Retailers are struggling to compete, struggling to innovate, finding change difficult. Like their counterparts in many industries, the set-up of their existing IT architecture is holding them back preventing them quickly adapting to new business models and exploiting opportunities. A new approach is needed to re-establish market leadership.

1. RETAIL TECHNOLOGY
THE NEED FOR A NEW
APPROACH
Oliver Guy

2. 2 |
Warehousing
Warehousing
Planning
Merchandise
Planning
Forecasting
Replenishmen
t & Alloction
Warehousing
Transport
Planning &
Execution
Purchase
Order
Management
Vendor Deals
Management
Execution
Stock Ledger
Store Operations
Head Office
Store
Inventory
Management
Point of
Service
Customer
Service
Returns
Management
Online & Channels
Customer
Order
Management
Commerce
Storefront
Visualisation /
Planogrammin
g
Item Master
Associate
Planning
Price
Management
General
Ledger
Ecommerce
Search
Store Support
Consumer
engagement
Private Label
Development
Channel
Inventory
Data
warehous
e
Data
warehous
e
Invoice
Matching
Finance & HR
Associate
Planning
CRM
Supply Chain Operations
Suppliers &
Third Party
Service
Providers
Marketing
offer
Management
Call Centre
Content
Management
HR
EXAMPLE RETAIL ARCHITECTURE
Assortment &
Space
Price &
Promotion
Planning
Inventory
Management
Store & Channel
Operations
Clearance &
Markdown
DSB
(Departmental
Service Bus)
Maintaining
Existing
Innovation &
Investment

3. 3 |
Customer
Order
Management
Data
warehous
e
Inventory
Management
Assortment &
Space
Price &
Promotion
Planning
Warehousing
Warehousing
EXAMPLE RETAIL ARCHITECTURE
Planning
Merchandise
Planning
Forecasting
Replenishmen
t & Alloction
Warehousing
Transport
Planning &
Execution
Purchase
Order
Management
Vendor Deals
Management
Execution
Stock Ledger
Store Operations
Store
Inventory
Management
Point of
Service
Customer
Service
Returns
Management
Online & Channels
Commerce
Storefront
Visualisation /
Planogrammin
g
Item Master
Associate
Planning
Price
Management
General
Ledger
Ecommerce
Search
Store Support
Consumer
engagement
Private Label
Development
Channel
Inventory
Data
warehous
e
Finance & HR
Associate
Planning
CRM
Marketing
offer
Management
Call Centre
Content
Management
HR
VENDORS COULD LOOK LIKE THIS…
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
HOME
GROWN
LEGACY
Head Office
Supply Chain Operations
Suppliers &
Third Party
Service
Providers
Store & Channel
Operations
Clearance &
Markdown
DSB
(Departmental
Service Bus)
Maintaining
Existing
Innovation &
Investment

4. 4 |
Warehousing
Warehousing
Merchandise
Planning
Assortment &
Space
Forecasting
Replenishmen
t & Alloction
Warehousing
Transport
Planning &
Execution
Purchase
Order
Management
Vendor Deals
Management
Stock Ledger
Store
Inventory
Management
Point of
Service
Customer
Service
Returns
Management
Customer
Order
Management
Commerce
Storefront
Price &
Promotion
Planning
Visualisation /
Planogrammin
g
Item Master
Associate
Planning
Price
Management
General
Ledger
Ecommerce
Search
Store Support
Consumer
engagement
Private Label
Development
Channel
Inventory
Data
warehous
e
Invoice
Matching
Associate
Planning
CRM
Marketing
offer
Management
Call Centre
Content
Management
HR
EXAMPLE RETAIL ARCHITECTURE
‘CONNECTING THE DOTS’ – MASSIVE COMPLEXITY CONSTRAINS
THE BUSINESS
Planning
Execution
Store Operations
Online & Channels
Finance & HR
Data
warehous
e
Inventory
Management
Head Office
Supply Chain Operations
Suppliers &
Third Party
Service
Providers
Store & Channel
Operations
Clearance &
Markdown
DSB
(Departmental
Service Bus)
Maintaining
Existing
Innovation &
Investment

5. 5 |
Warehousing
Warehousing
Planning
Merchandise
Planning
Forecasting
Replenishmen
t & Alloction
Warehousing
Transport
Planning &
Execution
Purchase
Order
Management
Vendor Deals
Management
Execution
Stock Ledger
Store Operations
Store
Inventory
Management
Point of
Service
Customer
Service
Returns
Management
Online & Channels
Customer
Order
Management
Commerce
Storefront
Visualisation /
Planogrammin
g
Item Master
Associate
Planning
Price
Management
General
Ledger
Ecommerce
Search
Store Support
Consumer
engagement
Private Label
Development
Channel
Inventory
Data
warehous
e
Data
warehous
e
Invoice
Matching
Finance & HR
Associate
Planning
CRM
Marketing
offer
Management
Call Centre
Content
Management
HR
EXAMPLE RETAIL ARCHITECTURE
Assortment &
Space
Price &
Promotion
Planning
Inventory
Management
COMPLEXITY EXAMPLE – BUY ONLINE, PICK-UP INSTORE
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3
3
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6
6
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1
6
7
8
9
9
6 6
79
9
5
Head Office Store & Channel
Operations
Supply Chain Operations
Suppliers &
Third Party
Service
Providers
Clearance &
Markdown
DSB
(Departmental
Service Bus)
1. Customer selects
2. Service location selected
3. Inventory check
4. Delivery capacity
5. Customer transacts
6. Product reserved, transfer
arranged
7. Arrives in store
8. Customer alerted
9. Customer collects
Maintaining
Existing
Innovation &
Investment

6. 6 |
DSB
(Departmental
Service Bus)
Clearance &
Markdown
Warehousing
Warehousing
Merchandise
Planning
Assortment &
Space
Forecasting
Replenishmen
t & Alloction
Warehousing
Transport
Planning &
Execution
Purchase
Order
Management
Vendor Deals
Management
Stock Ledger
Store
Inventory
Management
Point of
Service
Customer
Service
Returns
Management
Customer
Order
Management
Commerce
Storefront
Price &
Promotion
Planning
Visualisation /
Planogrammin
g
Item Master
Associate
Planning
Price
Management
General
Ledger
Ecommerce
Search
Store Support
Consumer
engagement
Private Label
Development
Channel
Inventory
Data
warehous
e
Invoice
Matching
Associate
Planning
CRM
Marketing
offer
Management
Call Centre
Content
Management
HR
Planning
Execution
Store Operations
Online & Channels
Finance & HR
Data
warehous
e
Inventory
Management
EXAMPLE RETAIL ARCHITECTURE
‘CONNECTING THE DOTS’ – THE OBSTACLES CREATED
Head Office
Supply Chain Operations
Suppliers &
Third Party
Service
Providers
• Visibility - Delayed visibility and decisions
• Connectivity – Poor integration among systems
• Process – Inconsistent systems and opaque processes
• Data Models – Siloed models and data sources
• Communication – poor connectivity to external stakeholders
• Automation – Applications failing to support business demand
• Big Data – Inability to scale with extreme data volumes
Store & Channel
Operations
Maintaining
Existing
Innovation &
Investment

7. 7 |
HR
Merchandise
Planning
Forecasting
Replenishmen
t & Alloction
Warehousing
Warehousing
Warehousing
Transport
Planning &
Execution
Purchase
Order
Management
Vendor Deals
Management
Stock Ledger
Head Office
Store
Inventory
Management
Point of
Service
Customer
Service
Returns
Management
Customer
Order
Management
Commerce
Storefront
Visualisation /
Planogrammin
g
Item Master
Associate
Planning
Price
Management
General
Ledger
Ecommerce
Search
Store Support
Consumer
engagement
Private Label
Development
Channel
Inventory
Invoice
Matching
Finance & HR
Associate
Planning
CRM
Marketing
offer
Management
Call Centre
Content
Management
EXAMPLE RETAIL ARCHITECTURE
Assortment &
Space
Price &
Promotion
Planning
Inventory
Management
ELIMINATING COMPLEXITY REMOVES THE OBSTACLES
Store & Channel
Operations
Execution
Online & Channels Store OperationsSupply Chain Operations
Planning
Supply Chain Operations
INTEGRATION & CONNECTIVITY
DATA (EVENTS)
TASKS (PROCESSES)
DECISIONS (RULES)
Suppliers &
Third Party
Service
Providers
Data
warehous
e
Data
warehous
e
Common
Reporting
Clearance &
Markdown
BUSINESSLOGIC
IN MEMORY DATA
Maintaining
Existing
Innovation &
Investment

8. 9 |
Driving Digital Retail
www.SoftwareAG.com/Retail
Oliver.Guy@SoftwareAG.com
+44 7721 956697