Economy of scale and one System strategy
One company. This means that we are looking for (1) consistency and (2) co-operation between business units.
With regard to consistency: the divisions are homogenous with regard to their activities. It therefore only seems logical that as a business we should harmonize our business processes. It is rather complicated to harmonize business processes if local IT systems are dictating different ways of working.Co-operation
Co-operation means integration. We are looking for integration on three levels: Financial, Managerial and Operational. Indeed Financial integration alone can be achieved by using the basic financial model only. Managerial integration means transparency (also regarding accounting) and requires immediate access to detailed information with standardized access for all users. This can of course be achieved by building a corporate datawarehouse, but this would be very, very costly. Finally, we have several cross-unit business processes. Operational integration requires real-time information regarding those cross-unit business processes and requires robust solutions. Both needs are best served by using one ERP-platform rather than integrating several different operational systems.
All in all, this is very compelling case to rely on one corporate solution rather than on several local applications that we try to link to work together.
* This is a much a cultural issue as it is a systems issue.
Looking at concrete functional goals will also give you an idea of the sort of solution and the kind of information we are looking for.
Some important long-term Logistics goals
- Control the worldwide flow of goods from ex-works to in-store against benchmarked costs and quality
- Co-ordinate the world-wide flow of goods between purchasing, production, logistics and sales world-wide
- Ensure delivery performance from the customer’s perspective (including decentralised accurate real-time expected in-store date information available for customer service and customers on style level)
- Plan and control to:
- advise management appropriately on the expected and realised quality and costs of the logistics in the Company;
- ensure and demonstrate that all logistical partners perform according to agreed upon tariffs and quality;
- eliminate shrinkage;
Direction for thinking: The IT infrastructure should allow (theoretically) the Company to remotely / centrally operate some of the support functions in the subsidiary: accounting, merchandising, logistics and ICT. This can be achieved if we operate from one platform / rely on one corporate solution. On the other hand we should allow divisions to implement functional applications that should boost competitive advantage, when they demonstrate (proof irrefutable) it against the corporate-level vendor’s solutions. In other words, maximum use of an ERP unless a local solution can give a significant competitive advantage which means more than just a superior ICT solution and always takes the best interest of the Company as a whole into account. This could go as far as a one corporate solution for POS.