Using the following excerpt, how is technol-ogy helping Staples achieve a competitive advantage?
STAPLES KIOSKS CONNECT CUSTOMERS AND MERCHANDISE
Customer service drives Paul Gaffney’s commit-ment to integration. And profits show that com-mitment matters.
“Our most profitable customers are those who use the full range of the way we do busi-ness,” says Gaffney, the CIO at Staples in Framingham, Mass. He adds that customers
“want to get a very consistent and seamless experience. When you do the right thing for your best customers, good things happen.”
The CIO of the office-supplies giant stresses that for those good things to happen, it’s essen-tial to have an overarching strategy that uses IT to advance the company’s mission. Gaffney adds that “trying to be more holistic in our out-look is one of the things that separates great IT organizations from the rest of the pack.”
One of the products of Gaffney’s enter-prisewide focus on the customer is the online kiosk, dubbed Access Point, that is installed in all of the company’s 1,040 U.S. stores. Creating the kiosks required connecting the company’s e-commerce website, Staples.com, with its point-of-sale (POS) system, order management sys-tem, distribution system and supply chain. On the people front, staffers from the retail, catalog, online, finance, distribution, merchandising and training areas, practically everyone but the cafe-teria chefs, collaborated. For example, the kiosks offer customers the option of buying, say, an office chair at the kiosk using a credit card, then taking a bar-code printed receipt up front to the register to pay in real-time. Customers can also use the kiosks to access a library of infor-mation about products and services, view an inventory of 45,000 online products, and build PCs to order (eliminating the need for more than 35 percent of stores to carry computers). “We’re letting customers do business the way they want to do business, not the way we want them to,”
says Gaffney.
But the benefits don’t go solely to cus-tomers. For Staples, the multimillion-dollar Access Point project has introduced many cus-tomers to Staples.com. The company estimates that a customer who shops in both stores and one other channel (Staples.com or catalog) has a lifetime value of two and a half times that of a store-only shopper.
And the company’s approach toward inte-gration goes beyond customer-facing systems.
Another major integration project involved consolidating the Staples and Quill fulfillment center facilities. Staples acquired Quill, a mail-order office products company, in 1998. To connect the two disparate order management systems, Staples could have gone the point-to-point route, which would have required building customized connections between the two sets of applications. But the Staples team chose instead to implement an integration layer built on IBM’s MQ series. “That way, if we had a future acquisi-tion, or needed more volume in the future, we won’t have to do a new point-to-point integra-tion project,” says Gaffney.
Reducing the number of direct linkages between systems is one part of Gaffney’s holistic strategy. Standardization is another. “Every IS organization is trying to deliver more business results for less money. One tool is reducing the number of different technologies that you need your staff to be proficient in. If you have four or five [technology] approaches, you’ve diluted your staff’s proficiency. I think it’s a productivity imperative,” Gaffney says.
Staples is just starting to look hard at how it can standardize, but Gaffney pointedly says that Web services will play a key role. Because of that, Gaffney doesn’t feel a need to standardize his platform on either Sun’s Java 2 Platform Enterprise Edition (J2EE) or Microsoft’s .Net, since Web services can work with both. “We believe it’s more important to focus on good semantics, for example, getting the definition of the interface right on our next generation inter-nal pricing service, than to get hung up on whether it’s a J2EE or Microsoft deployment,”
he says.
To ensure that his IS organization continues to maintain a big- picture integration strategy, Gaffney has appointed a team, led by two vice presidents in IS but involving people from all business areas, to help Staples get a detailed look at its business processes. They also want to deter-mine how people and technologies map against those processes (for example, to see if there are multiple groups of people using multiple tech-nologies, all to produce a sales forecast). They can then use the information they uncover to
move ahead on the integration projects that will have the most business impact.
SOURCE: Datz, Todd, “Strategic Alignment; Your business processes can’t enable superior customer service or an efficient supply chain without inte-grated systems. The four companies profiled here demonstrate the benefits of a strategic perspective and long-term commitment to integration.” CIO, Aug 15, 2002, p. 1–64.
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