SOA required a major investment before the actual applications could be put in place,” says Uhlyarik. Page 34 of 60
  • 35. The company installed IBM System p® servers running AIX® to host Solution Components IBM WebSphere® Application Server as the core component of the application foundation based on Smart SOA. IBM WebSphere Application Server provides an Servers innovative, performance-based application foundation for building, deploying, and ● IBM System p® managing robust, agile, and reusable services and SOA applications of all types. Software The production environment is configured for high availability. In addition, Sears ● IBM AIX® Canada set up separate server environments for staging and for development. The company also acquired IBM WebSphere Enterprise Service Bus, which it imple- ● IBM WebSphere® Application Server mented right away, and WebSphere Service Registry and Repository. ● IBM WebSphere Enterprise Service Bus Exchanging data with suppliers in just a few clicks ● IBM WebSphere Service Registry The company’s initial implementation focused on a simple system integration bus and Repository intended to streamline integration. For that, it created a Web services gateway, mediation flows and JAX-RPC to implement common infrastructure components that Web services-based applications would need. Then the team went looking for an application requiring deeper-level integration and a higher level of reuse. This project would be the pilot implementation of WebSphere Enterprise Service Bus. The company needed to exchange product data between its 3,000 suppliers and its internal database and IBM CICS® systems. The exchange of this product information—sizes, colors and various other product attributes—is essen- tial to getting products in front of Sears’ customers in a timely way. Until the infor- mation is in the system, Sears has no way to market and sell the product through any of its channels. Uhlyarik’s team chose to pilot SOA by creating a supplier information exchange service. Initially the team would test the service with one vendor. After that, the plan was to roll it out to all vendors. “It will save a great deal of time spent retyping and scanning the data each time it is updated. And with 3,000 suppliers, just think of the potential time savings,” notes Uhlyarik. Following an initial proof-of-concept, the ESB team can now make the supplier information exchange service available for other suppliers with just a few clicks, while the custom developers continue to create more custom point-to-point con- nections. WebSphere ESB converts messages as needed to maintain the flow of information through the system. The savings will grow dramatically with each supplier joining the system. “We have to look ahead two or three years to see the payback,” says Uhlyarik. “But already, Sears Canada can clearly see the ROI advantages of our IBM SOA solution.” Page 35 of 60
  • 36. 5%-15% increase in code reuse © Copyright IBM Corporation 2009 IBM Corporation Every IT initiative at Sears Canada must be based on a clear business case with a Software Group positive payback. In the case of vendor data exchange, the infrastructure team Route 100 Somers, NY 10589 estimated 5%-15% of code was suitable for reuse and calculated that the effort U.S.A. would deliver an attractive payback even at a seemingly low 5% level of reuse. Produced in the United States of America April 2009 All Rights Reserved In addition to hard-dollar savings realized through code reuse, the benefits Sears IBM, the IBM logo, ibm.com, AIX, CICS, Canada expects to receive from its SOA investment include: System p and WebSphere are trademarks or registered trademarks of International Business Machines Corporation in the United States, ● Greater flexibility, responsiveness and efficiency other countries, or both. If these and other ● Faster deployment of products and services IBM trademarked terms are marked on their first occurrence in this information with a ● Improved customer, dealer, supplier and partner experience trademark symbol (® or TM), these symbols ● Improved developer productivity indicate U.S. registered or common law trademarks owned by IBM at the time this ● More reliable code and fewer support problems information was published. Such trademarks ● More efficient maintenance may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at The most prominent sign of the success of the Sears Canada SOA initiative, how- “Copyright and trademark information” at ibm.com/legal/copytrade.shtml. ever, can be seen in the response of senior IT and business management to the Other product, company or service names may effort. “Our 2009 plan with SOA was approved at the executive level. The plan has be trademarks or service marks of others. made it through a very rigorous analysis where a lot of projects just fell by the way- This case study is an example of how one customer uses IBM products. There is no side,” Uhlyarik concludes. That represents success by any measure. guarantee of comparable results. References in this publication to IBM products and services do not imply that IBM intends to For more information make them available in all countries in which Contact your IBM sales representative or IBM Business Partner. Visit us at: IBM operates. ● ibm.com/soa ● ibm.com/websphere For more information on Sears Canada, visit: www.sears.ca WSC14089-USEN-00 Page 36 of 60
  • 37. Case Study Quickview South American retailer improves productivity by delivering information to the point of sale using IBM WebSphere Portal Retailer deploys IBM WebSphere Portal Enable and IBM Lotus Workplace Overview Web Content Management to enable an enterprise-wide sales South American Retailer information portal, dramatically improving productivity and information Industry access while eliminating millions of printed pages annually. • Retail Employees Challenge • 16,000 The IT infrastructure at a major South American retailer could not support reliable distribution of information to employees within the timeframes required to Products support sales. The company was losing business because salespersons could • IBM® WebSphere® Portal not provide detailed product information to customers. Additionally, the process Enable for communicating new product lines and weekend offer information was highly • IBM Lotus® Workplace Web inefficient, and the company lacked a central repository for the information. Content Management • Linux® By improving its communications systems to provide seamless information delivery from headquarters to the sales floor, the retailer could deliver immediate, accurate information to each salesperson in order to answer any and all product questions a customer might have. Solution The company chose a portal solution comprised of IBM WebSphere Portal Enable and IBM Lotus Workplace Web Content Management running on the Linux operating system. These tools have enabled the company to deploy an intranet product and sales information portal across the enterprise. With Lotus Workplace Web Content Management, information is easily managed and updated from back- end systems at the company’s headquarters and accessed via Linux desktops and thin clients in each store. The Web site provides updated content regarding every pertinent aspect of sales. With 10 to 20 terminals in each retail location, every salesperson now has convenient access to product details and information on sales and promotions. Page 37 of 60
  • 38. Benefits © Copyright IBM Corporation 2009 • The new system reduces unnecessary workload and improves productivity IBM Corporation Software Group across the company because all salespeople now have complete and immediate Route 100 access to the information needed to make a sale Somers, NY 10589 U.S.A. • The company has realized a massive reduction in printing costs, eliminating Produced in the United States of America approximately 180,000 printouts per weekend and over 10 million printouts June 2009 All Rights Reserved annually IBM, the IBM logo, ibm.com, Lotus and WebSphere • The company can immediately respond to competitor promotions by store area are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. with a competitive initiative and easily distribute the right information to affected A current list of IBM trademarks is available on the Web employees at “Copyright and trademark information” at ibm.com/ legal/copytrade.shtml. Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. Other company, product or service names may be trademarks or service marks of others. The information contained in this documentation is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this documentation, it is provided “as is” without warranty of any kind, express or implied. In addition, this information is based on IBM’s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this documentation or any other documentation. Nothing contained in this documentation is intended to, nor shall have the effect of, creating any warranties or representations from IBM (or its suppliers or licensors), or altering the terms and conditions of the applicable license agreement governing the use of IBM software. LOC14125-USEN-00 Page 38 of 60
  • 39. Service Oriented Architecture DeepView case study October 2008 Australian retailer focuses on business processes as the entry point to service-oriented computing. Spotlight turns around IT with business process-based SOA Page 39 of 60
  • 40. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 2 Introduction Contents Founded in 1973 by two brothers, Spotlight Proprietary Limited is a privately owned crafts and soft furnishings retailer based in Australia, with 106 stores 3 The challenge: an IT located across Australia, New Zealand, Singapore and Hong Kong. In addition, infrastructure at risk of it has 12 Anaconda superstores in Australia, selling outdoor adventure goods, imminent failure clothes and equipment. 4 The strategy for change: start with understanding the Spotlight is a very large business, with more than 6,000 employees. Stores business processes and catalogs generate approximately one million sales transactions a day, with 6 Developing a roadmap for annual sales approaching A$1B in 2008. The product mix is highly seasonal implementation and rotates quickly throughout the year. At any one time, some 250,000 out 7 Integrating legacy and new of 500,000 SKUs are active. A mission-critical loyalty program is another systems with a services-based measure of Spotlight’s success, with five million registered customers. approach 7 Selecting the right tools for Anne McDiarmid is the Chief Information Officer for Spotlight Proprietary end-to-end process control Limited. Her responsibility is to provide the technology to support both the 10 Where is Spotlight today? Spotlight and Anaconda brands, plus provision back-office IT. When she 11 Taking the transformation to arrived at Spotlight, IT was at a breaking point. the next level 13 Lesson learned: bring in the In this DeepView, Ms. McDiarmid discusses how she and KAZ Group, an IBM right help at the right time Business Partner, introduced process- and service-based computing to support 14 The final analysis: it begins the Spotlight business. KAZ Group, located in Australia, focuses predomi- and ends with process nantly on applications development and systems integration. management Page 40 of 60
  • 41. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 3 The challenge: an IT infrastructure at risk of imminent failure Solution components When I joined Spotlight in late 2006, the company had enjoyed 35 years of highly successful retailing and continual growth. As a result, Spotlight was Software heavily invested in property — the bricks-and-mortar side of the business. • IBM WebSphere® Process Server • IBM WebSphere Commerce Server However, the company had only made information technology an investment • IBM WebSphere Portal priority for the previous seven or so years — and that was without sufficient stra- tegic dimension or vision. For example, the point-of-sale (POS) system had only been in our stores for some seven years—and even it was 10 releases behind the current version. We also had several homegrown legacy systems, plus one com- mercial financial package that had been hacked beyond recognition. It might originally have been “out-of-the-box,” but this was now impossible to tell. And we had middleware connecting to middleware (Figure 1). Insufficient investment in IT infra- structure had left Spotlight without Suppliers a way to provide the business www with accurate sales, product or price information. Goods Receipt Merchandising, Marketing, Finance Figure 1. Before the start of its IT transformation initiatives, Spotlight’s infrastructure had not kept pace with the needs of the rapidly growing retail operations. We had no parallel processing. Everything was performed overnight, sequentially. Even basic sales information was lacking, or so out of date as to be largely worthless. Instead of daily sales summaries, we were waiting until Thursday each following week to find out the previous week’s sales. And, depending on where you went, you could get a different version of what sales were. Page 41 of 60
  • 42. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 4 To make matters worse, we could not guarantee product and price. We could Highlights not tell you what inventory was in the business, nor did we have any means of knowing what we had sold. Instead, we had a simple “system” that replenished what we sold — whether it was old stock or new stock. Furthermore, we did not run on traditional min-maxes. We had no visibility across the chain of how our product sales were being achieved in terms of growth. What we had, therefore, was a failure in terms of delivery to our stores, and therefore to our customers. Yet we continued to be highly successful. We kept adding stores. Unfortunately, that meant we kept adding load to our already- stressed legacy systems. We had failures in products and pricing every day, just The retailer’s continued growth basically because we had no message queuing or even automatic restart capa- resulted in new stores, which put bility. In short, the business may have been growing, but the IT infrastructure more stress on already overloaded was simply not keeping up. legacy systems. The strategy for change: start with understanding the business processes From soon after my appointment, it was clear that my priority was to address these shortcomings. The imperative had become finding an escape from what all too easily might become a business threatening trap. Once I understood the scale of the issues we were facing and the resources I had to work with, I real- ized we needed additional help. Spotlight had a team of about 55 IT professionals who had been working with- With the in-house IT team spending out the benefit of defined processes or basic disciplines. They were willing and most of its resources fighting fires, conscientious in terms of supporting our customers in the business. But most Spotlight looked to IBM Business of their time was spent fighting fires. Partner KAZ Group for assistance in addressing the IT shortcomings. KAZ Group, under Senior Solution Architect Vicki Redwood’s leadership, brought in a team of analysts to help us develop a strategy for building an IT infrastructure that could support our business and enable continued growth. The KAZ team took us back to square one — understanding our business processes. Page 42 of 60
  • 43. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 5 We call this effort the “process flow saga,” because it took three long months Highlights to arrive at accurate diagrams of what our systems did and what our process flows were (Figure 2). At the time, this process flow analysis seemed endless. From talking with other organizations, we now know that our experience was neither unique nor all that lengthy. But at the time, it felt like we were not Before Spotlight could transform making much overt progress. its IT operations, it needed to understand the business processes IT supports. PRODUCT MASTER PLU Ref. Data (warehouse lines) Eagle Warehouse Shipping Shipment Costs dept. IETL190 PRONTO Shipment Rece Raven Virtual Shipment Walka (NZ) Sub Dept Sales Purchases & Interstores Keyed Store Credit Claims Receipts (Whouse & Supplier) CREDIT terstore IETL251 CLAIMS ansfers Head Office ??? Eagle ??? IETL 250 IETL280 CREDIT CLAIMS ??? On Hand, rder Status Hornbill STOCK CREDIT RECEIPTS CLAIMS Claims Cockatoo Store claim approvals An end-to-end process mapping Store CLAIM REPORTING via SQL reporting helped the IT team see how applica- Adjustments Buyers Count IETL 350 STOCKTAKE tions and data related to the needs MASTER Client PC PD STAG of the business. PLU COUNTS BC Figure 2. Spotlight’s IT transformation began with a detailed mapping of the processes behind the retailer’s core business. Nevertheless, this represented a watershed for many on my team. Until we went through this exercise, they did not understand how, by tweaking this or adding that, they had all too effectively inhibited the use of what IT and applications we did have. Page 43 of 60
  • 44. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 6 Another eye-opener for us all was the process mapping. Spotlight is a retailer. Highlights We buy and we sell. Everything is about products and price. It should be simple, but in many cases it is not. So what we focused on was the end-to-end process for a sales transaction: How did we buy a product and receive it into stock? How did we move a product from stock to the store? How did we record the sale and capture the transaction data in our systems? Where did the sales data end up in the legacy systems? At the end of the “saga,” the IT team understood what the business was about. And once we understood how many different versions of the truth we had in circulation, we could begin to rationalize. Developing a roadmap for implementation Once we thoroughly understood our “as is” situation — from both a business process and a technology perspective — it was time to change. We needed a roadmap to new, replacement, systems while keeping the old systems going. At the same time, we were plagued with systems instability. Our legacy systems The next step was to identify were failing. In order to keep the business running, we just hoped we had the which legacy systems to retain time to make replacements before something irrevocably broke. and which to retire — and to develop a phased implementation We had to identify priorities — what we could live with for the long term, and plan that would support ongoing what needed addressing sooner. We also needed the control to selectively turn business operations. off some parts while leaving others on. That meant thinking about how we might run some elements in parallel, at least until the new parts were proven. For example, we decided early on that we had to replace our point-of-sale system immediately in one country. Yet this could not happen overnight; it had to occur gradually over some six months. We also decided to add enter- prise resource planning (ERP) capability, so we chose both a new point-of-sale system and SAP Retail for ERP. Page 44 of 60
  • 45. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 7 Integrating legacy and new systems with a services-based approach Highlights We decided, with KAZ’s encouragement, to break the old systems into what we now refer to as services, or small components. The advantage was that the business could understand what each part was doing and then could choose when to turn on (or off) selected business functionality. This also enabled us to combine parts (services) that previously could not Spotlight began to look at applica- have been combined, as well as introduce new services and functions that tions in terms of the business could work with old ones. For example, we could create a mixture of old point- functions they performed, which of-sale and new point-of-sale systems feeding old and new applications — all of were defined as services. which was automatically achieved by putting the service layer in between. Even with this phase completed, and with a rationalization of the middleware that connected everything, we still needed end-to-end control. Our architec- tural solution, suggested by KAZ, was to add a process service layer on top so Introducing a services layer that we would apply automated coordination and control from start to finish. enabled Spotlight to integrate business functions in new ways A further benefit of this was that we were then able to introduce a degree of and readily add new capabilities. parallel processing without having to change the old systems. The important aspect to remember, however, is that this process service layer could only work because we were breaking functions up into services and placing the service architecture at the center. Selecting the right tools for end-to-end process control The one missing component was a The next question we addressed was tool selection. As a dynamic retail way to control business processes business with continuous events, we could not afford any loss of business end-to-end. capability. We could not contemplate turning off the point-of-sale system for a week to install a new one, nor could we shut down the business for three weeks to introduce ERP. We needed to migrate slowly across different stores in different locations, from legacy to new, and perform this seamlessly so there would be no significant impact on the business. These were the most critical factors for us. Page 45 of 60
  • 46. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 8 With this in mind, Vicki’s team proposed IBM WebSphere® Process Server. Highlights The attraction was that it provides the basis for end-to-end control over at least five disparate systems. With one process control point, we could see and The company selected IBM manage everything, from goods going to the store through to sales being WebSphere Process Server recognized in the head office (Figure 3). to provide a single process control point over multiple disparate systems. The process control layer Figure 3. WebSphere Process Server provides a central point of control over business events while coordinates business events integrating the flow of business processes across multiple applications. across five applications, handling errors and generating alerts. WebSphere Process Server is now being used as our virtual process control. It coordinates business events across our five main applications as well as performing error handling and generating alerts. Now we can see what is hap- pening, which is good. Yet we also discovered we could see errors that we did not even know were occurring. Nevertheless, we now have consistent process flows and process monitoring across many asynchronous steps, which are being performed in a mix of old and new applications. Page 46 of 60
  • 47. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 9 This is a huge improvement. Before, we looked like a monolithic IT shop with Highlights the business having minimal control and no responsibility. Now the business has information and must take responsibility. It is a fundamental change that has been achieved by using services and process management. The business and IT work more closely together than ever before. Part of what has helped here is a set of common definitions that work for both business and IT (Figure 4). While it may seem a statement of the A common set of definitions — obvious, having a common understanding of what constitutes a sale or a developed during the business trend or a product is critical. Now, when business and IT people talk, we process analysis phase — helps know we are talking about the same thing. That has already proved to be ensure that business and IT speak an incredible winning situation for the business and for my developers, and the same language. we consider it to be a best practice for any services-based transformation. Figure 4. Business and IT agreed on a set of definitions that provides a common vocabulary for describing business functions. Page 47 of 60
  • 48. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 10 Where is Spotlight today? Highlights At the time of this writing, we have made incredible inroads into reshaping how Spotlight delivers and exploits IT. We are 20 months into our transfor- mation, and we are about one-third of the way through our plan. We have implemented WebSphere Process Server — it is live and running. We are in the final stages of testing SAP for Retail, and that will shortly be going live (Figure 5). A phased rollout of new POS systems to stores was implemented in parallel with bringing a new ERP www solution online. Figure 5. This diagram illustrates the progress of Spotlight’s IT transformation at the time of this writing. Page 48 of 60
  • 49. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 11 Already we are more than halfway through introducing the new point-of-sale Highlights systems. We have about 120 stores to do over a four-month period, at a rate of about 8–10 per week. Now that we have the installation process refined, these are going in smoothly. In the interim before SAP goes live, they are fed by the services at the front end of our legacy systems. Using the services-based approach, we are already combining product hierarchies across the new SAP system and the legacy systems. Similarly, we have started to create orders on the new ERP system regardless of whether they point to the new point-of-sale or old point-of-sale system. To us these are all enormous wins. The services-based approach The feedback from stores has been amazing. I received yet another e-mail enabled Spotlight to combine data recently saying how much a staff member likes the new system — not least across the new and old point-of- because it enables her to support her customers much better. Furthermore, the sale systems, legacy applications rollout has not impeded our catalog business and its related sales. and the new SAP system. Taking the transformation to the next level Next on our agenda is a retooling of our Web site. We have selected IBM WebSphere Commerce Server to be our new Web store. After that there are additional systems we will update, change or reuse (Figure 6). But thanks to the services approach and the way that WebSphere Process Server can be used, we have a flexibility of choice. This is highly attractive, especially now that we have mapped our processes and understand our data. Page 49 of 60
  • 50. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 12 Highlights Figure 6. Future plans call for implementing a new infrastructure for Web retailing and a portal-based intranet. We also plan to implement IBM WebSphere Portal as our new internal com- The next steps in Spotlight’s IT munications mechanism. With 6,000 employees, some of them short-term transformation will be to retool or even temporary contractors, effective communications and easy access to the Web site and implement an training materials are additional business imperatives. The portal will allow employee portal. us to do training locally, at the store level, while ensuring consistency by keeping documentation updated and available centrally. WebSphere Portal also offers us the option for expanding our marketing initiatives on the Web. With five million registered members in our loyalty program, we see tremendous potential in using WebSphere Portal to create a powerful social networking community with our customers. Page 50 of 60
  • 51. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 13 Lesson learned: bring in the right help at the right time Highlights The single most important lesson I have learned from what we went through is that you should never underestimate the size of the task. Spotlight needed help to achieve what we have done. We needed the KAZ team to come in and show us what was in front of us and to have that extra level of knowledge and The knowledge and resources experience that our IT team, however well motivated, simply lacked. provided by KAZ — plus that team’s objective point of view — If we had tried to do everything ourselves we would have been slower and were critical to the success of more error prone, as well as less imaginative. One does not always have the project. objective thinking when one is on the inside. For us this lesson learned is all about finding the best people to help understand the business together and then to achieve a gradual skills transfer. The result has been to change how IT supports the business. We now have a coherent IT operation and an expanded, more skilled IT team that aims to understand and fulfill the business requirements. We can now use services because everything we do is oriented around the business processes. From a CIO viewpoint, perhaps the biggest value has been that my IT depart- With the new skills they acquired, ment now understands our business processes. We are not “techies” anymore. Spotlight’s IT staff is now focused We are Business Process Retail Technicians. Furthermore, the obverse is true: on understanding and meeting the the business also understands the drivers and levers that affect IT. The busi- needs of the business. ness is both more realistic and imaginative, now that it understands the layers and the services as well as the complexity of what we have developed. Page 51 of 60
  • 52. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 14 The final analysis: it begins and ends with process management Highlights Looking back, I do not think we had even heard of the term “SOA” until comparatively recently. Rather, we adopted the approach that KAZ brought to us as a way of reaching our objectives. They convinced us that the process management approach would enable us to move from A to Z without signifi- cant negative effects on the business. There was never any discussion of SOA principles that I can recall. Instead, the focus was on what WebSphere Process Server would allow us to do — on the function and effect, not the architectural principles. I remember thinking that it all sounded really good, almost too good. Ours was a business- While the project did not begin driven decision. It was not a conceptually driven conclusion. with a formal decision to take advantage of SOA, it was That is not, however, to downplay SOA. We did not know we were delivering immediately evident that the according to SOA principles. We did not know that others had arrived at initiative would benefit greatly by the sorts of conclusions we had. Now I can see that we “did” SOA without adhering to SOA design principles. knowing about SOA— and this confirms to me just how effective SOA is and continues to be for the business. Page 52 of 60
  • 53. Australian retailer focuses on business processes as the entry point to service-oriented computing. Page 15 About IBM IBM is a global computer products and services company, with close to US$97 billion in sales, approximately 386,000 employees, and operations spanning more than 150 countries and including thousands of clients, Business Partners and suppliers. As one of the world’s largest IT companies, IBM strives to invent, develop and manufacture the industry’s most advanced information technologies, including computer systems, software, network- ing systems, storage devices and microelectronics. Its worldwide network of services professionals provides the extensive expertise clients need to create business value using IBM’s leading technological solutions. About KAZ KAZ Group, an IBM Premier Business Partner, is the largest Australian-owned IT services company, providing innovative and flexible IT solutions that help clients simplify, optimize and transform the way clients do business. As a separately managed subsidiary of Telstra, KAZ combines a 30-year heritage in IT with the networks and connectivity options of Australia’s leading telecom- munications and information services company. For more information To learn more about the many ways IBM can help you build and manage a Smart SOA™ solution for transforming business processes, please contact your IBM representative or IBM Business Partner. Or visit us at: ibm.com/soa To learn more about KAZ Group, an IBM Premier Business Partner, visit: kaz-group.com Page 53 of 60
  • 54. © Copyright IBM Corporation 2008 IBM Corporation Software Group Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America October-08 All Rights Reserved IBM, the IBM logo, ibm.com, Smart SOA and WebSphere are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol (® or ™), these symbols indicate U.S. registered or com- mon law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trade- marks in other countries. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/ legal/copytrade.shtml. Other company, product, or service names may be trademarks or service marks of others. This case study illustrates how one IBM customer uses IBM products. There is no guarantee of comparable results. References in this publication to IBM products or services do not imply that IBM intends to make them available in all countries in which IBM operates. WSC14063-USEN-00 Page 54 of 60
  • 55. Innovation that matters Yansha department store embraces supplier collaboration to streamline processes Overview ■ Business Challenge In order to maintain its market leadership position, Chinese retailer Yansha needed to increase its competitiveness against both local retailers and new foreign competitors in an increasingly deregulated Chinese retail industry. Yansha saw that the best way forward was to trans- form the way it does business with its supply chain partners ■ Key Benefits A rapidly changing retail landscape through the adoption of new busi- • Reduced order lead time from The retail industry in the vast ness processes, automation and 2.5 days to 4.5 hours Chinese marketplace is very differ- business intelligence. • Improved order acknowledgement ent from that in the West. Retailers ■ Solution rate from 80 to 99 percent have historically been highly region- Yansha deployed a first-of-its-kind • Reduced order error rate from nine alized, and the overall market has supply chain management (SCM) to one percent been largely closed to competition platform that leverages a service- • Achieved ROI in nine months from foreign companies. With the oriented architecture (SOA) to inte- rapid growth of the Chinese econ- grate enterprise resource planning omy and relaxation of regulations, (ERP) and SCM applications. The that is changing rapidly. Mergers platform enables Yansha and its and acquisitions are on the rise lead- suppliers to leverage new real-time ing to industry consolidation and performance information to provide expansion beyond regional boundar- transparency into supply chain ies, and Chinese retailers must now business processes and generate share the market with global compa- actionable business intelligence, nies as well. setting new standards of efficiency. Page 55 of 60
  • 56. Transforming the supply chain through real-time performance information This adds up to unprecedented competitive pressure for Yansha, one of China’s Business Benefits largest regional retailers. Yansha is an upscale brand with revenues in the • Increased supplier information billions of Yuan each year and 215,000 square feet of retail space at its Youyi service revenue by 50 percent Shopping City in Beijing. Catering to an upscale clientele, Yansha sells high- • Reduced order lead time from end, exclusive goods from brands such as Versace, Prada and Calvin Klein. 2.5 days to 4.5 hours, driving down inventory costs Yansha has long displayed industry leadership. Opened in 1992, Yansha • Improved order acknowledgement was the first retailer operating as a joint venture in China to introduce modern rate from 80 to 99 percent enterprise processes and computer systems aimed at improving managerial • Reduced order error rate from nine methodologies. In 2000, it implemented IBM Business Partner eFuture’s ONE to one percent POS-ERP suite, providing it new levels of internal efficiency. In 2003, the ERP • Achieved ROI in nine months suite was upgraded with SCM capabilities. • Enhanced operating and business process efficiencies, visibility, asset But Yansha was not realizing the full potential of its systems. With the rapid structure and both customer and supplier satisfaction pace of change in the retail landscape, Yansha knew that it had to do more if it was to maintain its leadership position. Faced with the prospect of having • Enabled the creation of a value-based supplier pricing model that uses new to compete with highly efficient foreign competitors, Yansha realized that it supplier performance metrics had to optimize its supply chain and improve efficiency among its 1,800-plus • Reduced operating risks due to local and international suppliers, and that leveraging technology was the way optimization of supplier relationship to do it. This quantum shift represented a radical departure for Yansha, which profitability and lower error rates like its local competitors, was still doing business manually for the most part, relying on paper-based processes and interaction via telephone and fax. Yansha faced two fundamental challenges in its effort to optimize its supply chain: first, to streamline and automate its business processes, and second, to find a way to get all of its suppliers to buy into a new, more efficient way of doing business. “ Exchanging our Transforming business processes for enhanced decision-making Despite its implementation of an enterprise suite, a number of obstacles – data and interacting continued reliance on manual processes, the siloed nature of many of its sys- closely will enable us tems and a lack of integration with supply chain partners – were hampering to respond to the Yansha’s ability to track and integrate information in real time and generate market appropriately.” actionable business intelligence from it. More than 30 key supply chain pro- – Mr. Ai Jie Ma, Director of Yansha cesses were handled manually. The result was low productivity, high error rates Technical and Information Department and inaccurate business data, all leading to reduced competitiveness. To transform its processes for more informed decision-making, Yansha worked with the IBM China Research Lab (CRL) and eFuture to develop Blue Engine, a process-driven SCM platform built specifically for the retailer. Blue Engine incorporates both automated business processes (such as purchase orders, shipping notification, invoicing, payment and return of goods) and new function- ality based on IBM WebSphere® Process Server and IBM DB2® middleware. Page 56 of 60 2
  • 57. By integrating information from existing systems with new automated Key Components processes through a service-oriented architecture, Blue Engine accomplishes several key objectives: Software • Automates the supply chain management-related key business processes among • IBM WebSphere Process Server people, across multiple existing applications and between Yansha and its suppliers • IBM DB2 database software • Improves visibility through real-time monitoring of business processes, generating Services key performance indicators (KPIs) – such as order acceptance rate and on-time • IBM China Research Lab delivery rate – that enhance decision-making capabilities • Provides suppliers with better online information services to make customer buying • IBM Global Business Services behavior, sales trend and process information transparent, enabling suppliers to IBM Business Partner adjust and optimize their operations to satisfy market demand. This increases supplier • eFuture willingness to pay for these fee-based services (thereby increasing revenue), while encouraging them to move away from manual interactions – thus improving overall supply chain efficiency Because of the need for the efficient integration of information, processes and systems across the enterprise and out into the supply chain, the adoption of SOA is a key part of Blue Engine. It provides the flexibility to quickly build new solutions (and change existing ones) based on immediate business need. SOA also enables greater interaction with suppliers through Web-based delivery of services, which fosters greater responsiveness. According to Mr. Ai Jie Ma, Director of Yansha Technical and Information Department, “This solution will help us build an information platform together with our suppliers in their internal information system. Exchanging our data and interacting closely will enable us to respond to the market appropriately.” With Blue Engine, many of Yansha’s paper-based manual processes have become a thing of the past. Workflow-related activities such as issuing purchase orders and checking inventory are pushed directly to appropriate users via Why it matters mobile short messages, browser-based workspace and e-mail – triggering alerts In the vast Chinese retail market, when activity processing is delayed, and significantly improving business deregulation has been driving increased process execution. Business users can also employ collaboration utilities such competition from regional players as as mobile short message services to find the right person to solve potential well as newly arrived international process issues, which helps streamline resources and avoid rework. companies. In order to maintain its leadership position in the marketplace, major Beijing retailer Yansha deployed The power of real-time information an SOA-based supply-chain manage- The Blue Engine project pioneered the first application of a process automation- ment solution – an industry-first in China – based workflow engine using IBM China Research Lab’s Web 2.0-based visual- that enabled the company to expand its capabilities and transform the way it ization and interactive business process monitoring technology for China’s retail does business with over 1,800 suppliers. industry. This visualization technology enables Yansha management to get an Thanks to streamlined, automated pro- accurate, real-time view of its supply chain, delivered through a “dashboard” that cesses and new business intelligence, displays continuously updated key performance indicators. This in turn provides Yansha has been able to increase its competitive edge over other retailers by a solid basis for business decision-making and process optimization. optimizing the efficiency and profitability of its entire supply chain. Page 57 of 60 3
  • 58. More importantly, real-time information enables Yansha to work more effectively and efficiently with its suppliers. The retailer now has the information it needs to accurately categorize its suppliers based on a number of factors including their profitability, monthly selling trends and level of activity. This has enabled Yansha to come up with a completely new, value-based supplier pricing model © Copyright IBM Corporation 2007 that gives preferential treatment to those vendors which are most valuable and IBM Corporation profitable for the company. In this way, suppliers are given an incentive to work Global Solutions, Industry Marketing efficiently: superior performance is rewarded with a better deal. 294 Route 100 Somers, NY 10589 U.S.A. The availability of new information provided by the solution has also enabled Produced in the United States of America Yansha to provide enhanced fee-based online information services to its 11-07 All Rights Reserved suppliers, which not only encourages them to adopt the new methods, but also IBM, the IBM logo, ibm.com, DB2 and WebSphere generates additional revenue for the retailer. are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. Competitive advantage, greater efficiency. . . and satisfied suppliers Other company, product, or service names may All 1,800 of Yansha’s suppliers actively use the supply chain management be trademarks or service marks of others. solution and supplier satisfaction has improved significantly. The improvements Many factors contributed to the results and in efficiency are dramatic: Order acknowledgement (a required verification benefits achieved by the IBM customer described in this document. IBM does not guarantee step in the supplier order/fulfillment process) is up from 80 to 99 percent, order comparable results. lead time has dropped from 2.5 days to only 4.5 hours and error rates are down References in this publication to IBM products from nine percent to only one percent. Risk and cost have both been reduced, or services do not imply that IBM intends to make them available in all countries in which and competitiveness is greatly improved. Even the revenue generated by online IBM operates. supplier information services has increased by 50 percent. “Our shopping mall now has a technical advantage,” notes Mr. Ma. “We have a leading role in securing prospective sites, enabling us to rebuild business processes and stay competitive. It is a classic case of information technology’s business value for corporations.” For more information To find out how better use of your information assets can help transform your business, please contact your IBM representative or IBM Business Partner. Visit us at: ibm.com/innovation ODC03019-USEN-00 Page 58 of 60
  • 59. Smart Work in Retail – Customer Stories
  • 60. © Copyright IBM Corporation 2010 IBM Corporation Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America January 2010 All Rights Reserved IBM, the IBM logo, ibm.com, Smarter Planet, the planet icon, DB2, Lotus, Rational, Tivoli and WebSphere are trademarks of International Business Machines Corporation in the United States, other countries or both. Other company, product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at ibm.com/legal/copytrade.shtml References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates. These customer stories are each based on information provided by the client and illustrate how one organization uses IBM products. Many factors may have contributed to the results and benefits described; IBM does not guarantee comparable results elsewhere. SWM14010-USEN-00