When Fortune Smiles

“The biggest dilemma for us is that most of the systems out there now are not tried and true any more. All you can do is place your trust in a vendor that’s been around and that has built applications that have worked in the past” Darlene Goren

“Roots no longer has to confirm line by line. They’re getting it there faster, confirming it at the store level faster, and getting it on the floor more quickly, giving them a better opportunity to sell the merchandise at full price” Christopher Fang

Part of this efficiency will come from changing internal processes. Roots is a very big believer in looking at its processes and procedures, and making them better

When the world’s best amateur athletes paraded by during the opening ceremonies of this year’s Winter Olympics in Nagano, Japan, the undoubted gold medal winner in the clothing competition was the Canadian team, strikingly outfitted by Roots Canada.

Due to that Olympian performance, Roots literally became an overnight sensation, with demand for its products pouring in from around the globe. Things haven’t changed much since for the Toronto-based firm, which began life as a counterculture shoe store in 1973. Aggressively pursuing opportunities in such far-flung places as the Pacific Rim, the UK and Greece, Roots now has over 130 stores worldwide selling everything from branded sportswear, to leather goods, to infants’ and children’s clothes. In fact only last month, in a departure from its traditional operations, Roots opened its first home store, offering products such as bedding, furniture and dishes designed in keeping with the company’s stylish but casual ‘lifestyle’ image.

With the rapid growth Roots is experiencing, it’s not surprising that the company has had its hands full in keeping up with both the manufacturing and retail sides of its business. Just ask Darlene Goren, Director of Corporate Operations & Technology. She’s the one responsible for putting the technology in place to keep operations running smoothly and facilitate more efficient business processes.

Goren cut here teeth in retail IT with the likes of Dylex (Braemar, Tip Top Tailors, Fairweather) and ETAC Group (Ports International, Breton’s, Alfred Sung). She’s worked with so many retail divisions running different vendors’ applications that she is intimately familiar with most of the retail packages on the market, experience which proved quite useful when she joined Roots a year and a half ago

At the time, Roots was so lagging in its IT capabilities that a lot of things were still being done manually. It’s retail systems weren’t capable of meeting the needs of the fast-growing firm and there were many problems supporting store operations. In fact the processing capability of the store legacy system was so poor that things weren’t back up and running on Monday mornings. On the manufacturing side, the company was hamstrung by IT systems that were functionally inadequate and lacking in their ability to communicate with the company’s retail and financial systems.


“We sat down and looked at our technology and where we wanted to go as a company,” recalls Goren. “We also looked at the different businesses we had, because we’re not only retailers, we’re also manufacturers, wholesalers, and we licence product as well.”

Of high priority was the need to do a better job of managing the company’s supply chain. Roots manufactures about 80 percent of its products, mostly in Canada, but it still has the same supply-chain challenges faced by traditional retailers. Lead times must be properly managed, for example, and plant manufacturing systems still have to communicate information to head-office systems.

To get its IT operations back on track, management decided that a major systems overhaul was needed, one that would not only provide substantial new functionality but also more seamlessly tie together the retail and manufacturing sides of the business. The company opted to move from legacy systems running on an IBM AS400 to a combination of integrated applications running in a client-server environment.

Goren now put her experience to work. “There are about ten vendors of retail systems that are in this league,” she said. “When you’ve been around for a long time you know who they are and what their capabilities are, so you can create a short-list right at the outset, based on your needs and your budget. We started with about six vendors and narrowed it to four that we did an in-depth analysis with.”


Several vendors were eliminated because they hadn’t rewritten their entire package for the client-server environment. In the end, readiness proved to be a key factor, along with technology and functionality.

Readiness, however, is a relative term when it comes to the kind of technology Roots was shopping for. A few years ago it would simply have been a matter of buying a legacy system that hundreds of other companies were up and live on, and which had most of the major bugs worked out of it. But today’s client-server technology is new to everybody, including the vendors who are selling it.

“The biggest dilemma for us,” admits Goren, “is that most of the systems out there now are not tried and true any more. All you can do is place your trust in a vendor that’s been around and that has built applications that have worked in the past.”

Even with a trusted vendor, however, it’s important that their staff have implementation experience – that you’re not a guinea pig. But Goren concedes, “Unfortunately that’s something that you have to deal with at this point in time because vendors often don’t have a lot of installs on the current version you’re going up with, so you have no choice but to learn with them.”

Complicating the problem is the scarceness of qualified staff. Again, because the technology is new, it’s simply not easy to find experienced people. This applies to both contract project staff and long-term maintenance and support staff. Add this to the learning curves that current staff must face in mastering the new technology, and the human resources side poses a substantial hurdle.


Notwithstanding these challenges, Roots moved forward with its migration plans, deciding first to transform the retail side of its business. The company selected a Windows NT-based point of sale (POS) system for its stores called Store 21 from DataVantage. In addition to providing the whole back-office function that a store needs, Store 21 has a variety of modules that give Roots the functionality it needs to manage its increasingly complex retail environment.

“For example, if a customer is in one of our stores and we don’t have their size we can locate the item for them,” said Goren. “We put our stores into hunt groups. Stores within Toronto, say, will be able to search within a group of other stores in the city. The transaction comes back to the host, which lets the querying store know what store in the hunt group has the item. We can also do ‘send sale’, which means you can actually take the sale at store level, capture the customer’s shipping information, charge them the shipping charges, and then mail the item out.”

Store 21 is loaded with such features. Goren is patiently waiting until after Christmas to implement the ‘clientele’ capabilities of the system, which will help Roots build a client loyalty program.

“There are newer approaches to loyalty programs now. In the past you’d collect the customer name, address, telephone number and some specific personal information about them so you could send them a birthday card if you wanted,” she said. “We’re looking at different ways we might build our loyalty program. We think we’d like to reward people for being frequent buyers, or buying a certain dollar amount at Roots. And we want to be able to communicate with our good customers – let them know about mailings. But this is something you don’t rush into. You want to make sure that when you launch it you’ve thought it all out.”

One thing is certain about the loyalty program, it will tie in with Roots’ Web site, which will be converting to an electronic commerce model in the coming year. The site will have a virtual store for visitors to shop in, and purchases made electronically will be credited towards the loyalty program, just as if they had been made at a regular store.


Store 21 was rolled out in August. A new retail switch at head office now polls all the POS information from the stores and will be populating it into a new merchandising module, part of Richter Systems’ Supply Chain Cooperative Enterprise Suite. This is the second key piece of Roots’ supply chain puzzle. With an eye to the future, Roots saw the value of a suite of applications that will eventually enable it to integrate the manufacturing and wholesale side of its business.

The merchandizing module, which goes live in January, will provide easy access to information right down to SKU level, which should provide considerable efficiency from the warehouse right through to the retail outlet.

“From a distribution standpoint, the biggest hurdle we faced was carton tracking, or the ability to know what’s inside the carton,” said Christopher Fang, Senior Lead Analyst with Richter. “Scanning through bar codes and using our distribution module, Roots no longer has to confirm line by line. When the box arrives they just scan in one bar code instead of each SKU. It speeds up the shipping and receiving process immensely, both out of the warehouse and at the store. They’re getting it there faster, confirming it at the store level faster, and getting it on the floor more quickly, giving them a better opportunity to sell the merchandise at full price.”

Another feature that Darlene Goren likes is the ‘suggested transfer’ capability, which gives Roots better control over where it places its merchandise. If something is not selling in a certain store, rather than marking it down the system will suggest a transfer to a store where those goods are moving. “Instead of somebody having to sit there with reams of paper, doing a store by store analysis, the system will suggest a transfer, based on rules you build into it in the beginning,” Goren expained.

If the suggestion is accepted, it gets downloaded to the store’s system, and the store keys in the transfer in accordance with its inventory at the time. The response is then communicated to the head-office system, which triggers the transfer to the receiving store.

“It used to take a lot of analysis and a lot of time on our allocator’s part to do all of that. Now, in a nice loop, we’ve automated that whole piece,” said Goren.


With the DataVantage and Richter systems working in tandem, Roots will have detailed access to information about what’s going on in the organization – what’s selling and what’s not, what needs to be marked down, what items aren’t being merchandized properly, etc. As more and more of the functionality residing in the new systems is utilized, Roots will be able to manage its business – from the manufacturing floor to its retail outlets – at peak efficiency.

But it won’t all be down to the technology itself. Part of this efficiency will come from changing internal processes. Roots is a very big believer in looking at its processes and procedures, and making them better.

“As we move over to the new systems we’re going to be doing things differently. We did it when we put the store system in – day one when it was rolled out we had a whole new set of procedures for the stores. And day one when Richter goes in there’ll be a whole new set of processes and procedures for head office,” said Goren. “I don’t think you can put new systems in and not do that. If you do you’re not giving your company the advantage that this new technology gives you. To me it’s not just changing the technology and the application; it’s changing the way you do business.”

Changing the way you do business has become a corporate imperative for Roots as it adapts to its burgeoning success. With its supply chain in fine shape, the company is ready for its next Olympian performance.


With a wealth of experience behind her, Darlene Goren, Roots’ Director of Corporate Operations & Technology, has learned some valuable lessons in implementing retail systems projects. Here’s some of Goren’s advice that should be useful to any CIO.

1. Do your homework before you sign the contract

Vendors will do demos for you, but you really don’t know what kind of functionality the application has until you do an in-depth analysis. Getting into the nitty-gritty details before you sign the contract enables you to make sure that there aren’t going to be a lot of surprises afterwards. You’ll know what’s there and what isn’t. That’s important.

2. Interview your vendor’s team

You have a say as to the make-up of the project management team. Don’t just accept whoever the vendor wants to give you – meet with them and make sure they click with your team. Find out what their strengths and weaknesses are, and make sure your team balances with theirs. If you’ve got someone that’s extremely strong in project management, let your team do that while they supply needed skills elsewhere – or vice versa. Make sure there are enough people on their side, so that if you lose a key team member your project is not going to be in jeopardy.

3. Keep the application vanilla.

You may think it’s great that you’re getting an application custom made, but often what you’re doing is simply making it work the way things worked in the past – and that isn’t necessarily the best way. The more you modify a system, the more problems you’ll make for yourself down the road. Every time you want to move to an upgraded version or take a patch from the vendor you’ll be stuck, because now the vendor will have to retrofit all of your modules.

4. Don’t underestimate your staffing challenge

Allow yourself a lot of time to recruit. With the demand for good people – especially those who know the business side as well as the technology side – you’re not going to find the right people in a few weeks. Sometimes it will take you several months.

5. Maximize your ‘dedicated’ staff

Project staff who remain in their regular jobs tend to get sucked back into their own work. Pulling key users from the business and dedicating them to the project is the best approach. They can concentrate totally on how the new system works, and what business and process changes should be made to get the most out of the new environment.