Retailers Resume Investing in Technology to Target Supply Chain Efficiency Using Customer ERP Data Analysis

With tech spending finally on the rise again, business needs that may have been pushed aside due to cost cutting initiatives are finally starting to be addressed again. This, of course, means that companies, especially large enterprises and the Fortune 1000, will be investing in solutions that may not be crucial for the day-to-day functioning of the business, but that may increase profitability or ease a (less crucial) business pain.

Wholesale retailer BJ’s has formulated an entire technology revamp project that they call IT Roadmap, which is expected to cost them $20-30 million per year until 2013. The project is meant to pull the company out of the economic depression by capitalizing on opportunities for improvement and updates in their systems and processes, especially ones that may have fallen by the wayside over the last few years. These improvements include their sales reporting, financial and membership systems.

As the economy stabilizes, the BJ’s knows it needs to capitalize on their customers’ imminent increase in spending by catering to them in the most efficient way possible. BJ’s plans to complete their HR system upgrade, pilot new store registers and launch a new e-commerce website in 2010. BJ’s expects these investments will cost approximately $68 million.

As part of the their focus on customer data, BJ’s is taking a close look at product and data management and will also be pursuing a master data management (MDM) initiative. They are looking to link customer “membership” data to their product data so that any patterns or inconsistencies can be analyzed (through an ERP system) and then use this information to optimize their supply chain, product offerings, and e-commerce/point-of-sale systems according to what their customers’ behaviors are.

There are two separate components to the initiative, according former CIO John Polizzi: a business and a tactical project. “We chose the membership and product data management system as the first two areas where we are going to look to externalize our master data from any application. Then, as we choose an ERP system, that will be the data source that feeds the ERP data.” BJ’s is currently in the process of selecting an ERP system, which is to be planned for implementation by 2012.

Clearly, BJ’s and other retailers are finally ready to spend again. They realize that in order to stay competitive, they must spend now. If your organization is already established in the retail vertical, now is the time to refocus your efforts on finding the business needs within these accounts and then aligning you product to become the solution. If you are looking to expand your target industries, retail is a ripe opportunity as consumers are beginning to spend again and retailers, more than ever, need to cater to their customers’ needs.

For more current technology initiatives and free technology sales leads in the Fortune 1000 and Global 500, check out our Technology Business Drivers document.

- Carolyn Sebasky
carolyn . sebasky@salesquest.com
978.749.9999 ext. 107