I’m at a CIO Innovations session. Randy G. Burdick, EVP and CIO of OfficeMax, is going to present on real-time retail. As a former retailer, who introduced real-time, event-driven architecture to the organization, I’m extremely interested to learn what OfficeMax has done. According to the session abstract, OfficeMax’s “2-second advantage” story involves inventory levels, fulfillment processes, shipping, customer notification and customer loyalty.
OfficeMax is the combined entities of OfficeMax retail and Boise Cascade Office Supplies business. Burdick opened with some background on OfficeMax and the challenges of the current retail environment. These include declining sales & margins, changes in shopping habits (cross channel engagement, social media, Red Laser on the iPhone, etc) and green initiatives.
OfficeMax challenges in 2005, when Burdick joined the organization, included supply chain efficiencies, cross-channel customer behavior and interactions, lack of real-time information, compliance and risk management (PCI, fraud, confidential data), revenue growth and margin enhancement. And of course, the spaghetti IT diagram slide.
IT Approach to these challenges:
- Educate and upgrade IT staff
- Establish and Mature an SOA Practice
- Establish business investment practices – strategic use of IT
The SOA slide, Tibco bus in the middle, ties core systems, customer systems, reporting etc.
Establishing the SOA Practice: Strategies for versioning, testing, monitoring, service design, security, deployment, performance tuning, capacity planning, backup and recovery. Frameworks for testing, business metrics, error handling, deployment. Processes: estimating, repository, service definition, etc. People: training, offshore partnering and more…
Burdick said Tibco was ESB #2. First attempt, prior to his tenure, was purely integration based. [Resource vs. Business-driven] This was failure.
Architecture included business events and business process management. EP examples: store sales, distributing item information.
Key: Prioritize by Business Value, not IT Value
Benefits: Accelerate development timeline, improved availability and performance, reduced costs, enabled business capabilities that in the past were cost prohibitive, real-time business metrics for any information flowing through Tibco, project teams now see value of bus, ask to use it.
Beyond the Basics
- Order out of stock items from POS
- Predictive monitoring of core business processes – order fulfillment
- Real-time analysis of business transactions – product affinity, hot sellers, proactive inventory response, price error check
- Cross Channel analysis
In closing, “Be Prepared – You get one chance”.
Audience Q&A
1. What Products? Just the service bus. [Not sure how that ties to BPM, then. Definitely can do simple EDA with just a bus.]
2. What were the major changes to people and process? Started in IT. Established architecture. Brought in outside people to form a core team. Started with central team, throttled back demand, tested concepts, established frameworks.
After 18 months, opened practice to other projects. Had innovation and reuse rewards. Lastly, frameworks on automated testing, repositories really allowed momentum gain. Now, SOA has taken off organically. Two to three year process to get people (IT) excited about SOA and value.
3. Business value? Business responsiveness is the big driver, more so than cost savings.
Comments