Less Noise = Greater Efficiency

Kristen Blum was presented with a specific set of goals – and challenges – when she joined Abercrombie & Fitch as CIO in the spring of 2006.

With the brand growing by leaps and bounds, and merchants in need of more precise data to support emerging strategies and long-term growth initiatives, Blum was charged with overhauling the IT systems of the New Albany, Ohio-based specialty retailer. That’s never a simple task, but the fact that A&F was operating on COBOL applications running on mainframes puts the enormity of the challenge in perspective.

Blum chose Oracle as A&F’s primary IT partner, then set her sights on addressing several key objectives: greater speed to market; maintaining and growing industry-leading margins; retiring legacy applications; reducing the labor and maintenance costs linked to existing systems; providing one version of the truth; and preparing the IT foundation for an accelerated international rollout scheduled for 2010 and 2011.

The first outward sign of A&F’s IT transformation became evident with the launch of a new data center in 2007. Since then, the retailer has deployed a virtualized, centralized POS application and – refusing to be deterred by the sputtering economy – spent the better part of 2009 immersed in a two-phase rollout of Oracle’s Retail Merchandising System.

Blum, now senior vice president and CIO, characterizes 2009 as a “transition year”: The company reduced new store openings and focused on cost structure and efficiencies in the face of sales that declined 18 percent year-over-year. Nonetheless, she reports that the company remains focused on future growth, with a keen emphasis on international expansion.

A&F’s IT transformation has been under way for three years. What have been the major highlights?
There have certainly been many highlights along the way. One would be the Retail Merchandising System (RMS) from Oracle, which we rolled out in two phases. Phase 1 of RMS went live in April 2009. It encompasses purchase order functionality and all the master data surrounding the merchandise and the vendors.

Phase 2 went live in August 2009. It comprises all of the financial components – price management, sales audit, stock ledger – and all remaining components of the merchandising system. We’re now completely live using all of the RMS functionality and everything is going well.

Another success for us has been our IPOS [International Point of Sale] project. We did a pilot with a few stores in fall 2008 in preparation for international locations last year. Our first international store was our London A&F flagship. We opened the store on our legacy POS system; although this legacy system worked for the U.K., it was not an option for us as we headed into countries that required double-byte character sets. All international locations and new domestic ones that have opened in the past year are on iPOS. This year we will be retrofitting the remaining domestic stores to iPOS.

A third highlight for us is the release of our business intelligence solution for the company. It was a big challenge, but a big win as well. We’re moving away from complete paper-based reporting to analytic-driven reporting wherever possible. This allows our business to drill down into the data and take advantage of dashboarding capabilities. The front end of our BI solution is Oracle, the data warehouse is Netezza, with IBM’s ETL tool.