The need and relevance of technology in retail operations is a no-brainer, but the success of technology implementations depends on two very important factors, viz. Which technology partner you choose and How do they go about managing change. Storai presents a case study on how the right technology intervention can streamline retail processes and create business intelligence.
Modern Retail Solution Streamlines Operations, Drives Significant Savings
The standalone, distributed solutions made operations challenging and ambiguous at SSIPL, a specialty retailer with over 400 exclusive outlets. It did not provide real time information, consolidated reports or business controls. To overcome these issues, it deployed Microsoft Dynamics for Retail. The solution integrates business functions, and all sales channels, including stores, e-commerce and m-commerce, saving costs and resources by 30 percent.
Established in 1994, SSIPL Retail is a leading specialty retailer. Its portfolio includes 400+ retail outlets of premium international sports and lifestyle brands such as Nike, Levis, Lotto, United Color of Benetton (UCB). It also markets shoes under its own brand, Sierra and retail chains – Shoe Tree, Value Station and MMOJAH. Headquartered in New Delhi, the company owns five state-of-the-art manufacturing facilities with an annual capacity of three million pairs of shoes. It employs over 6,500 professionals in design, manufacturing and retail. Its annual revenue in 2012-13 was INR 7 billion (U.S.$130 million).
IT Issues and Challenges
The IT environment at SSIPL was old and the technology outdated. Multiple standalone applications had several limitations with some vendors no longer supporting legacy applications. The company was unable to take advantage of the improvements in technology, which lowered the efficiency of people and processes. Rakesh Kalra, Head IT, SSIPL, states, “To maintain standalone systems such as customer relationship management (CRM), loyalty program and business intelligence (BI), we were spending upwards of INR 50 lakhs (U.S.$ 100,000) per annum.”
Lack of integration meant MIS and dashboards on business critical information such as goods-in-transit (GIT) and inventory were not available in real time. Data was pulled manually from each store to create reports. “We could not identify sales patterns or plan end-of-season sales and discounts based on purchase patterns and the stock-in-hand,” recalls Anil Jain, Senior Manager-ERP, SSIPL. “More importantly, there was a lack of control on the legacy applications, which could easily lead to data manipulation and shrinkage.”
The company also wanted to expand its presence with e-commerce and m-commerce capabilities. However, the existing applications did not support, nor interface with e-commerce or m-commerce platforms. In addition, bring-your-own-device (BYOD) was fast becoming a reality, and the company wanted to find a secure and efficient technology to harness its potential.
Exploring ERP Solutions
SSIPL decided to go for a technology refresh to meet growth and effectively compete in the market. Rakesh started looking for an integrated solution that would become the backbone of the organization. He evaluated several solutions, including Oracle, SAP and Dynamics for Retail. He explains, “Dynamics for Retail has extensive features at far more competitive pricing than SAP and Oracle. It is an end-to-end solution for retail, capable of integrating store operations with the head office and manufacturing, using a multi-layer architecture.”
Implementing Dynamics for Retail
SSIPL partnered with Microsoft Certified Partner, Acxiom Consulting, because of its experience in the retail segment. It started deploying an earlier version of the solution, Dynamics AX 2009 in June 2012. Meanwhile, Microsoft released Dynamics for Retail with Indian localization for Indian taxation to ensure compliances. SSIPL decided to deploy the upgraded solution, which went live in April 2013. Fixed Asset Register (FAR), Financial Accounting, Retail and Business Intelligence modules went live in the first phase. SSIPL moved 250 stores to the new solution. The stabilization process took another three months.
Several custom features make the solution ideal for SSIPL. “We set up filters, so that, mono-stores only view the products sold at that store. For example, the Nike stores only show the inventory on sale at each store, and filter out other brands such as UCB, Lotto or Levis, for quicker access,” comments Vinod KV, Manager ─ Point of Sales Operations, SSIPL.
Data is synchronized every 30 minutes, guaranteeing consistent data availability across all departments. Says Maninder Singh, Manager ─ Data Center, SSIPL, “With centralized servers and auto synchronization at the end of the day, we have far better control over inventory mismatches. Store audits, inventory management, purchases and transfers are also easier to manage.” Today, more than 300 users from management, retail, sales, accounts, finance, warehouse, inventory, merchandising and purchase are using the solution.
“In the next phase, SSIPL will integrate planning, budgeting, CRM, m-commerce and HRMS modules. SSIPL also plans to migrate all the remaining 150+ stores and manufacturing units on to the new solution by April 2014, adding another 300+ users.
Microsoft Dynamics for Retail handles more than one million transactions per day ranging from purchase orders, sales orders, to invoices and transfer-in/out for all 250 stores. “Dynamics for Retail integrates all store front processes with the head office and manufacturing functions. It delivers a 360-degree view of the organization with centralized control and near real-time data,” explains Atul Madan, Head-Retail Operations, SSIPL.
Enables Quicker Decisions with 360-Degree View – Decision makers now have role-specific dashboards, tools and information they need to analyze. Atul explains further, “Microsoft Dynamics for Retail integrates and controls all aspects of our business. This helps us identify patterns and take business decisions to improve sales and profitability.”
All previous standalone applications or outsourced programs, such as loyalty, gift cards, CRM, employee discount, business intelligence (BI), e-commerce portal are available in Dynamics for Retail, making it a truly omni-channel solution. It captures point-of-sales (POS) transactions directly, automates processes that keep track of inward inventory vis-à-vis ordering, removes manual billing from POS, and gives accurate inventory at POS right up to the size level,” says Atul. “Seamless flow of data from one business process to another, delivers real time business intelligence dashboards to the management.”
Saves Costs, Resources by 30 Percent – Approximately INR 50 lakhs (U.S.$100,000) per year was spent on third-party solutions and vendors to manage loyalty program, BI and CRM,” adds Rakesh. “We have not only reduced the number of vendors but also protect our data by not sharing with outsourced agencies.”
Drives Efficiency Right to the Store Level – “Dynamics for Retail has revolutionized the way we work,” states Tarsem Singh, Regional Manager, SSIPL. All data from the store, warehouse and goods in transit is available at the head office. The management has access to any information that they may need from store specific data to aggregated information; tracking of goods in transit in real time; inventory, profit and loss analysis etc. Tarsem Singh continues, “It helps to identify profitable stores, fast or slow moving items. SSIPL can further tailor online schemes, store-level discounts to maximize business impact, sales and profitability.”
Saves 4 Person days a Month at Each Store – “Prior to Dynamics for Retail, end of day activities were manual and took 20 minutes of the supervisor’s time at each store,” comments Rakesh. The centralized and integrated solution eliminates the manual processes. “Microsoft Dynamics for Retail redefines data management at all 400+ stores, bringing efficiency by saving approximately 4 person-days per month across every store.”
“Dynamics for Retail has created an infrastructure at SSIPL to support future growth,” concludes Rakesh. “The centrally maintained data and automated processes save time and costs by 30 percent. Moreover, we have customized it to fit our exact business needs.”
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