BACK TO THE SIMPLE

LIZA CASABONA

Food retailers want to make it less complex when it comes to implementing new back office systems. That's the assessment of at least one well-respected systems consultant when it comes to taking a peak behind the IT scene.

Ken Fobes, chairman of Strategy Partners Group, Ponte Vedra Beach, Fla., said he sees back-office systems moving toward simpler, more automated operating platforms.

"I've had a thing that I've said all along, that to me the best store technology is invisible technology. It's there for support and help, but it requires very little help or maintenance on the part of store people."

Fobes said one of the trends he observes is systems that are very simple to use at the store level and make data available remotely.

This allows store personnel to focus on customers, not machines, and transform the information available into key pieces of information, he added.

Other industry observers who work with these technologies concur.

While there is a strong drive to control costs, retailers still want to acquire strong market shares and guarantee that their customer experience is as pleasant and quick as possible.

In the past, observers no-ted, those were seen as offsetting goals with the result being that stores implemented just enough infrastructure to torture their customers.

But, such is not the case anymore, observers told SN.

Increasingly back-office systems, whether software- or Web-based, are streamlining the supply chain into a user-friendly model that results in a consumer-friendly store.

According to industry observers, Supervalu, Minneapolis, uses an EDI (Electronic Data Interchange) system that is moving towards XML (eXtensible Markup Language).

EDI is a decades old computer language that allows communication between suppliers and distributors and retailers.

XML, is a newer computer language used for defining data elements on Web pages and on business-to-business documents.

A few months ago, Supervalu began an aggressive push to get its small and medium-sized suppliers EDI compliant.

Supervalu chose EDICT Systems from the Advant-e Corp.,Dayton, Ohio, to do this.

David Rike, EDICT Systems director of sales and marketing told SN that Supervalu was one of the most aggressive in this regard.

In this aggressive bid to get all its suppliers on the same page, Supervalu required all its suppliers, big and small, to submit electronic purchase orders and invoices.

This aggressive approach worked fine with larger vendors, like General Mills or Kraft, whose size and sheer volume of orders offset the cost of the software and technology that allowed them to comply with Supervalu's request.

But for smaller mom-and-pop or direct-to-store suppliers, the cost of an EDI system was too much and their margins were too low.

Grocery EC, the EDICT product Supervalu chose to close this gap, is a Web-based system that requires only a Web browser and an Internet hook-up.

Moving away from the old paper-based system allowed Supervalu to save on labor and error costs inherent in the older system.

Technologies that follow this trend, like Grocery EC, allow managers to step out of the back office and away from the piles of paperwork that occupied their time before.

"One of the things we see happening right now are systems that are simple to use at the store level, require very little intervention, and have the capability of being delivered to managers in the stores remotely so that they can receive the information at their point of need," Fobes asserted.

Moving managers back out onto the floor to manage product supplies puts them back at the point where they interact with customers, he added, addressing what was a major issue in the industry.

Other technology companies have responded to the same connectivity concerns by also developing systems that use the Web to integrate information into legacy systems.

ITradenetwork, Livermore, Calif., offers a distributed integration server, an XML-formatted system that allows retailers to transmit purchase orders, change orders, and to invoice.

It streamlines operations and opens up a variety of cost-saving options.

A few months ago, Albertson's, Boise, Idaho, began implementing the iTradenetwork system.

Albertson's will use this system for integration into its existing legacy system. It will also provide connectivity to more than 1,500 suppleirs.

However, for smaller, independent retailers, other cost concerns are also an important factor in the direction taken with back-office systems.

Marvin Imus, vice president, Paw Paw Shopping Center, Paw Paw, Mich., a one-store operation, said he would really like to get involved with EDI and some of the new streamlined back-office systems, but they are priced too far out of hisrange still.

He faces the prospect of not only upgrading his back-office software, but replacing his front office, getting the hardware capable of supporting the software, and being aware that Internet service in the rural area he is in is tenuous.

"My frustration level comes from the fact that most of the things I see are unaffordable to us.

"Which is too bad. The nightmare is that I can see the products out there that I need to survive, but I can't afford to buy them. And even if I tried to afford them, I couldn't afford to install them."

For his smaller operation, where knowing your customers is the key to staying afloat, he said he would like to find a well-integrated system that runs back office and front office off of the same engine, or data warehouse.

He sees the two systems as being very closely tied together, with only a fine line dividing some of those technologies that are strictly back room from the front end.

The first features to go when software providers make an affordable option for independents, he noted, are precisely those features he finds the most important: a strong, transactional history database tracking frequent customers and a back end that is fully integrated with his front end on the same database.

"Obviously, I want to integrate the back door, our DSD, into our front-end software so that we have more and better control," he said.