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Retail Case Study: HCLT optimizes operational it costs for a leading home furnishing retailer through managed services
HCL Optimizes Operational IT Costs for a Leading Home Furnishing Retailer through Managed Services Region : Sweden, Europe Industry/ Domain : Retail/ CPG Functional Area : Supply Chain Planning, Integration and Execution, Retail Management, Retail Web Management and Infrastructure Area of engagement : Managed ServicesClient ProfileOur client is a leading global home furnishing retailer selling Scandinavian-style homefurnishings with fully integrated IT supply chains. They pioneered flat-pack, self-assemblefurniture and accessories manufactured largely in developing countries to curtail cost.They have operations in 41 countries – 29 trading service offices in 25 countries and 27DCs and 11 CDCs in 16 countries.The company’s IT landscape comprises of four business processes and 16 applicationareas that manage IT operations spanning Supply Chain Planning and Execution, SupplyChain Integration, Retail Management and Store Operations, Merchandizing Solutions,POS Solutions, Infrastructure Support and B2B Integration.Partnership Prerequisites and Key Business ChallengesOur client was looking for a partner who could help increase its IS capabilities by bringingin standardized yet flexible processes and enabling cost savings. This would allow theclient to focus on its core business of home furnishing and design better. Theexpectations and key business challenges that needed to be addressed included:? operational IT costs – Enable re-allocation of funds for new initiativesReduce? - To scale up and down as requiredFlexibility? faster and more predictable IT solutions, matching business needsProvide
? consultants in individual capacity to increase delivery capabilities straddled Employ with poor product-quality, people dependency and lack of processes ? meet IT capability needs - Especially for niche skills like JDA Manugistics for Hard to supply chain planning ? domain understanding among independent consultants Lack of Poor SLAs and resource utilization across various service lines. Lacked capability to ? effectively track health and quality of services and devise improvement plansOur client was looking for a ? working in silos, lack of managed service delivery with SLA adherence and IT teamspartner who could help it KPI-based reporting modelincrease its IS capabilities bybringing in standardized yet Enter HCLflexible processes andenabling cost savings. This HCL began this journey on 5th March 2007, by partnering with the global retailer towould allow them to focus on increase the delivery capacity. HCL was awarded service delivery assignments in thethe core business of home- supply planning and supply execution areas in responsibility sharing model.furnishing, and designingbetter and cheaper products HCL Services Snapshotfor its customer base. Service areas: Application Support & Maintenance, Application Development & Technology Migration, Support of Legacy Applications, Manugistics Implementation, Technical Documentation, Resource fulfillment and 24/7 Infrastructure Support services Tools and technologies: JDA Manugistics, PL/SQL, Oracle 10g, 11i, Java/J2EE, WebSphere Application Server, RAC R2/9i/8, Cognos 8.3, Rational Rose, ClearCase, Clear Quest, Data Architect, Pro-Pascal and OpenVMS DCL Scripts, VB.NET, ASP.NET, IIS and Web Method 7.x. Remedy Methodologies: ITIL V3-compliant processes for support, RUP, Agile and CMMi Compliant process for application development, HCL’s OMS and Practical Project Steering (PPS) methodology for project and portfolio management The HCL Difference Achieved substantial cost-savings by moving from “staffing-only” to “managed- ? services” model and by leveraging offshore for IT service delivery ? transparency in services through well-defined KPIs, SLA adherence and Offered dashboards-based reporting ? “Business KPI” through close monitoring of ‘Critical Order Flow’ for Enabled customer’s supply chain and reduction of backorders Managed services model also brings benefits like improvement in quality of service ? and faster go-to-market for customer’s new initiatives ?managing support (L2 & L3), maintenance and enhancements (ASM/ADM) for HCL is 16 mission-critical ,12 critical and 22 other non-critical applications Supporting complex legacy applications, based on VAX/VMS platform used for ? merchandizing, store replenishment and inventory management, is tightly coupled with multiple systems ? robust DR & BC plan with delivery enablement from two different cities – Offered Noida and Chennai HCL contributed in a study to bring in application landscape simplification and ? technology platform standardization for various products To achieve next levels of productivity improvement, HCL implemented ? transformational solution in supplying process by consolidating service level fulfillment of applications in Supply Execution and Supply Planning. ? years, successfully aligned HCL objectives with customer’s objectives – 4+ Over the years of engagement has led to an excellent partnership through mutual trust, transparency, collaboration and common ways-of-working.
Business Benefits Reduced inventory carrying cost: HCL managed application resulted in significant ? reduction in inventory carrying cost. HCL helped improve accuracy in the supply chain forecasting process from an average of 55% to 70% thereby preventing stores and DCs from being over or under-stocked. Less backorder, more savings: Close monitoring of ‘backorder creation’, business ?I am very proud of this KPI and increase in forecast accuracy accredited to HCL maintained applications,delivery and I would like to preventing backorder creation worth €700,000 per daythank all of you who were Improved service response time and SLAs: Improved service response time and ?involved for your hard work, increased SLA from 70% to 92% has led to satisfied business users. HCL has alsoyour focus and your helped deliver over 95% UPC adherence, consistently.togetherness in order to Consolidating productivity: Consolidation of support for supply chain execution and ?come to this result. planning application has resulted in productivity gains of 12%, with 8% reduction in cost of support achieved in the first year itself- Service Manager, at ? much required retail domain knowledge coupled with skilled technical Providedcustomer’s IT organization competence ? monitoring for improved service levels: Achieved service level Close improvements through closely monitored Problem Management, Cross skilling, Proactive Maintenance (Defect Prevention Analysis), Usage and Development of Self- Service tools and portals, Structured documentation and regular updation of Run- book Improved quality of service: Improved quality of service through proactive follow-up ? with stakeholders; Control ping-pong of tickets; Customer Satisfaction Survey; Structured Governance & Clear Escalation mechanism. The Current Scenario As the client decided to move from “develop and operate” to “manage and control”, HCL aligned itself to deliver through KPI-based managed services. Today for various project tracks, we deliver services around: Application support and maintenance ? Application development and technology migration ? Integration and B2B services ? Test center and production support services ? We operate largely in the supplying process with some presence in communication and selling and supporting processes. Of the 50 applications that HCL supports, 28 are mission critical & critical applications of the retailer. Hello, I’m from HCL! We work behind the scenes, helping our customers to shift paradigms and start revolutions. We use digital engineering to build superhuman capabilities. We make sure that the rate of progress far exceeds the price. And right now, 90,000 of us bright sparks are busy developing solutions for 500 customers in 31 countries across the world. How can I help you? www.hcltech.com