The document discusses the alignment of IT architecture with business goals in a retail context, specifically focusing on a fashion department store's revenue generation through online channels and the implementation of digital technologies. It highlights the importance of a formalized business model that connects KPIs with operational parameters and emphasizes the need for an integrated information system to monitor and optimize performance. Key conclusions suggest that effective management of expenditures and technology can enhance ROI and competitiveness in the retail sector.

1. Consistency of
IT-architecture & business goals
in retail company
Sergey Gumerov

2. Initial problems
Launch of fashion department store operations in 1 year
75% revenue generate on-line channel
75% CAPEX to the old building reconstruction
Competitiveness bases on Digital Fashion
“ERP” implementation
Thisisnot
technology.Really
?
Business
Expectation from IT
Huge gap

3. Management system
Constraints
Main architecture question
Why?
Retail
business
ROI
Maximization
Products
Channels
Consumers
Business
modelModel-oriented
management

4. IT-architecture services
Fashion retail technology
Business
model
Retail
business
Monitoring &
Analysis
Planning &
optimization
Trade operation
enabling

5. Information model
Cascade development
of Management system
Math.model
Retail “channel”
parameters
Goal
KPI
Classes & Instances
Catalogues
Products
Suppliers Consumers
Processes & projects
Software system
Trade & Stock
LeadsOrders
Information technology equipment & networks
Planning &
Optimization
Trade & Stock
operations
Monitoring &
Analysis
Main retail processes & enabling processes

6. Business model formalization
KPI
model
Function-structure model Procceses
Product
matrix
Supply-Sale
channels
Consumer
segmentation
Technology program generates
Fashion retail technology
Structure of technology program
Technology development & implementation
Architecturemanagement
Programmanagement
Information model & catalouges
Software system
Products Channels Consumers
MDM 1C Magento SugarCRM Cognos

7. Product
characteristic
Consumer
Characteristic
Fashion-retail technology services
ROI Maximization
Fashion retail technology
Consumer pick-up
Catalogue Store “Look”
Product pick-up
Buying Sales Lead
Channel pick-up
Loses minimisation

8. IT-architecture services
Information management
Referenced catalogues:
Products, Channels,
Consumers, Counterparties
References models:
KPI-model (finance), Information
model & algorithms
(technology), processes
Facts & documents warehouses
Transactional systems
Visual
merchandising
Trade & Stock operations
E-commerce
& CRM
Analytical systems
Planning &
budgeting
Modeling
Analytics &
reporting
GUI, API to
suppliers
GUI, API to
consumers

9. Financial model
Varia
bles
Description
(for each channel)
S (t) Sales
X (t) Expenditures
U (t) Expenditures speed
C (t) Cost of goods
v (t) Cost of sales
w (t) Fixed costs
m (t) Margin
k (t) Expenditure to cost of goods
ratio
γ (t) Sales to EX ratio
K (t) Efficiency ratio
E = S - UU
C
v
w
m k γ
KУлучшение
Канал N
Assortment
Other
dimensions
Consumer
segment
Channel N
Channel
Location

10. Optimal turnover level calculation
Expenditures – main management function
Best distribution U*
for ХХХ-retailer is
Ustore = 0.62 U,
Uecomm = 0.38 U
Conclusion 1:
Optimal level of EX per
channel
2U0 < Uoptimal < 4U0
Conclusion 2:
Expenditures could be
re-distributed by
optimal level
Whole business

11. Var Description
A Turnover assets
q Income part coming back to turnover assets
1-q Income part to dividends
ω Turnover speed
μa (ϒ-1)ω
P Initial capex
ι Income tax
μp Capital cost
Optimal expenditure management
for goal ROI targeting
S -
U
A
P
t0 t0+Δt
q(S-U)
E
ΔP
ιE
ΔA
Channel

12. Example of business plan benchmark
& business monitoring
Store
OnLineWhole store

13. IT system
Operational numbers
Some conclusions
• Aligning business & IT enables by formalized business model, which
connects goal KPIs with internal & external business condition
parameters through functional-structure decomposition
– system modeling as a core of IT & enterprise architecture
• Business model is the basis for
– Development, adjustment of integrated plans & its execution monitoring;
– Integrated information system, which accumulate operational & condition
parameters to adjust plans to achieve target KPIs.
Plan numbersGoal KPIs
Functional-structure business model