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TI:  When fortune smiles: few companies have the good fortune of being thrust into the spotlight with the whole world watching. That's what happened to Roots Canada
AU:  Carey-David
PN:  CIO-Canada
SO:  CIO Canada, v.6(12) D'98 pg 38-40+.
Illustrations
FA:  Fulltext: 2031 words
CI:  Roots-Canada-Ltd
CZ:  Roots Canada Ltd
PT:  Most-Recent-Update; Journal-article
SF:  Illustrations
PD:  981200  
PY:  1998
AN:  4457102
LN:  LONG
FT:  Few companies have the good fortune of being thrust into the spotlight with
the whole world watching. That's what happened to Roots Canada. By
fashioning a new IT environment for itself-from its manufacturing plants
to its retail outlets - the company is making sure it won't fall victim to
its own success

When the world's best amateur athletes paraded by during the opening
ceremonies of this year's Winter Olympics in Nagano, Japan, the undoubted
gold medal winner in the clothing competition was the Canadian team,
strikingly outfitted by Roots Canada.

Due to that Olympian performance, Roots literally became an overnight
sensation, with demand for its products pouring in from around the globe.
Things haven't changed much since for the Toronto-based firm, which began
life as a counterculture shoe store in 1973. Aggressively pursuing
opportunities in such far-flung places as the Pacific Rim, the UK and
Greece, Roots now has over 130 stores worldwide selling everything from
branded sportswear, to leather goods, to infants' and children's clothes.
In fact only last month, in a departure from its traditional operations,
Roots opened its first home store, offering products such as bedding,
furniture and dishes designed in keeping with the company's stylish but
casual `lifestyle' image.

With the rapid growth Roots is experiencing, it's not surprising that the
company has had its hands full in keeping up with both the manufacturing
and retail sides of its business. Just ask Darlene Goren, Director of
Corporate Operations & Technology. She's the one responsible for putting
the technology in place to keep operations running smoothly and facilitate
more efficient business processes.

Goren cut here teeth in retail IT with the likes of Dylex (Braemar, Tip Top
Tailors, Fairweather) and ETAC Group (Ports International, Tabi, Alfred
Sung). She's worked with so many retail divisions running different
vendors' applications that she is intimately familiar with most of the
retail packages on the market, experience which proved quite useful when
she joined Roots a year and a half ago

SHOPPING FOR NEW TECHNOLOGY

At the time, Roots was so lagging in its IT capabilities that a lot of
things were still being done manually. It's retail systems weren't capable
of meeting the needs of the fast-growing firm and there were many problems
supporting store operations. In fact the processing capability of the
store legacy system was so poor that things weren't back up and running on
Monday mornings. On the manufacturing side, the company was hamstrung by
IT systems that were functionally inadequate and lacking in their ability
to communicate with the company's retail and financial systems.

``We sat down and looked at our technology and where we wanted to go as a
company,'' recalls Goren. ``We also looked at the different businesses we
had, because we're not only retailers, we're also manufacturers,
wholesalers, and we licence product as well.''

Of high priority was the need to do a better job of managing the company's
supply chain. Roots manufactures about 80 percent of its products, mostly
in Canada, but it still has the same supply-chain challenges faced by
traditional retailers. Lead times must be properly managed, for example,
and plant manufacturing systems still have to communicate information to
head-office systems.

To get its IT operations back on track, management decided that a major
systems overhaul was needed, one that would not only provide substantial
new functionality but also more seamlessly tie together the retail and
manufacturing sides of the business. The company opted to move from legacy
systems running on an IBM AS400 to a combination of integrated
applications running in a client-server environment.

Goren now put her experience to work. ``There are about ten vendors of
retail systems that are in this league,'' she said. ``When you've been
around for a long time you know who they are and what their capabilities
are, so you can create a short-list right at the outset, based on your
needs and your budget. We started with about six vendors and narrowed it
to four that we did an indepth analysis with.''

TRIALS OF IMPLEMENTING NEW TECHNOLOGY

Several vendors were eliminated because they hadn't rewritten their entire
package for the client-server environment. In the end, readiness proved to
be a key factor, along with technology and functionality.

Readiness, however, is a relative term when it comes to the kind of
technology Roots was shopping for. A few years ago it would simply have
been a matter of buying a legacy system that hundreds of other companies
were up and live on, and which had most of the major bugs worked out of
it. But today's client-server technology is new to everybody, including
the vendors who are selling it.

``The biggest dilemma for us,'' admits Goren, ``is that most of the systems
out there now are not tried and true any more. All you can do is place
your trust in a vendor that's been around and that has built applications
that have worked in the past.''

Even with a trusted vendor, however, it's important that their staff have
implementation experience - that you're not a guinea pig. But Goren
concedes, ``Unfortunately that's something that you have to deal with at
this point in time because vendors often don't have a lot of installs on
the current version you're going up with, so you have no choice but to
learn with them.''

Complicating the problem is the scarceness of qualified staff. Again,
because the technology is new, it's simply not easy to find experienced
people. This applies to both contract project staff and long-term
maintenance and support staff. Add this to the learning curves that
current staff must face in mastering the new technology, and the human
resources side poses a substantial hurdle.

FUNCTIONALITY FOR THE RETAIL SIDE

Notwithstanding these challenges, Roots moved forward with its migration
plans, deciding first to transform the retail side of its business. The
company selected a Windows NT-based point of sale (POS) system for its
stores called Store 21 from DataVantage. In addition to providing the
whole back-office function that a store needs, Store 21 has a variety of
modules that give Roots the functionality it needs to manage its
increasingly complex retail environment.

``For example, if a customer is in one of our stores and we don't have
their size we can locate the item for them,'' said Goren. ``We put our
stores into hunt groups. Stores within Toronto, say, will be able to
search within a group of other stores in the city. The transaction comes
back to the host, which lets the querying store know what store in the
hunt group has the item. We can also do `send sale', which means you can
actually take the sale at store level, capture the customer's shipping
information, charge them the shipping charges, and then mail the item
out.''

Store 21 is loaded with such features. Goren is patiently waiting until
after Christmas to implement the `clientele' capabilities of the system,
which will help Roots build a client loyalty program.

``There are newer approaches to loyalty programs now. In the past you'd
collect the customer name, address, telephone number and some specific
personal information about them so you could send them a birthday card if
you wanted,'' she said. ``We're looking at different ways we might build
our loyalty program. We think we'd like to reward people for being
frequent buyers, or buying a certain dollar amount at Roots. And we want
to be able to communicate with our good customers - let them know about
mailings. But this is something you don't rush into. You want to make sure
that when you launch it you've thought it all out.''

One thing is certain about the loyalty program, it will tie in with Roots'
Web site, which will be converting to an electronic commerce model in the
coming year. The site will have a virtual store for visitors to shop in,
and purchases made electronically will be credited towards the loyalty
program, just as if they had been made at a regular store.

TYING IN THE MANUFACTURING SIDE

Store 21 was rolled out in August. A new retail switch at head office now
polls all the POS information from the stores and will be populating it
into a new merchandising module, part of Richter Systems' Supply Chain
Cooperative Enterprise Suite. This is the second key piece of Roots'
supply chain puzzle. With an eye to the future, Roots saw the value of a
suite of applications that will eventually enable it to integrate the
manufacturing and wholesale side of its business.

The merchandizing module, which goes live in January, will provide easy
access to information right down to SKU level, which should provide
considerable efficiency from the warehouse right through to the retail
outlet.

``From a distribution standpoint, the biggest hurdle we faced was carton
tracking, or the ability to know what's inside the carton,'' said
Christopher Fang, Senior Lead Analyst with Richter. ``Scanning through bar
codes and using our distribution module, Roots no longer has to confirm
line by line. When the box arrives they just scan in one bar code instead
of each SKU. It speeds up the shipping and receiving process immensely,
both out of the warehouse and at the store. They're getting it there
faster, confirming it at the store level faster, and getting it on the
floor more quickly, giving them a better opportunity to sell the
merchandise at full price.''

Another feature that Darlene Goren likes is the `suggested transfer'
capability, which gives Roots better control over where it places its
merchandise. If something is not selling in a certain store, rather than
marking it down the system will suggest a transfer to a store where those
goods are moving. ``Instead of somebody having to sit there with reams of
paper, doing a store by store analysis, the system will suggest a
transfer, based on rules you build into it in the beginning,'' Goren
explained.

If the suggestion is accepted, it gets downloaded to the store's system,
and the store keys in the transfer in accordance with its inventory at the
time. The response is then communicated to the head- office system, which
triggers the transfer to the receiving store.

``It used to take a lot of analysis and a lot of time on our allocator's
part to do all of that. Now, in a nice loop, we've automated that whole
piece,'' said Goren.

PUTTING IT ALL TOGETHER

With the DataVantage and Richter systems working in tandem, Roots will have
detailed access to information about what's going on in the organization -
what's selling and what's not, what needs to be marked down, what items
aren't being merchandized properly, etc. As more and more of the
functionality residing in the new systems is utilized, Roots will be able
to manage its business - from the manufacturing floor to its retail
outlets - at peak efficiency.

But it won't all be down to the technology itself. Part of this efficiency
will come from changing internal processes. Roots is a very big believer
in looking at its processes and procedures, and making them better.

``As we move over to the new systems we're going to be doing things
differently. We did it when we put the store system in - day one when it
was rolled out we had a whole new set of procedures for the stores. And
day one when Richter goes in there'll be a whole new set of processes and
procedures for head office,'' said Goren. ``I don't think you can put new
systems in and not do that. If you do you're not giving your company the
advantage that this new technology gives you. To me it's not just changing
the technology and the application; it's changing the way you do
business.''

Changing the way you do business has become a corporate imperative for
Roots as it adapts to its burgeoning success. With its supply chain in
fine shape, the company is ready for its next Olympian performance.

David Carey is a veteran journalist specializing in information technology
and IT management. Based in Toronto, he is managing editor of CIO Canada.


FC:  Copyright 2000. All rights reserved by original publisher and copyright
holder.  No part of this data may be reproduced, published, sold, 
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YC:  1999
UD:  990600