MIS-TICAL CHANGES

DENISE ZIMMERMAN

The age of Efficient Consumer Response is transforming the role of information systems departments. Companies embracing ECR initiatives, especially electronic data interchange and category management, are turning to systems staff for strategic solutions and insights into buying trends, not merely to solve data processing puzzlers.

Bob Heise, vice president and chief information officer at Richfood, Mechanicsville, Va., said the company recently restructured its information systems department to better pursue ECR-type programs.

"What we needed to do was develop and bring on board people who have more business and industry skill sets as opposed to the traditional programming skill sets," he said.

The renamed Business Systems Services department at Richfood has separated the maintenance function from development activities. New projects are now spearheaded by in-house analysts who "vertically attack business opportunities for us in the organization. Then we have a horizontal support structure with a chief programmer and an EDI group."

At Pay Less Supermarkets, Anderson, Ind., the influence of ECR on management information systems is no less pronounced, said Cindy Cooper, MIS manager for large systems.

"What I find myself and my staff doing more of is putting on different hats, not just setting up computers and getting the data bases ready," she said. "We're actually working hand in hand with merchandising, human resources and other departments."

Another MIS executive, who requested anonymity, said his 70-store chain has stepped up new projects in EDI and merchandising, with an ultimate goal of developing a full-scale category management program.

"In the past, our major thrust in information systems had not been in the merchandising area," he told SN. "I thought for five years it should have been, but it wasn't.

"Now, this whole movement toward more efficiency and doing things intelligently has caused me to take my most talented people to support merchandisers, rather than, say, store operations," he continued. "The data warehousing of sales information is our No. 1 initiative, and that's supposed to trigger our whole category management effort."

Quita Ryder, manager of merchandising systems, MIS, at Hannaford Bros., Scarborough, Maine, agreed that Efficient Consumer Response is quickly expanding the universe of information systems projects and giving rise to new partnerships.

"Certainly, MIS people are required to become more business-oriented," she said. "One of the things that has happened with ECR is that when I meet with vendors, it's not just the technical people, but the merchandisers, the salespeople, the transportation people, the distribution people.

"I've been a part of all those meetings and dealt with understanding all sides of our business, as opposed to just implementing EDI from a technical standpoint," Ryder added.

MIS executives no longer think in terms of just manipulating data -- developing EDI formats and resolving hardware and software compatibility issues. Technical staffers are coming to understand the content and purpose of data transmitted by EDI because it represents an important link between retailers and wholesalers seeking to partner in ECR initiatives.

EDI's ability to vastly improve data communications and efficiency across various computing platforms has made the initiative a top priority in many MIS departments.

At Richfood, for example, the emphasis on EDI objectives has reshaped the MIS mind-set.

"When we look at how we are able to obtain data for our suppliers and/or our customers, we put more thought into our study and design phase of our system development methodology today," said Heise.

"We concern ourselves more about trying to get data from other sources rather than merely from our own data bases," he added.

MIS executives say such an "enterprise-wide approach" signals a trend toward more sharing of data between all industry players.

Retail MIS executives are not only being drawn closer to business partners such as wholesalers and manufacturers, but also to individuals in their own organizations who now rely heavily on personal computers.

Users, many of whom also have computers at home, are more comfortable with technology and are forthcoming with

suggestions and proposals for hardware and software investments, retailers said.

The MIS department at Pay Less, a nine-store independent, has tapped into that user resource, Cooper said. "With some of the really good users, we are making them specialists on software packages" so they can advise on which programs are most suitable for various applications.

Another retailer, with more than 100 stores, said his MIS department has become increasingly receptive to users' suggestions when it comes to systems investments.

"The user community comes to you now with some ideas that they've already tried, and they might say, 'I'm making my own birthday cards at home. Why can't I have a color printer to do charts and graphs?' " said an MIS executive who asked not to be identified.

"You've got a much more astute bunch of people out there who come to you with ideas of what can be done. They're not just presenting you with a problem and saying, 'What's the solution from a data processing standpoint?' " he added.

Such open dialogue with users and senior management clearly illustrates that "we don't work in such a vacuum anymore," one MIS retail vice president said. "Top executives recognize that MIS objectives and corporate objectives must be aligned."

The coming together of MIS and corporate goals and the drive for efficiency began to influence how companies view information systems well before the industry effort was officially christened "ECR"in 1993, said Paul Bernish, director of public relations at Kroger Co., Cincinnati.

Bernish said Kroger and other companies recognized efficient practices undertaken by the likes of Wal-Mart, Dayton Hudson and J.C. Penney, and then "took a hard look at what we were doing."

At that point, "we started to look at MIS as a tool to greatly improve our efficiency and productivity of systems and logistics. And ECR developed as a conceptual framework for what companies had already started," he said.

"MIS is a very fast-growing part of the company and its importance can best be reflected in the fact that we just finished a three-year, $120 million commitment to MIS systems, which is a large chunk of money," Bernish said. "And we are going to continue with an equal level of investment in the years to come with MIS.

"Another reflection of how MIS has changed here is that although Kroger is very much a company that promotes from within, we went outside [the supermarket industry] to get [Senior Vice President of Information Systems Michael] Heschel and his second in command.

"We understood we needed to take a fresh look at MIS in terms of what it could do for us and what we needed to do to catch up," he added.

Cooper of Pay Less agreed that retailers' focus on information systems and their role in driving efficiency and productivity is a move in the right direction.

"All I can say is it was needed years ago. We're doing cleanup now and it'll be great in the long run if everyone will stay with the best practices and keep reminding themselves that it's not like it used to be -- and it's never going to be like that again.