Harvey Norman has finally kicked off an information technology transformation program to replace all of its core business systems over the next five years, but has again made it clear there are no immediate plans to embrace online retailing. Project Reload, expected to cost in excess of $50 million, was originally expected to start early last year but was shelved because of uncertainty created by the global financial crisis.
Harvey Norman has now finished training IT and business staff to work on the project's first stage, which will focus on replacing merchandising and supply-chain management systems in 245 stores across Australia, New Zealand, Ireland and Northern Ireland over the next three years.
This will replace homegrown and other legacy systems that, chief operating officer John Slack-Smith told the recent CeBIT conference in Sydney, had served the company well during "a period of underinvestment" in technology.
The retailer is expected to spend most of this year designing and building a solution based on technology from German software maker SAP. This includes business intelligence technology designed to make better use of the huge amounts of customer data it collects. US-based retail technology specialist Ciber has been appointed systems integrator for the SAP project, beating off competition from Fujitsu and IBM.
Once that work is completed, attention will turn to replacing financial, point-of-sale and other business systems to enable a multi-channel sales strategy that embraces online sales.
Company chairman and major shareholder Gerry Harvey has historically been a vocal critic of technology investment, especially when fielding questions about plans to take the business online.
The lack of an online strategy has been a concern for investors in the face of web-based competitors with lower overheads and higher profit margins.
Slack-Smith cited national broadband network research that estimated more than half of Australians research products online once a week and will make a purchase every month.
But he says online retail will not be a focus for the company until it had worked through the business transformation program.
"Today we have next to nothing in the way of revenues that we drive from online technologies," Slack-Smith said. "Over the course of the next three years, on the basis that change will never occur as quickly as people will have you believe, we won't see much change in regard to that."
Slack-Smith says consumers are better informed thanks to the internet, which is challenging for retailers and had been a factor in Harvey Norman's decision to invest in improving systems and processes. MIS Australia
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