Denmark’s largest retailer Dansk Supermarked is in the middle of an IT project to support its omni-channel strategy.
“We started implementing an SAP platform six years ago, and two years ago we applied a new online platform. Right now we are working on putting it all together,” says Alan Jensen, CIO of Dansk Supermarked.
The goal is to be able to use the master data and stock knowledge in the core backbone to control what is happening in the physical stores and online, according to Jensen.
“Creating an omni-channel and utilising the digital possibilities is the focus for the company as a whole and the IT department,” he says.
Omni-channel retail is the evolution of multi-channel retail, where all the different sales channels – such as brick and mortar, online store, catalogue and mobile – are seamlessly merged together.
“We have to follow how omni-channel is developing over the coming years and how we can make better contact with customers through, for example, social media and mobile devices. We also have to study customer behaviour – do they research online and buy in the physical stores or vice versa?” says Jensen.
IT project challenges
The implementation of the enterprise resource planning (ERP) system SAP for Retail was finished in August 2014, but there are still areas that need to be finalised and improved.
“It has been a big project. We had our own home-grown systems, but we have replaced them all. The reason is they were built over 25 years, so they were not living up to today’s standards and could not support our omni-channel strategy. A big benefit with standard [off-the-shelf] systems is that they are upgraded all the time,” says Jensen.
Dansk Supermarked is satisfied with the SAP platform so far, according to Jensen, but the implementation has not been without problems.
“It is easy to underestimate how much you need to prepare the organisation – you have to explain what is going to change and make sure people understand how the processes are going to work with the platform.
“We made that mistake, so after implementation in the first country we stopped to make changes. We reviewed how we had worked and we decided to put more resources into preparing the organisation. After that the implementation went much better,” he says.
Aligning IT and business thinking
Jensen believes this is the most important lesson he has learned during his 10 years as CIO at Dansk Supermarked. He took the role after 17 years at the company’s purchasing department.
“I have a bachelor’s degree in business and had not expected to become a CIO. It has turned out to be very exciting, mainly due to the role of the CIO changing dramatically during the past 10 years. IT and business are much more tightly linked and it was quite smart of Dansk Supermarked to see the importance of this as far back as it did,” he says.
Jensen thinks there will be an increasing number of business people in the CIO role in mid-size to large companies.
“I have tried to move IT into a better understanding of the business and we have come a long way. We have business relation managers and weekly contact with the different business units, talking about requirements and potential issues – and all projects have a steering group,” he says.
IT expertise in the right place
Dansk Supermarked was founded in Denmark in 1960 and has nearly 1,400 stores in five countries. The company operates the hypermarket Bilka, the traditional supermarket Føtex, the discount chain Netto and the department stores Salling. There is a central IT system for all the stores, even across the different chains.
The company reported revenues of DKK57bn in 2014, and has 42,500 employees. The IT department consists of 220 people and is located in Aarhus, Denmark’s second-largest city.
“We’ve had all infrastructure outsourced to IBM for 15 years, and 10 years ago we outsourced application maintenance and support to IBM too. We want to have experts handling these areas, since they are not our core competence,” says Jensen.
But Dansk Supermarked also has its own experts in these areas to challenge and work together with the outsourcing partner, which Jensen believes is very important. The retailer has also chosen to have development in-house, despite outsourcing maintenance.
Keeping tabs on product data
As part of the omni-channel strategy, Dansk Supermarked is now preparing to roll out a product information management (PIM) system. The retailer has chosen Step from Stibo as its master data management system provider.
“It will enable us to onboard master data about products much faster and cheaper. Currently, it takes five minutes or more to input the data manually for every new product, while the new PIM system will supply the information automatically, directly from the suppliers.
“The CIO role has changed dramatically. IT and business are much more tightly linked”
Alan Jensen, Dansk Supermarked
“The initiative to implement a PIM system came both from us and from the business. They have requirements and we have suggested a way to make their process more lean and agile,” says Jensen.
The PIM system will be implemented in autumn 2015. According to Jensen, it will only take five months for the first part to go live, but it will have a big impact on the process of how the company will onboard products and so it will be important “to have focus on the organisation”.
Supporting mobile payments
Another important project is to make it possible for customers to pay with their mobile phones in all Dansk Supermarked stores.
“It is a strategic partnership with Danske Bank and we have already rolled it out in some stores,” adds Jensen.
All supermarkets and hypermarkets will receive Danske Bank’s MobilePay during the summer, followed by Netto a little later.
“It is hard to say what this will mean for our business, but the smartphone is becoming more and more integrated in our lives, especially for young people. It is a fast-growing trend and we want to be able to give our customers the ability to pay with their smartphones,” says Jensen.
The next big project will probably be to make better use of big data, he adds.
“We are implementing a new business intelligence system, but we want to take this further and use our data [so] we make the right decisions in the future,” he says.
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