Retailers struggle to find supply chain software that fits uniquely

Retail-sector CIOs report they still face challenges finding packaged software to meet their needs, particularly in the supply chain areas.

Retailers face such unique business issues that they have often been forced to write their own software or heavily customize packaged applications. Several retail CIOs claim commercial offerings are improving, but it’s still hard to find adequate supply chain software.

Jerry Miller, CIO at Sears, Roebuck and Co., said most of the Hoffman Estates, Ill.-based retailer’s supply chain systems are homegrown because packaged applications haven’t been able to scale to handle the high transaction volume and massive inventory Sears has.

“There has been some progress in this area by some vendors,” Miller said, noting that Sears is starting to evaluate packaged applications. “If it can be shown that we can install, run and support a packaged [product] less expensively than homegrown, we have no problem bringing it in.”

But right now, Sears finds itself turning to in-house IT staffers to design systems to scale and integrate its applications, Miller said.

Some retailers have found themselves modifying packaged applications so heavily that that they have essentially rewritten them. Several retail CIOs said they’re trying to avoid heavy customization. Wolly Morin, CIO at New York-based Ann Taylor Retail Inc., said modifying packaged software can open the door to lots of problems.

Bill Finefield, CIO at Virginia Beach, Va.-based Navy Exchange Service Command (Nexcom), which handles US$2 billion in sales across 112 stores and about 500 selling locations, learned about the dangers of customization the hard way. In 1993, prior to Finefield’s arrival, Nexcom decided to replace obsolete, decentralized homegrown systems with packaged merchandising, planning, distribution, human resources and financial systems.

Some of that software was so heavily customized that Nexcom had to do extra work to make it Y2k-compliant, rather than being able to rely on the vendors’ fixes. “We were guilty of doing heavy customization, and we have now learned our lesson,” Finefield said.

Nexcom now plans to replace two of its five-year-old applications with a major new merchandise package from Minneapolis-based Retek Inc.

Finefield said that this time, Nexcom will “go with as pure a product from the vendor” as possible to speed deployment and simplify maintenance.