FOSCHINIDATA
Brent curry
POSITIONING
Foschinidata provides world-class information and communication technology (ICT) to the Foschini group, using a combination of fully integrated third-party solutions and in-house-developed software. The division’s major implementation partners include large multinational suppliers such as SAP, JDA, Microsoft, Manhattan and IBM.
Foschinidata’s overall aim is to consistently deliver ICT solutions that add outstanding value to the group and it has reached the point where it is well structured to achieve this objective.
Foschinidata acts as a strategic partner to the group’s divisions in meeting their specific business requirements. It also researches and tests ICT technologies which may enhance the divisions’ business operations. To this end, Foschinidata launched its “Store of the Near Future” in the past year. This is a concept store located in the group’s head office in Parow. The Store of the Near Future showcases store technologies which will enhance customers’ shopping experience, as well as assist store personnel in improving store efficiencies.
A number of these technology differentiators which have proven their worth have already been deployed to the stores in the group.
The group’s reliance on information technology (IT) for its day-to-day operations means that IT information security, risk management and governance (including alignment to the King III IT principles) are key focus areas for Foschinidata. With this in mind, best-practice methodologies have been adopted for system delivery and support via the ITIL service delivery framework (an ICT service delivery framework for managing ICT applications, services and technologies), the Cobit model for IT governance (an ICT governance framework ensuring good governance principles are adhered to) and Prince II for key project delivery (a project management framework and principles designed for good project management of ICT solutions). In addition, disaster recovery plans are updated and tested on a regular basis. This comprehensive approach ensures that Foschinidata meets the group’s business requirements and complies with concluded service level agreements (SLAs).
The group’s investment in ICT is substantial, with total ICT capital expenditure for the past year of around R80 million and operating expenses of R217,5 million. The latter represented 2,4% of sales.
The ICT cost for the trading divisions only (and excluding all financial services and manufacturing operations) was 2,0% of sales, which is in line with global norms for the retail industry. A graphic illustrating this statistic in the 2010 year follows on the next page, known as “Gartner’s IT Spending as a Percentage of Revenue, by Industry”.
The breakdown of the operating cost is illustrated in the pie chart below:
Breakdown of operating costs
IT spending as a percentage of revenue, by industry 2010 (average)
The Foschinidata division employs 199 permanent and 45 contract staff, and continues to focus on sourcing and developing the correct technical capabilities of personnel to meet the group ICT objectives and strategies.
The 2010 year was again a rewarding period for Foschinidata, with the following key advances being made:
- Implementation of a new gift card solution across all trading divisions.
- Developing and enhancing various credit systems to cater for new financial products and offerings in the Financial Services division.
- Continuation of the business intelligence (BI) initiative with a focus on delivery requirements arising from the group’s supply chain project.
- Research, development and showcasing of various store technologies in the group’s Store of the Near Future. A number of the technologies found to be promising and now being implemented in divisional stores include store product kiosks in @home stores and multimedia devices in stores of the Foschini and Sports divisions.
- Driving server consolidation and virtualisation in our head office environment resulting in less energy to power and a reduced carbon footprint.
- Equipping the trading divisions’ field managers with laptops and 3G connectivity, thus giving them access to the group’s systems “anywhere and any time”.
- Continued delivery and roll-out of a new electronic time and attendance system for the group’s stores. This initiative will be installed in all of the group’s stores by March 2011.
- Successful implementation of an electronic funds transfer (EFT) system which is integrated at store level with the group’s point of sale (POS) system and is fully EMV(euro/ master/visa card) compliant.
- Successful introduction of a standard warehouse management system, known as Manhattan Associates’ WMS, at the group’s distribution centres and already implemented at the year-end in the Markham and exact! divisions.
KEY INITIATIVES FOR THE 2011 YEAR
These include the following:
- Completion of the time and attendance system project at store level.
- Implementation of the new warehouse management system in the Foschini and Sports divisions.
- Prioritised credit-related systems.
- Support for the group’s supply chain initiatives through participation in the group’s business intelligence (BI) team, via data analytics and reporting.
- Implementation of a new PABX solution at the group’s head office.
- Implementation of a customer relationship management (CRM) solution, known as SaS, in the Financial Services division.
- Implementation of an IT solution for the group’s manufacturing division, TFG Apparel Supply Company.
- Commencement with the implementation of a replenishment and forecasting system, known as Logility, throughout the trading divisions.
