ICT and e-Business Impact in the Retail Industry - empirica

e-Business in the Retail SectorBrookland is investing approximately €5 million between 2007 and 2010 for theimplementation of the Aldata G.O.L.D. modules, including licenses, applicationdevelopment, functional design and system integration. The maintenance fee of thesystem is approximately €200,000 per year.Business process reengineering was not needed throughout the implementation due tothe fact that Brookland insisted on selecting a software application that was fully matchingits business processes. As a result, some adaptation and custom development activitywas required from the software vendor to solve all the identified functionality gaps, basedon a detailed blueprint of warehouse processes performed in a joint project by Brooklandand IBM Global Business Services.5.3.3 ImpactBrookland did not go through a detailed Return On Investment (ROI) analysis to measurethe financial impact of the SCM implementation. However, a cost-benefit evaluationproject was conducted with the following metrics:Intangible benefits: included in this category were benefits resulting from consolidationof business processes and organisational changes. Due to their nature, intangiblebenefits are difficult to quantify, but contributed to the attainment of productivityenhancements. With the close integration of G.O.L.D. Central and G.O.L.D. Stock, forexample, it is now possible to exchange data such DESADV messages from suppliers tospeed up the reception process while also achieving improvements in quality. Anotherexample for intangible benefits originating from the standard G.O.L.D. Central solution isthat different variances of articles can be set which in turn enables Brookland to bettermaster articles and article variants.Tangible benefits: Brookland expected measurable benefits to occur due to the adoptionof the SCM solution. Stock levels for example, were set to decrease as a result.Furthermore, Brookland expected to better benefit from discounts that suppliers applyregarding logistic conditions. Being able to operate as a true logistic service provider thatmeets organisational demands without having to invest in costly modifications in thecurrent propriety systems was another tangible benefit expected..While the aforementioned tangible and intangible benefits were identified in the costbenefitevaluation project, the key benefits obtained by Brookland and indirectly by Dirkvan den Broek from the SCM solution include the following:Higher efficiencies of the replenishment process. Less human intervention isrequired to fulfil the replenishment process due to the process automation andconsolidation enabled by the implemented software solution. As a result, accuracygains were achieved. The integration with the central back-end system and theconsolidation of the master data management infrastructure were two additionalenablers of optimised replenishments. For example, logistics delivery processautomation includes the use of EDI (Electronic Data Interchange) messages fromthe ERP to the warehouse management system to notify delivery receipts. Inaddition, Brookland also developed new capabilities that are enabling the companyto timely respond to fragmented store orders, for example the company is now ableto execute order picking at SKU-level in one warehouse.Reduced out of stock as a result of optimised warehouse replenishment efficienciesand automated management of the entire set of articles' attributes. Before the141