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February 16, 2004
Its Joe Albertson's Supermarket, But the IT Department is Mine
Baseline has a feature
on Albertson's this month. I have to
admit that Albertson's is one of the companies I've always wanted to work
for. There's a few reasons: (a) I grew up in Idaho and wouldn't
mind a chance to have a challenging job in Boise and (b) I grew up
in the grocery business--my Dad owned a grocery store for years and
I spent a lot of my time there. The article talks about Albertson's
technology challenges and its fight for market share with
Wal-Mart.
Most retailers pull in sales data from their "point-of-sale system"--once known as cash registers--at the end of the day or twice a day. Wal-Mart pulls in sales from its electronic registers every 15 minutes. By 4 a.m. each morning, suppliers can see how their products sold the day before in every Wal-Mart store around the globe. According to Buzek, some suppliers are also allowed to see what other products were purchased by the consumer along with their own. The system is anchored by a Teradata warehouse that stores 200 trillion numbers and letters--the largest digital library of any company in the world. As a result, Wal-Mart has been able to continually lower prices in the grocery aisles while maintaining a consistent profit margin. It's a recipe that could spell disaster for Albertson's.From Albertson's: A Shot at the Crown
Referenced Mon Feb 16 2004 21:56:33 GMT-0700
But Albertson's is taking a different tack, trying to get to know customers better (i.e. establish digital identities and tag purchases) in an effort to provide better service.
Albertson's has to get to know its individual customers better through its loyalty-card program and to offer products they might not be able to find on Wal-Mart's shelves. Wal-Mart does an outstanding job of marketing to the masses, McGarvie says, but it doesn't even attempt to get to know its customers on an individual basis.From Albertson's: A Shot at the Crown
Referenced Mon Feb 16 2004 21:58:54 GMT-0700
But all that takes time and meanwhile Wal-Mart is chipping away at Albertson's market share.
Over the past year, Dunst says, the company installed a redundant high-speed network throughout its operations, using a combination of frame-relay and small-aperture satellite-communication technologies. As a result, sales data is ready for analysis "by the time the customer gets to their car in the parking lot," he says. Before the upgrade, sales information was processed in batches overnight. It could take up to 48 hours for managers in Boise to see if sales promotions were working.From Albertson's: A Shot at the Crown
Referenced Mon Feb 16 2004 22:00:25 GMT-0700
But that's not far enough. Wal-Mart uses sales at the till to automatically place orders with suppliers. Albertson's not there yet. There's all sorts of "store of the future" ideas as well, including a private and proprietary system like the one Marc Smith talked about at ETCON.
In the end though, one wonders whether all the "gee-whiz" stuff will create an experience that will cause people to be willing to pay a bit more. I like shopping at Alberton's and I go there even when I know I'm probably paying more than I would down the street--I'm not particularly price conscious. However, the success of Wal-Mart proves that the same can't be said of many people.
10:16 PM | Recommend This | Print This
Commerce One Conductor Takes on Integration
Business processes typically cut across system boundaries and require the interoperability and choreography of multiple systems. Yet, most enterprise-level support systems focus instead on one task without thinking about working with other systems. Web services promise to solve the problems of integrating these enterprise systems and most vendors already support basic Web services protocols -- but the real problem is that tricky integration process. There are basically three choices to integrate systems with Web services: (1) write a custom application in Java or some other programming language that interfaces with enterprise systems and creates the integrated functionality; (2) buy message buses, integration brokers, business process modeling tools, and other middleware and configure them to provide the functionality; or (3) buy an all-in-one integration suite such as Conductor from Commerce One.
From InfoWorld: Commerce One Conductor takes on integration: February 13, 2004
Referenced Sat Feb 14 2004 17:42:38 GMT-0700
What business really wants from IT is automation of the processes that make the business go. For example in most businesses, the most important thing that happens is the transformation of an order into cash. Just how this is done in a given business is called the order-to-cash process. But in spite of its importance, the order-to-cash process and other crucial business processes get only spotty support from IT. Ironically, its the very ERP and CRM systems that CIO's installed in the 90's that require so much integration now. We often think of "legacy" systems as being ancient mainframe applications, but often its newer systems as well.
Be sure to check out the How I Tested sidebar on this one since there's actually some meat there about the extended example CommerceOne provides. In summary, it needs quite a bit of work.
One interesting conversation I had about this product occurred while it was in editing. In respect to this passage:
Also, an important caveat to keep in mind: Tools like Conductor are not simple to use. This is not a slam on Conductor -- it's simply a recognition that automating business processes by integrating multiple legacy systems is a complex process.From InfoWorld: Commerce One Conductor takes on integration: February 13, 2004
Referenced Mon Feb 16 2004 11:17:29 GMT-0700
She asked: "If this is so complex, why would people want to use it?" That's a fair question for a word processing program, I suppose, but when it comes to enterprise-class software, its usually very complex stuff. The analogy I used was flying a plane. Flying a plane isn't easy but planes enable us to travel halfway around the globe in a day instead of weeks, so we put up with the complexity.
That said, enterprise-class software could be improved a great deal in its usability. We've sacrificed simplicity for interoperability and now we're going to have to fight our way back.