When it comes to the retail industry, one of the biggest challenges for ERP “suite ” solutions providers is that most retailers simply cannot afford the time or money to launch a multi-year effort to take on a wall-to-wall systems implementation. For this reason alone, retailers have tended to take a serial “best in class ” approach to implementing point solutions, and usually incurring the integration costs themselves. It’s also the reason that RSR has long advised the big suite providers to position their deep portfolios as a “pre-integrated solution portfolio ” rather than as an “ERP for Retail “.

The problem for retailers who do take the “best in class ” approach is in the ongoing costs to support the integrations. And as RSR noted back in a 2009 study on IT/Business alignment, mid-tiered retailer IT departments are hit particularly hard – for the simple reason that the cost of an IT programmer/analyst is the same for a company with $250M in revenue as for a company with $250B, but for the smaller player that IT employee’s salary represents a bigger piece of the company’s IT budget. Thus, mid-tiered retailers spend a higher proportion of their IT budgets just maintaining the current production environment than in creating new value for the business. Given the fact that today almost all of retailers’ innovation strategies are driven by new technology adoption, this status quo is a formula for disaster.

But technologies have changed even since 2009, and mid-tiered retailers don’t have to remain stuck on the support treadmill. There are several changes in how IT functionality is delivered today that simply weren’t real 10 years ago. First of all, commercial solutions are far more functionally complete and flexible than in days past, and retailers can cycle up an application “plain vanilla “, without modification. That substantially lowers the time and money required to go live. Secondly, solutions can be delivered via “the Cloud ” either as a single instance or as a multi-tenant solution, and that vastly reduces the capital costs associated with adoption. And finally, there are platforms available today that are specifically designed to enable the integration of legacy point solutions and new solutions together into a coherent portfolio of interacting functions.

One such platform is JDA’s FLEX. FLEX is intended to enable integration of hybrid solution sets, whether the point solutions to be integrated live on premise “behind the firewall ” or in “the Cloud “. This is important for JDA because it enables the company to integrate its new generation of solutions to be delivered via the Google Cloud Platform ( “GCP “) with traditional on-premise JDA software and non-JDA solutions.

The Charlotte Russe Story

The power of FLEX was demonstrated at a presentation given at the JDA Focus 2016 conference in Nashville a couple of weeks ago, by Debra Jensen of fast fashion retailer Charlotte Russe. Debra is Senior Vice President and CIO at Charlotte Russe, and the topic of her presentation was “Moving Fast to Deliver Profitable Consumer Commerce with IBM Order Management “.

Charlotte Russe opened its first store in 1975, and currently operates over 550 stores. It accelerated into fast fashion (competing with the likes of Forever 21, H&M, etc.) and into the digital space in the late 2000’s under the leadership of Old Navy veteran Jenny Ming. The San Francisco-based retailer is implementing Demandware for its e-Commerce offering, and uses “legacy ” JDA solutions for Portfolio Merchandise Management ( “PMM “), allocation planning ( “Arthur “), enterprise planning, size scaling, and warehouse management.

Debra explained how the company needed an order management solution to accommodate the growing volume of business from the digital side. That volume is being driven by mobile users in particular; the CIO noted that the mobile app has over one million users, and 25% of those users also engage with the stores. Clearly, the retailer has an “omni-channel ” challenge. To address that challenge, the company chose IBM’s Sterling Order Management System delivered via the cloud. With a “vanilla ” implementation as the mandate, Debra and her team established a 5 month timeline for delivery.

Beyond the functionality that the Sterling OMS delivers, Charlotte Russe is viewing the integration between Demandware, the OMS and the legacy JDA suite over the FLEX integration platform as the basis for a go-forward strategy the will address omni-channel fulfillment, or “profitable customer commerce “, as Debra described. The first order of business to make that happen is inventory visibility across the entire enterprise, which the Sterling OMS will enable.

Good For The Retailer, Good For Solutions Providers

The Charlotte Russe story provides an excellent case study for how other retailers should approach the problem of how-to migrate to the next generation of IT-enabled retailing. The company has a roadmap for modernization, and has taken the time to consider and then adopt an integration protocol that will make it possible to implement new capabilities piece-by-piece while the company continues to operate. In other words, there’s no multi-year “timeout ” period while IT and the business embarks on an expensive and risky wall-to-wall modernization.

But the story is also instructive for legacy solutions providers like JDA, which can’t abandon its legacy installation base just because a new and better way of developing IT solutions has come along. It’s a good story for all those legacy customers how cannot afford to install the latest-and-greatest all at once, and it’s a great way for JDA to approach its own modernization roadmap.