annual report 2009
Brent Curry
Foschinidata
POSITIONING
Foschinidata is the group’s in-house information and communication technology (ICT) division. It uses a combination of fully integrated third party solutions and software developed in-house to provide a modern and efficient base for all the group’s ITC needs. Its goal is to achieve full alignment of the group’s ITC systems and operations with the group’s strategic business objectives.
The Foschinidata division employed 189 permanent and 17 contract staff members at the year-end, deployed in the management and operation of ICT infrastructure and software with a book value of approximately R150 million, representing an initial capital investment for these items of R420 million.
DEVELOPMENTS IN THE PAST YEAR
In the past year significant progress was made in delivering new functionality to the group’s divisions and in bringing about cost efficiencies. Both achievements came about through the introduction of leading-edge technologies and enhancements to the architecture of current systems and infrastructure.
The long-standing shortage of specialised ICT personnel within South Africa has eased somewhat, chiefly as a consequence of the global economic recession and the laying off of personnel by many businesses abroad and to some extent locally. This has allowed Foschinidata to recruit and engage key personnel locally and abroad and hence to strengthen its capabilities. An example is the successful recruitment of five senior staff members as the result of a visit to the UK by a Foschinidata and Human Resources division recruiting team.
In a drive to reduce costs, the division has renegotiated several existing long-term contracts with ICT service providers and consultants. As a result, some future costs have been successfully forestalled.
The group’s capital investment in ICT during the past year amounted to R81 million. Operating expenses totalled R192,9 million, representing 2,4% of sales. These expenditures reflect the importance of the ICT function within a modern and dynamic retail company, with the figure of 2,4% of sales being well within international norms.
The breakdown of the operating cost is illustrated in the pie chart below:
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Key initiatives undertaken during the past year included the following:
- successful implementation of an upgrade of the merchandise and planning systems in the @home division;
- good progress in the delivery and roll-out of a new electronic time and attendance system for the group’s stores;
- implementation of an electronic funds transfer (EFT) system which is integrated at store level with the group’s point of sale (POS) system and is fully EMV-compliant;
- implementation on the group’s networks of an advanced security and intrusion prevention system;
- commencement of a business user data mining and business intelligence (BI) initiative which will provide a central archive of business data for analysis and interrogation at different levels by the use of opensource tools; and
- research, development and show-casing of various store technologies in the group’s ‘store of the near future,’ a concept store located in the group’s head office.
INITIATIVES FOR 2010
The point has been reached where a clear and comprehensive ICT strategy for the group is in place, aligned with the group’s vision and its business requirements. Adopting the themes of consolidation, optimisation and standardisation, the key initiatives for the division in the 2010 year include:
- completion of the roll-out of the EFT system in the group’s stores,
- completion of the group’s electronic time and attendance system in the stores and at the call centre located at the head office;
- implementation of a standard warehouse management system, known as Manhattan Associates WMS, at the group’s distribution centres, commencing with the Markham and exact! distribution centres;
- upgrading of the group’s data storage and data backup technologies;
- continuation of the business intelligence (BI) initiative with a focus on the delivery requirements arising from the group’s supply chain project;
- continuation of a server consolidation and virtualisation program designed to improve operational efficiencies, reduce infrastructure costs, and reduce the carbon footprint of the ICT infrastructure so that it is aligned with the group’s ‘green environment’ initiative;
- developing and enhancing various credit systems to cater for new financial products and customer relationship management (CRM) initiatives;
- roll-out of a fully mobile IT solution for the group’s field management; and
- implementation of a new gift card solution across all trading divisions.
Foschinidata continues to place high priority on IT governance, and in this connection conducts regular disaster recovery exercises. The division endorses the IT infrastructure library (ITIL) framework for best practices for ICT service delivery as well as the Cobit model for ICT governance.
