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Finance

Myer's IT investments beginning to pay off

Myer is nearing completion of its planned investment in information technology under its 3.5-year turnaround program, with benefits beginning to roll in.
Written by Suzanne Tindal, Contributor

Myer is nearing completion of its planned investment in information technology under its 3.5-year turnaround program, with benefits beginning to roll in.

Myer support centre

Myer's new central office
(Myer and ANZ HQs Melbourne Docklands image by Tony Bryer, CC2.0)

Since 2006, Myer claims to have spent almost $200 million in capital investment on information technology. Now that investment is starting to pay off, according to the company's half-year financials to 21 January 2010. Despite logging an increase in salaries, the retailer said it had managed to cut the cost of doing business by around 1.5 per cent, partly due to its new information technology platforms.

The company's new merchandising system MyMerch replaced 44 separate systems and cost $95 million (mainly paid for by the company's former owner Coles) and is now "well embedded" in the business, according to Myer's results.

The system allows Myer's distribution centre to order goods from suppliers based on daily, as opposed to weekly, stock on-hand data.

It has been said that the system allows the company to reduce the required storage space for inventory, giving stores more selling space.

Further planned improvements include a new system to manage in-store ticketing of merchandise as well as a new system to improve the management of the product development cycle for Myer-exclusive brands.

However, what appears to be the jewel in the crown is a new point-of-sale system designed, built and tested specifically for Myer. The roll-out of the system, which will replace one that is over 20 years old, is scheduled to start in the middle of this year and finish by December.

The estimated cost of this project is $90 million, and its purpose is to provide real-time information on markdown, customer lay-bys and stock position.

"The implementation of [a new point-of-sale system] into our company will bring significant change in technology to our stores, as well as greater efficiency, speed and ease of transaction processing," Myer IT director Tim Clark said in the results presentation. "The central loading of promotional activities will significantly reduce manual processes making it much easier for store team members and customers."

The company has also pushed ahead with the roll-out of its closed circuit television system, which is scheduled to be completed by the middle of this year.

It is expected that the company's IT team will move with the rest of Myer's support office to new "state-of-the-art" digs in Melbourne's Docklands over the next month or two.

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