THE MISSING LINK 1995-08-07 (1)

DENISE ZIMMERMAN

Fluid integration of multiple applications in an open-systems computing environment remains an elusive goal for many retailers.

A short time ago, leading-edge retailers championed open systems' attributes of software portability, scalability and interoperability. Today they wrestle with achieving the latter objective because integrating various applications in an open environment is no easy task.

"It's very fragmented. I think all of us are trying in one way or another to get it done but our success has been limited. I haven't seen very much integration," said Bob Bray, vice president of management information systems at Furr's Supermarkets, Albuquerque, N.M.

"I'm not overwhelmed by what's been accomplished so far," he added.

Bray said he is, however, optimistic that new systems that interface more easily with one another will be developed in the future.

He's not alone in that camp. Other retailers also told SN that better integration tools will be made available as companies progress with category management. The learning and tangible benefits yielded by successful programs -- which rely on consistent, integrated data -- will more clearly identify needs and point the way to better solutions.

In the meantime, however, coping with systems that are not harmoniously integrated is costing retailers on several fronts:

Lost Margin: When price increases make it to the meat scales in the deli department before the point-of-sale system is updated, for example, the customer is charged a lower price and profits are lost. Integrated systems capability would enable stores to simultaneously update all prices storewide.

Lost Productivity: Pricing discrepancies lead to manual price checks, slowing the checklane and frustrating shoppers. Maintenance to nonintegrated store systems requires re-entry of data and more manual handling of paper.

Unreliable Decision Support: Numerous and unsynchronized data bases maintained separately for purchasing, warehousing and financial operations often contain conflicting information that can compromise the effectiveness of programs like category management and electronic marketing.

The massive volumes of data retailers manage and collect don't yield much value if the sources generating the information are not linked to one another. Increasingly, retailers seek to consolidate this information to obtain a "big picture" view of the business.

"Each store department sort of has its own little 'file cabinet,' and we keep stuffing more and more information into them. But it doesn't seem like we're making a lot of headway on how to look into that file cabinet to see what's going on in the whole company," said James Rau, director of management information systems at Prevos Markets, Traverse City, Mich.

The seven-store independent, along with a handful of other operators served by wholesaler Spartan Stores, Grand Rapids, Mich., hopes to turn that situation around. One of Prevos' stores will go on line this month with a new system designed to integrate the point of sale with receiving and back office financial operations.

Retailers who have implemented open-systems computing have been sold on the advantages of software portability, scalability and interoperability -- capabilities not offered by traditional proprietary systems. However, MIS executives counting on problem-free applications integration have frequently been disappointed with results thus far.

"We see retailers go out into the marketplace with a naivete, expecting a truly 'plug and play' environment. They don't understand they have to create interfaces to get these systems to work together," said Matt Chambers, chief technologist for the Commercial Services Business Unit of EDS, Plano, Texas.

"It's a tremendous investment. There are hidden expenses," he added.

The hidden costs swirling around open systems and integration efforts stem mostly from the single aspect that is at once enticing and intimidating: choice.

The freedom to select the best components to build an information technology system is an intriguing prospect, but it also opens doors to costly missteps.

"It's difficult to take a 'best of breed' approach and select different applications from different places and have them work easily together so you don't have the opportunity to make mistakes," said Calvin Sihilling, vice president of information systems at Alex Lee Inc., Hickory, N.C.

Operating systems may use "open" architectures, he said, "but they don't necessarily have an open data structure. If they don't have the same inventory file, for example, so what if you can't get the data to work together?

"If you can't get two systems to talk to each other, you end up [maintaining] two store inventory files, and this is not pretty. Take that times four applications in a store and it doesn't take too long to figure out that you're going to spend a lot of time synchronizing your information."

An open computing environment "allows you to change your hardware platforms easily," Sihilling added. "It doesn't necessarily say the applications you run on them are going to talk to each other."

Integrating applications in an open computing environment requires careful, educated selection of software, retailers agree.

At 44-store Byrd Food Stores, Burlington, N.C., which has been developing open-systems architecture for two years, selection of applications is an ongoing challenge, said Robert Hartless, director of MIS.

"There are definitely a lot of options out there, but just because there's a lot of software doesn't mean it's good stuff," he said.

"The biggest challenge probably is what the company as a whole thinks should be integrated, whether it be the point-of-sale and debit-credit integration or POS and debit-credit integrated into the communications back to the corporate office," Hartless said.

"The hardest decision is determining which ones to do first and which ones will benefit the company the most," he added.

Setting priorities and keeping up with the learning curve of open systems technology adds complexity to all MIS projects, large and small. Some retailers say that pioneering activity is best left to those companies with deep pockets for funding research and development.

"Unbundling the hardware from the software leaves the retailer fending for himself in an open marketplace," said Larry Sachs, vice president of MIS at Red Apple Cos., New York. "While it presents more opportunity, it also makes it more difficult to find the right pieces of the application puzzle and make them fit together.

"It creates more choice and more risk, and the risk means there may be times when you scab your knee pretty badly," he added.

Retailers who take such tumbles may have grown too accustomed to the systems support proprietary vendors have provided in the past and may be unprepared and ill-equipped to develop open systems on their own, vendors say.

"There's a certain amount of 'hand-holding' that retailers have taken for granted," one manufacturer told SN. "In the world of open systems, the cost comes down dramatically but it exposes all this additional work that's been done by the vendor. When the retailer tries to do it himself, he finds it much less easy than he thought it would be."

Robert Heiss, vice president and chief information officer at Richfood, Mechanicsville, Va., said retailers have made steady progress in implementing open-systems architecture, and he looks forward to developments in parallel processing and better information access across all company operations.

"We will see a trend toward maximizing resources within the enterprise and a tremendous amount of information sharing -- placing information at the point of attack," he said.

"That's where the real bang for the buck is: tying operational decision-making to a common information base and making it available," added Jim Stikeleather, partner at Technical Resource Connection, Clearwater, Fla.