So this is my first blog. Got a note from the leadership team at SAP that as an Industry Principle it was felt that I should start imparting some of the wealth of knowledge lodged in my brain (and I do mean lodged) in the form of a web log or blog if you will. I’ve put off starting this thing for a couple of weeks but I saw my esteemed colleague Andrea France has already posted one about Twitter (she loves that stuff, I haven’t got it yet) so that makes me officially behind. Being a mildly competitive sort (I can hear my wife scoffing at mildly) there is no way I’m going to let Andrea get away with being the only IP here to post.
It’s a bit self serving for a software sales guy to speak about the state of the folks I’m selling to but I’ve not been out of the retail trenches long enough to not still have that passion and drive for success in the industry that has served me so well over the years. Let’s face it I wouldn’t be here at SAP had I not been able to be a part of the business. Anyway here goes;
I went to the WAFC convention a couple of week ago. For those that don’t know the WAFC stands for the Western Association of Food Chains. Its purpose in life is to raise funds for the education of food industry executives and associates in the western US. There are several programs they participate in but the primary focus is on the FIM or Food Industry Management Course taught for 4 months at USC each spring. Executives or potential executives are selected from the local grocery chains in the west and sent to Southern California for 4 months of intense learning and a bit of fun as well. I was actually nominated for this educational opportunity way back in my Lucky Stores days in SoCal and while I was not selected it was an honor to be mentioned.
So what does that have to do with the topic you ask? Well… SAP decided to sponsor or provide a scholarship to the WAFC and we signed up for the convention in Phoenix to get a feel for just what the WAFC was all about. The convention provides a kind of speed dating process where you submit a form to the attendees that have agreed to have meetings and they send you back a yes or no. I sent out 12 forms, got 3 meetings, four rejections and 5 ignores. All 3 of the companies that accepted my invitation contacted me via email or phone and wanted to know why the heck a software company wanted to meet with BUSINESS folks. Was I confused? If I wanted, they would be happy to pass me off to their IT departments where I really should have been in the first place. I explained that, no, I wasn’t crazy and I really wanted to spend some time with the business leaders talking about SAP and what our solutions could bring them.
The three sessions we did have were productive and the conference wasn’t a total bust, we did get a couple of leads but the process and the tone of the meetings and the schedules really hit home a point. In the food and drug industry, IT is still considered a necessary evil and in most cases does not show to provide value to its customers, the business users.
I just read a great article from RSR titled “IT and Business Alignment in Retail”. Lots of facts and charts and cool stuff to read, but the gist of the piece: Best run businesses align business leadership and IT, those that aren’t, don’t. It’s very apparent in the Grocery business. The business folks we talked to at the event were to a person, not pleased with IT. Weren’t getting the information they needed to get their jobs done. Most if not all were either Excel wizards or were in the process of becoming one. Don’t get me wrong, Excel is the most amazing business tool to come along since well….Lotus 123 (dating myself). But the fact that 100% of the business folks were dissatisfied with IT and its ability to make a difference in their worlds was indicative of the fact that over the past 30 years the grocery industry has ignored and refused to let IT be a part of the process. You don’t know how many times I’ve heard over the past 20 years the equation that states how many stores could have been built with the money used (or wasted in some eyes) to invest in IT.
As we call on clients and potential clients the story is mostly the same, the retailer has poor data quality, poor visibility into the data (especially store level), old antiquated technologies, point solutions cobbled together with bailing wire and bubble gum, or some combination of all. The industry is famous for low net income and making money on the velocity, wonder what would happen if they changed the one thing they are averse to changing, the place IT holds in their processes.
RSR advocates that Best Run businesses align IT with the CEO, not the CFO or stand alone. I like it, in my experience an IT stand alone organization or one the reports to the CFO is neutered. It either falls under the weight of being a cost center and providing nothing tangible to the bottom line except IT expense control or the CFO screws the budget down so hard that there is no way that real investment can take place. CFO’s are accountants and accounts usually believe in saving their way to profitability. Nowhere in the process is IT able to show the MONEY they can help the merchants and supply chain folks make. It’s the scorecard from hell in the grocery business, nothing but expense and constant pressure to cut it.
My nirvana (it’s my blog) would be the day when IT operations is the only part of IT that remains and the rest of the IT staff is dispersed and becomes a part of the business teams they serve. No more BI folks hunkering down in the IT section of the building spinning their propellers and devising ways they can do the work of 20 with a staff of 5. Prioritization becomes a process the business uses to make the most money, not on how to eliminate the least politically correct project in IT. I know I know fantasy land but the sooner business leadership gets that IT can MAKE THEM MONEY (caps in a blog are supposed to infer screaming, consider me screaming) the sooner IT can MAKE THEM MONEY!