Greenalls Inns' finance systems and audit director Tim Kowalski points to a neglected shelf in the corner of his spacious office. There two deep-red leather-bound books lean carelessly against some out-dated telephone directories. These books, Kowalski explains, represented the company's management information systems, circa 1990. In those days, he adds, Greenalls only had two PCs in the entire company, but now it is one of the most dynamic, technically-advanced retailers in the country.
It's not unusual to hear of user organisations embracing technology rapidly, but the significance of Greenalls' transformation is that since it dumped its mainframe financial system in favour of one based on an IBM AS/400 mid-range box in 1989, every new system at the company has been based on PCs and PC servers. Not a single new COBOL or RPG program in sight.
The company, which was established in 1762, now has PCs on every head office desk, including a laptop docking station occupying the space on the desk where Kowalski's legacy paper-based ledgers use to lie open.
The company's 150 regional and area managers use laptops that connect to head office systems. The trigger for Greenalls' adoption of PC technology was a change in the law in 1990 that meant the company, then a vertically integrated brewer and retailer of ale, had to choose between concentrating on the brewing part of the business or the retail side.
"The Monopolies and Mergers Commission said the consumer was losing out because too many pubs could only buy from one of the big breweries. So they said any brewery could only control a maximum of 2,000 pubs," Kowalski explained.
At the time, Greenalls controlled up to 1,700 pubs. "We took the brave decision to close the brewing operation. Many companies sold their breweries, but we had a reputation for doing good pubs but crap beer." In order to transform the company from a regional family brewer to a national publicly-quoted pub retailing company, Greenalls had to introduce systems that would help it compete and grow in a sector that was set to become fiercely fought over by the new companies that had appeared after the MMC ruling resulted in 20,000 pubs being released on the market.
Kowalski, who took over the finance role at Greenalls in 1990 following a career that included a stint at the swanky London department store Harvey Nichols and high street menswear firm Burton's, decided he had to bring in systems cheaply and quickly to give the company the sort of management information it needed to manage its pub network, which was growing rapidly through acquisition.
Six years on, PC-based electronic point of sale (EPOS), decision-support and personnel software has sidelined Greenalls old AS/400, which continues to run the company's core financial ledgers. It used to be the company's only system, with all data from the pubs coming in on paper and having to be keyed in.
Things are very different now. Kowalski explains: "Other than managers pressing a few buttons in the pubs, all the sales, human resources and stock data goes from the pubs to head office systems without anyone touching it. This is the degree to which we have moved." All the AS/400 has neededis a few upgrades to cope with the number of pubs - now standing at nearly 1,000 company-owned and 1,300 franchised. The Greenalls group also owns 180 pub/restaurants, 500 off-licences and 30 five-star hotels. Despite his enthusiasm for PC-technology, Kowalski has a certain respect for the trusty AS/400. "This has not been an AS/400-bashing session, the machine has done a good job for us. It is a robust calculator. We've just added the sexy stuff around it."
The heart of Greenalls' system is its EPOS software, which began rolling out six weeks after the company became a dedicated retailer. Supplied by Crown Management Systems and running above Novell NetWare on one of Greenalls' four Compaq rack-mounted servers, the EPOS system provides the raw data for the rest of the company's systems.
Greenalls, which now has EPOS tills in all company-owned sites, is moving towards a culture where its tenanted sites are more like modern retail franchises, where the franchisee has a close relationship with the main company, and as such uses modern EPOS systems so data can be shared more easily.
But Kowalski claims there is a psychological barrier to be overcome first.
"There was a franchised pub where we put a u6,000 EPOS system in for them.
I popped in there for a pint and the manager didn't even use the till, he just threw the money in the drawer - he was using the EPOS system as a shoe-box. He said: 'The brewery's got links into the system and they'll find out what I'm selling.' That's the reality of what we are dealing with. It's changing, but slowly. Landlords who have been around for 30 years will never change."
Kowalski, an accountant and business manager, has developed the rest of the company's systems through an unusually close relationship with a single supplier. Greenalls Inns has no IT director; instead Kowalski assumes this role, and depends on Birmingham-based systems integrator and reseller Key Information Systems, run by Gavin Keeley who spends three days a week at Greenalls, to lead its technical strategy.
Kowalski says: "Keeley's become our technical evangelist. He's helped steer the strategy." Kowalski has reaped the benefits of using an independent systems integrator which is small enough for him to exert considerable customer influence over, yet at the same time gain technical advantage from a dynamic supplier. Despite Keeley's central position, he claims Greenalls' users and 10 IT staff are closely involved with developments.
He says: "While we dictate absolutely the technology environment, our users develop the new applications. We have aimed to provide an open-mined technology environment in which the user community can express itself."
Keeley has assisted in the development of Greenalls' management information systems. The first phase, called Mona, was developed in 10 weeks in 1993 on Oracle Express and allowed directors easy access to the company's performance figures. Since then he has developed Rita, which is based on Microsoft Access and gives directors and senior managers the ability to drill-down to data on the performance of individual pubs and local price information; and Jewel, also based on Access, which gives area managers their own view of the company's performance, focusing on their information needs.
Keeley was also involved in the construction of a "data mart", a 1.5Gb data warehouse where sales and product data is archived on a Microsoft SQL Server database. Based on an Oracle reporting tool called Sales Analyser, the application was used during the recent BSE scares to view the effect on food sales. The latest scare was found to have reduced sales of beef dishes served in pubs by up to 25% within weeks of the first media reports, allowing Greenalls to take appropriate action. Retailers are classic beneficiaries of data warehouse techniques and Kowalski claims Greenalls has gained such benefits at low cost by being careful about what data is archived, therefore allowing the use of high-power PCs to build a system that has previously only been associated with hefty and expensive mid-range, mainframe or massively-parallel processing (MPP) hardware.
PC technology has enabled Greenalls to improve its performance as a retailer, and an office move in May this year allowed the Warrington, Cheshire-based company to reinforce its PC infrastructure. The company's new headquarters, which is in fact Greenalls' 125-year-old brewery building converted into offices (pictured above), has been fitted with a 3Com ATM backbone network, with 155Mb between the servers and ethernet LANs, running at 10Mbs to PCs. In the place where one would expect a mainframe stand four rack-mounted Compaq Proliant 5000 servers - claimed to be the first in Europe - fitted with twin Pentium Pro 200MHz processors and 200Mb of RAM each. These servers, three of which run Microsoft NT and one Novell NetWare, are responsible for application serving and providing file and print services to the company's 250 head office PC users. Greenalls IT infrastructure, which included a move to PC-based tills, has enabled it to embrace new initiatives that are set to alter the face of retailing.
Kowalski is ready to embrace the Internet as a cheaper way for pubs to communicate with head office - he has already formulated a plan for servers in pubs to run Email between pub staff and head office - and he's keen to begin introducing intranet techniques. He says: "We believe the intranet idea is going to be a big thing, especially in terms of remote access for our mobile users and pubs. Everyone will be able to see their applications through a browser and all the applications will be on a server."
One thing Greenalls is doing right now is introducing a loyalty card scheme. Pioneered by petrol retailers and recently adopted by the big supermarket chains, Greenalls is bringing in its own loyalty card to reward its regulars. Kowalski said: "We gave a card to a guy in the Albion pub in Widnes. He was just a regular who sat in the corner of the pub. After monitoring him during the six-month trial we found he'd spent u4,000.
That meant we were looking at a guy who was going to spend #70,000 in his lifetime. We told the manager to give this guy a free drink and tell him he could sit where he likes. The manager had no idea what a good customer he was."
The loyalty card scheme, which allows customers to collect one point per pint and then exchange 100 points for a #5 voucher, is now being rolled out to 50 pubs. Initially, the magnetic loyalty card will be swiped using separate hardware from the in-pub EPOS systems, but it will eventually be integrated when Kowalski is sure the system will not disrupt the business-critical EPOS software. Kowalski claims PCs have allowed him to create a "corporate data model" that allows a relatively large retailer to adapt to change rapidly.
He concludes: "We can take a single view of a pub and analyse the personnel data, the financial data and all the marketing and property details. This is all the information you need about any pub."
The most talked-about trend in retailing is the move towards selling over the Internet. Many saw on-line sales through Web pages as a massive new market and top UK retailers have embraced the idea and have begun selling over the Net for the past two years.
Great Universal Stores, which launched its Shoppers Universe site 18 months ago, claimed it was inundated with orders within the first few weeks of accepting Web-based business. But recent reports from supermarket giant Sainsbury, which claims to have taken only #1,000 worth of orders since January from its site selling wine, chocolates and flowers, and the BarclaySquare on-line shopping mall, for which takings have been less than #10,000 since it began trading 18 months ago, reveal that so far Internet retailing has failed to take off in the UK.
Gary Bulmer, a divisional director of electronic commerce systems vendor Parallax Group, said the potential of the Internet, which he describes as the "ability to deal with 30 million customers from even the most limited floor space" is attractive to all retailers, but is still unpredictable.
"The trouble is, it isn't that simple. This trading model does not work if customers can't find you, if they don't trust Internet trading, if they want to handle goods before buying or simply think that your on-line shop looks cheap and of poor quality. On the other hand, you may get 100,000 orders in your first week and struggle to cope," he added.
Bulmer believes the way to successful Internet retailing is to be very targeted, like Leamington Spa-based luxury chocolate company Sweet Seductions, which had its site built by Parallax. He said: "Sweet Seductions is operating in a niche market, selling luxury goods with a worldwide appeal. Most other Internet retailers are experimenting with new technology or making a fashion statement with a Web address on their TV adverts. Retailers making money on the Net have targeted well-defined and well-understood groups of potential customers."
Retailing is a fiercely competitive market, so many companies are investing in new applications of IT to gain a competitive advantage. One such application is the loyalty card - a concept proven by petrol retailers and now widely adopted by the big supermarket chains. Now the customer loyalty card is firmly established, retailers are looking to other ideas to boost sales.
Japanese hardware maker Fujitsu claims that in the next few months consumers will be discovering large flat-screen multimedia displays in supermarkets all over the country, thanks to a deal struck by Fujitsu to sell its Plasmavision screens to one of the top chains. The 21in screen is only eight centimetres thick - saving shop space - and can be used as a television or an information display for promotions or as an interactive kiosk linked to a PC. Fujitsu added the screen can be mounted on a slim floor-standing unit with a touch-screen surface, so customers can interact with promotions. The company said: "The screens are full-size, bright, colourful and attractive, and are thus more likely to generate a response than static posters." High street retailer Woolworth is using laptop PC technology to improve the design of its stores. Shop planners are using high-power PCs running Microsoft Windows NT Workstation and Bentley Autocad computer-aided design (CAD) software to create better in-store designs on-site.
Woolworth's procurement and installation manager Alan Peck said: "Previously, our regional store planners had to transfer manual notes from store visits onto the office PC. Now they can make the necessary amendments while on-site, and visualise and implement new design features." Allders International, the 82-store duty-free division of the Allders Group, is reaping the benefits of data warehousing. The company is using a network of PCs running a reporting tool from Business Objects to interrogate a Unix-based Red Brick database. Allders business systems manager David stone said: "In the first month of the trial alone, we were able to recoup over #60,000 of our investment in hard cash savings. We expect the project to pay for itself within four to five months of operation."
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