Research and Development/Tech Change/Emerging Technologies,

Loeffler, Bob

English

Research Papers in Economics

Moving from the Tactical
to the Strategic Use of Technology
Bob Loeffler
I.T. as Strategy
. Architecture and Infiastructare
. Planning
l E-commerce
l Knowledge Management
Architecture Hardware and Software
: O&):nhble
. Time Left in Life-Cycle
. Popdar
l Reasonably Priced
Architecture Objectives
. Avoid “Noah’s Ark-I-Tecture
l Simplicity
l Power
l Speed
1. T. Planning
~.---- ------- ------ ------ ------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ ------ -----
i 1
; Strategic Thhking i
1 I
~ I Business Data I
,------- .-.
Bob Loefller is chief information oflicer and president, H.E
Butt Grocery Company, Pantry and Dallas Divisions.Loe@er, Bob A40vingfiom the Tactical to the Stratep”c Use of Technolo~ 57
E-Commerce
l With Employees
l With Suppliers
l With Customers
Partner
A
Intranet Pa&nerNet Internet
D “ ‘raneti .1 .1
Employee Communications
l New Product Notice/Set of Instructions
l Pick of the Week/Items to Push
l Employee Discount Programs
l Digital Video Segments
l Polls and Surveys
Self-Service
l
l
l
l
l
l
l
l
l
l
Electronic Net Check Advice
Online Expense Reporting
W2 Info, W4 Data Change
Vacation/Sick Information
Flex Account Balances
Job Postings and Self-Nomination
Open Enrollment
Address/Personal Information Change
Savings Plan Transactions
Credit Union Transactions58 A4arch 2000 Journal of Food Distribution Research
Training
l CBT Courses Delivered Via Internet
-PC Basics
-PeopleSoft Web Interface
l CBT Courses Delivered Via In-Store Machine
-Retail Basics-Making More Cents
-Produce Test
-ACR Training Modules
-Alcohol Sellers Training
-Orientation Modules
Key Constraints
. Web Access at the Store Level
. Network Inilastructure
. Effectiveness and “Freshness”
of Presentation to Create Excitement
. Capital Needed to Get and Keep
Necessary Technology
l ISPM Partner Skill Sets to Develop
Solutions in New Web-Based World
E-Commerce With Suppliers
Reporting
l Plan-O-Gram Changes, Cut-h Instructions
. DSS Report Access
. Daily/Weekly Sales Reporting
l Budgeting/Reporting
. Publish/Subscfibe Setup for Reports
You Are Authorized to See
l Knowledge Management
l Shortcomings of Electronic Data Interchange
. Tactical Use of Internet With Suppliers
. Industry Strategic Use of Internet
With Suppliers
Retail Industry-Supplier
Internet Direction
HEB 144
I 1
1 I I
I wal*Mart 1+
I ~ndalls WI
I Kroger Id
Product Database
Graphics
Scan-Based Trading
Promotions
1+ Kraft I
1:
I
I
t?
P&G
1
1+1 Neurnan Distr. I
1-
~1 PiUsbury ILoefler, Bob
E-Commerce With
. Webvan.com
A40vingj?om the Tactical to the Strategic Use of TechnoIo~ 59
Customer Competition
-High Talent Management
-More Than $1 Billion in Investment Capital
-Logistics Specialists-High Automation ,.
-Aggressive Deployment Schedule
,“
-Dallas Market Entry Next Year
l
. Peapod.com
-10 Years of Experience
-Limited Capital for Growth
-Unprofitable Model in Texas Peq&.cc3m
-Moving Toward Centralized Distribution
. Albertsons.com
-Home Delivery of Non-perishables in Texas
-UPS for Statewide Distribution
-Currently Testing in Dallas
l Others
l HEB.Com???? Or Not????
E-Retailing Mission (Warm & Fuzzy)
. Leverage Web Technology to Make Shopping Easier
. Provide Customers Easy Access to Information That Will Assist in Purchasing Decisions
. Provide Customers With a More Convenient Shopping Experience60 March 2000 Journal of Food Distribution Research
Mission (Cynical Version)
. Take the Hassle Out of Shopping!
-Let people who absolutely have a miserable time shopping at our stores
get out as quickly as possible or not go at all.
Digital Strategy: The Real Opportunity
l Create a New Channel of Distribution
-Store Pickup
-Home Delivery
-Mail Delivery
l Support Our Existing Infrastructure
-“Pre-shopping” Tools
-Brand-building
-Kiosks
-Community
. Both--’’Clicks and Mortar”
Long-Term Planning and Analysis
. Research Full E-Commerce
-What kind of fidfillrnent system do we employ?
-What do we outsource?
-Should we host the architecture?
-Can we extend our brand by selling additional categories?
-One-to-One Marketing-How do we capture and leverage customer data?
-Central Market, Pantry, Mexico?
. Should we create an “HEB.tom” organization?
In the Meantime. . .
. Customers are screaming for coupons!!
!wrm$dzr rtrFml 5’<:Loe@er, Bob A40vingj?om the Tactical to the Strateg”c Use of Technolo~ 61
. Pharmacy is going live.
-Online Rx Refills ...
-Product Information
$irp~~ ;;,’),;:,,i’;+’’%~j~,,u:i;
-New Rx Requests .,,B,&,Up:ti
Fact-Based Decision-Making (Knowledge Management at H-E-B)
l A Paradigm Shift
Current State Future State
-Barriers Preclude Use of Facts -Barriers to Facts Are Low
-Action in the Absence of Knowledge -Action Based on Facts
-No Measurement of Decision Impact -Measurement Leads to Improvement
. Functional Infiastrocture Model
Extractingdata
from OIJTP
systemsources,
preparingi~ and
loadingit to the
target system
)
Hardware
archkxted and
database
modeled for
consistentuse
acrossthe
enterprise
Intuitivereporting
anddata WX%5S
easilymaintained
andmodifiedas
needschangeMarch 2000
Implementation Model
High4evel
h.winess process
mappingand
requirements
gathering
)
\
Create business
data fk3W and
)
decision-making
model
Journal of Food Distribution Research
Benchmark
requirementsand
modelagainst
leadingfirms,
bothinsideand
outsideindustry
Define and Prioritize Work
-Segment decision model into 3–6 month ~roiects
-Q&nti@ both value to the organization ad &fficulty of implementation
-Difficulty of remaining projects should decrease and value should increase
100
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10 lH
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0 10 20 30 40 50 60 70 80 90 100 110
Difficulty Index
. Five Key Success Factors
(1)
(2)
Senior Executive-Level Sponsorship
(Must have significant cross-functional responsibility.)
Projects Driven by Business Needs, Not IS
(Don ‘tassume that ifyou build it, they will come.)Loe#ler, Bob h40ving>om the Tactical to the Straleg”cUse of Technolo~ 63
(3) Front-Loaded Planning to Ensure Data Accuracy, Integrity, and Cross-Functional Integration
(Design qualip in rather than to inspect defects out.)
(4) Access Tools Must Be Easy and Functional
(Strivefor a 10X increase in ability to assimilate data.)
(5) Deliver Real Business Benefit Early
(One Meal at a Time. Don ‘tTV to Cure World Hunger.)
I.T. as Strategy
. Led by Senior Management
-May need NERD program!
-1.T.must be topic of discussion at every meeting
. Requires MONEY!
-“Rolling Thunder,” not the “Big Bang”
-Generate savings to pay for next moves
. Will Determine the Winners and Losers by 2010

MOVING FROM THE TACTICAL TO THE STRATEGIC USE OF TECHNOLOGY

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Research Papers in Economics