Piramyd On Shopping Spree For ERP, CRM & BI

by Julia Fernandes    Sep 08, 2004

With retail margins slipping and the industry facing a frequent seasonal backlash, technology is increasingly becoming the most preferred solution to stay ahead of competition.

Piramyd Megastore, a leading retail giant in India that provides a wide range of lifestyle goods, from fashion accessories to household products, is on the threshold of a major IT deployment drive, scouting collectively for suitable ERP, CRM and BI solutions.

Sharing the company’s proposed IT initiatives with CXOtoday, Abel Correa- assistant general manager- systems, Piramyd Retail and Merchandising Pvt. Ltd., said, “We seek to implement robust technology solutions to complement our aggressive growth plans across the country. In this context, we are on the lookout for technology solutions from specialists who have relevant experience in the retail industry.”

In the space of ERP, after having scouted around for an Indian vendor, the company has zeroed down to three branded players in the retail industry segment. “We are currently evaluating SAP, JDA and Retek to fulfill our software needs for managing rapid growth. Additionally, we will probably opt for Oracle Financials if we decide to choose JDA or Retek, or if SAP is chosen then SAP Financials would be the obvious choice,” stated Correa matter-of-factly.

Apart from ERP, the retail store is simultaneously hunting for Business Intelligence Software (BI) that should sufficiently address information requirements for their internal as well as their external users, such as business partners. Moreover, the company is also looking out for a suitable CRM solution.

Talking at length about the challenges of choosing the right ERP, Correa stated, “The core issue is the understanding of retail business requirements and this is possible only by spending quality time with the solution provider.”

“The gaps in the software should be identified upfront and work arounds for the same should be planned well in advance. There’s no point cribbing after the solution has been deployed. The right consultant armed with domain specific knowledge of the retail business is vital,” observed Correa.

Correa who also teaches ’IT In Retail’ at Mumbai-based Welingkars and SP Jain Institute, drew attention to some key areas. According to him, the first step is mapping the business process and evaluating the solution, followed by understanding the user profile and the change management to be taken up post-implementation. Subsequently, studying the hardware architecture (including communication links and security setup) and the database requirements is important. Finally, we need to gauge the impact on the IT unit in terms of manpower required to manage the ERP. Says Correa, “If it is Unix based then one needs to budget for that kind of manpower in the IT unit.”

According to him, ERP and CRM implementation are one of the key deliverables that can meet the retail mantra of ’More Sales from Less Inventory,’ as in the retail space its only topline and inventory that matters the most.

The retail entity hands out an exhaustive Q&A to each vendor. Despite all this groundwork, Correa admits that there is always a 20 to 30% gap between a customer’s needs and the solution of the vendor. He cites Indian localization required to manage the complex taxation in the country, as one of the reasons.

Correa who was earlier working with NBFC’s, made the transition to IT at Piramyd and in his own words, “is enjoying every bit of it.” Voicing his concerns as a CIO, he lamented about the lack of work force, who can understand the nitty-gritty’s involved in the retailing business. He also rued the fact that despite a pool of skilled IT talent in India; there exist a deep void in the availability of suitable India-made retail solutions. Correa would probably rate Indian software vendors 40-60 on the scorecard.

However, despite the presence of a strong in-house IT team, Correa ruled out developing an ERP solution, as the complexities involved were far too high. For e.g. developing modules such as merchandise planning, demand forecasting, would take ages and with limited experience, it would be too much of a risk.

In their existing IT infrastructure, RADOS and RetailMagik (both are POS software), addresses their billing needs, while their merchandise management software, which resides on an Oracle database, have been developed in-house. States Correa, “Though Polaris had initially developed it for us, gradually during the last 2 years, the IT team took over and began developing modules and added functionalities specific to our retail needs.”

In terms of the mailing solution, Linux-based Webmail is being used at the retail store whereas Lotus Notes caters to their communication needs at the corporate office. The company’s servers run on Windows NT while at the client end Windows 98+ have been installed.

The retail store also has a dedicated portal for their suppliers termed, “Piramyd Value Chain’. Though no online transaction occurs, suppliers are provided secure access to track their purchase orders, sales, stock status at different locations within the organization. Explains Correa, “This portal has helped us considerably in improving sales and stock availability.” According to him, it was the in-house IT team that worked extensively on the entire design, functional specifications, while the software coding part was executed by Mumbai-based Cybertech Networks.

Affirms Correa, “The current IT infrastructure is more than adequate for running at least another 5 new stores.”

Special emphasis is placed on training their IT staff as evident by the fact that having realized the potential of Linux, the entire hardware and networking team is undergoing training from Red Hat, while the software team is taking lessons in .NET technologies

Currently, though the retail store commands a presence in 3 cities in the western region, with a combined area of close to 120,000 square feet, plans are afoot to launch roughly 18-20 stores within the next three years.

Piramal Enterprise Ltd, is a $700 million diversified group in India that first pioneered the Mall concept in India with the launch of Crossroads- India’s first Mall in Mumbai. It subsequently entered retailing in a big way through Piramyd Megastore (apparel retailing), Piramyd Supermarket (Food retailing), Jammin (Family Entertainment Center) and is shortly eyeing the consumer durables retailing segment.

Tags: Retail, CIO