Merlin works magic for Arnotts’ process change

15 Nov 2006

Arnotts is tying its IT plans closely to its business strategy with an investment of more than €5m in technology to support the redevelopment of its department store into a one million sq ft city centre complex.

The company is in the process of implementing an Oracle Retail platform at its Henry Street, Dublin outlet to support its ambitious expansion plans.

The scope of the IT project covers reporting, the technical architecture, business process change, organisational design structures and supply chain infrastructure. This underpins a whole transformation in Arnott’s business processes, which included the training of its 800 staff to manage the new infrastructure and retail processes.

The Oracle Retail system covers product-listing processes, merchandise management, purchasing and contract management, warehouse management, warehouse management as well as store and inventory management and settlement and payment processes. The system is fully integrated with Oracle Financials, providing Arnotts’ management with detailed, item-level reporting for accurate assessment of how the business is performing and to help the company to make profitable business decisions based on the information.

Dubbed Project Merlin, it went live in May of this year and it now covers 30pc of the business, with the rest due on stream between now and the third quarter of 2007.

As part of the same upgrade, Arnotts has also upgraded its electronic point of sale systems to Epson’s IR-700 point of sale devices. In total, Arnotts has 204 Epson IR-700s throughout every retail zone within the store.

Heavey RF installed a barcode scanning system that works by radio frequency technology, allowing Arnotts to make fast and efficient item-level stock counts as well as tracking stock losses across the store in real time.

In addition, the Oracle Retail system allows Arnotts to align in-store stock offering with customer demand in order to drive better in-season and fresh inventory management and allocation throughout the store. This allows Arnotts to be more creative around promotional and pricing activity, while optimising its use of retail space.

According to Paul Dickson, director of information systems at Arnotts, the company has outsourced the running of almost all of its IT systems in order to allow it to focus on its core business. Morse and IBM are handling the technical infrastructure and all hardware is hosted off-site at the Servecentric facility in Blanchardstown. The systems management and batch management tasks are also offloaded to Quickborne, a company based in Hungary.

“We’ve effectively become super-users of technology rather than architects of it,” said Dickson. “If we at the end of this process become database and application processing experts, then we’ve failed. We want to become business experts.” He noted that many projects which should have a business focus can drift quickly into becoming IT projects — “a language normal people don’t understand,” he remarked. “You have to establish a process that involves people in the change,” he told

Dickson emphasised that the project has had support from the highest levels within the company. “We were given the full financial backing to do it,” he said. “We had a rock-solid executive sponsorship to implement this product as quickly and as efficiently as possible.”

Unusually, up until a few years ago Arnotts had very little technology deployed around its store. “From a systems perspective it’s almost a greenfield implementation,” Dickson explained. Now, Arnotts has regular visitors from the US, Sweden, France and other Irish firms to see how it is putting the system to work in the service of its business. “Two years ago we wouldn’t have got a call about our IT strategy,” he added.

By Gordon Smith