A Proposed Strategic Information System For A Retail Chain

Contents

Topic Pg

Introduction 3

Executive Summary 4

The Company and its Current Situation 7

The proposed Strategic information system 9

System objectives

Justification for the system

Benefits

System description

Implementation 16

General approach

Timescale

Potential risks

Conclusion 20

Introduction

In this project, we hope to clearly convey the current situation of the company ALTS, the changes it wishes to implement and the factors that need to be updated and introduced to make its transition a successful one. ALTS is in the retail market area which is ever changing, and keeping up with current trends is essential in order for ALTS to survive. ALTS proposes to introduce a new Information Technology (IT) system to help it stay on par with its competitors. Competition in the retail area is forcing retailers to be more service and customer focused. Customers are the most significant factor in the retail industry. IT systems that help improve customer service are an essential part for any true retail competitor. A Point of Sale information system, for retailers today, is crucial in assembling and using information effectively in competitive markets. A correctly implemented and efficient system has the potential to reduce company costs, respond to trends faster and improve customer service. It can also improve the retailer's marketing strategy.

We will illustrate each phase needed to ensure this information system execution is a successful one. The initiation phase will be dealt with by first clarifying the reasons for the need to implement such an IT system, then dealing with the development phase, conveying the resources needed to do this, and onto the implementation which will include tailoring the system to ensure it fits this company's needs. Finally, the continuous operation and maintenance of the system once it is fitted will be dealt with. A project like this is never fully over as there always needs to be continuous maintenance and operation works for the upkeep of the IT system. It is an ongoing process for any IT system.

Executive Summary

ALTS is a clothing retail organisation at present looking to expand its chain to add more stores nationwide. This expansion will need to be met with a more efficient customer service plan achieved through effective IT systems implementation.

By focusing on a cohesive technology plan, ALTS retail organisation will benefit from purchasing and operational efficiencies, leading to improvements in the customer experience. Implementing innovative applications and tools to analyze customer buying trends, multidimensional analysis, and pricing and promotion, is imperative to increase customer purchases and retention. The customer focus is essential to ALTS's success.

ALTS bases its best practices upon providing value to the customer and retaining customer loyalty. Shoppers in the target market segment expect a seamless shopping experience. They want to browse products comfortably and experience complete satisfaction when purchasing. They want consistent prices, promotions, and return policies across all stores. According to ARM Research's Retail Insider: IT Spending Profile, 2003, 2004:

"It's well known that customers have little tolerance for out-of-stocks and slow checkout. Given what little loyalty most shoppers have today, one bad experience sends that customer and their wallet to a store across the street."

Providing this level of customer service will rely upon effective customer management. ALTS seeks to achieve this service and become the leader in customer management for its markets.

The plan intends to introduce to the organisation the ability to identify customer buying patterns through the use of data warehousing and data mining techniques. A Point Of Sales system (POS) passing customer and purchasing information will be linked from the stores back to a centralised data warehouse. An OLAP data analysis tool will be employed to analyses the information. Some of this customer information will be made available back at the POS station, used in conjunction with a designed customer loyalty card. An intranet and extranet will also be introduced to facilitate communications between stores in the chain and also between stores and suppliers.

Objectives of the Plan

ALTS's objectives for the implementation are:

* To centralise inventory control and provide outlets with real-time information on stock levels;

* To improve stock replenishment and reduce the amount of stock currently warehoused;

* To monitor trends in spending, popular products, consumer trends, etc.;

* To enable analysis and forecasting;

* To aid communication between stores, and with suppliers;

* To improve accounting efficiency.

Implementation Issues

The implementation will be outsourced and integrated with an Intranet and Extranet, developed in-house. Implementation issues will be resolved between the retailer organisation and outsourcer while the system works in parallel with the old system. In this time, training, live-testing and monitoring will occur and, when staff are fully trained and reliability is assured, the system will replace the old system.

Mission

As the Irish economy grows in prosperity, more disposable income becomes available,