Farmers' Trading Company (FTC), the New Zealand department store chain, has virtually retired its old IBM mainframe after a three year system upgrade and consolidation.
The company, in conjunction with IBM Global Services, implemented SAP to consolidate systems and cut through legacy environments. The mainframe is still operational but in a switching role only and is no longer used to support key business processes.
Peter Burggraaff, IT manager, said a program to transform and modernise FTC's IT infrastructure has allowed the company to achieve its goal of cutting costs while innovating and exploiting new IT opportunities along the way.
IT will also enable IT supply to be matched with demand through the implementation of virtualisation.
Total operating IT spending, as a result of the change program, has now been brought within 0.8 percent and 1.2 percent of revenue, a range Burggraaf said is the benchmark for the retailing industry according to international reports he has studied.
He said in 2003, when the transformation project began, IT was disconnected from the business and the building of IT systems was happening in both the IT team and within the business. In-house customisation costs were large and there were multiple technologies and development environments.
Then there were many information silos, mainly running on FTC's IBM mainframe. The systems, some up to 15 years old, had very high support costs and were difficult to integrate.
The changes also delivered improved supply chain and customer service performance in multiple channels such as self-service kiosks and online. Service oriented architectures will be used to extend the system even further as opportunities arise.
One such, already in place, is the ability to generate customer sales orders from a single browser interface. Previously this required access to multiple screens.
Burggraaff said the program will also enable IT supply to be matched with demand through the implementation of virtualisation.