The IT manager of Dick Smith says he is replacing legacy systems by stealth as the consumer electronics retailer navigates a business turnaround.
“The business is rapidly growing, rapidly changing, and we need to be able to adapt to that very quickly,” Paul Keen, general manager of IT for Dick Smith, said at a lunch hosted by integration vendor MuleSoft.
The turnaround has been quick for Dick Smith. Two years ago, Woolworths sold a flagging Dick Smith business for $20 million. A year later, Dick Smith surfaced in an initial public offering on the stock exchange valued at $550 million.
Today, Dick Smith is opening one new retail location every week. It now has 376 stores, up from 323 locations in FY 2013. In addition, the retailer has partnered with David Jones, selling consumer electronics in the clothing store, and opened concept stores called Move.
The fast growth has required an IT overhaul, said Keen.
Woolworths did not invest enough money in IT at Dick Smith and allowed legacy infrastructure to fester when it was the owner, he said.
When Keen joined Dick Smith in November last year, he found an IT environment that relied on an AS/400, a green-screened platform introduced by IBM in 1988. Dick Smith also used an antiquated Delphi point of sale (POS) system, he said.
The tried-and-tested AS/400 still worked, but Keen said he did not believe it could support Dick Smith’s aggressive growth strategy. In particular, he said it was lacking in forecasting capability and sheer number crunching.
Rather than ripping it out all at once, Dick Smith has been conducting a staged process of replicating the AS/400 data in Amazon cloud, said Keen. Dick Smith has already migrated payroll and is in the process of moving reporting to Amazon Redshift, he said. The retailer has used MuleSoft integration software to manage the data migration.
“Slowly but surely, everything is moving for us into the Amazon cloud,” he said. Keen said the goal is that in several years, there won’t be a need to keep the AS/400 any longer.
“It will take years. It will be a natural evolution. At some point, we’re going to [say], ‘You know what? We’re just not using any of this AS/400.'"
The migration will eventually help Dick Smith deploy mobile point-of-sale systems, Keen said. The retailer plans to use an API layer in MuleSoft to talk to the POS system and all the other systems, he said. Once that’s in later this year, it will be possible to bring in new POS devices, he said.
Also at the lunch, Keen shared his strategy for speaking to the CEO about buying new gear and dealing with conflicting demands from the CIO and CMO.
Read more: Dick Smith earnings up four per cent
“It’s really hard to sell a service bus into the CEO,” he said. “Just watching his eyes glaze over is fun to watch. Other than that, it’s really hard.”
“What we do is we sell the capability, and the capability is that we can integrate really, really fast. He understands that’s an issue.”
Keen said he’s seen a “two-speed IT” resulting from conflicting requirements of the CIO and CMO.
The IT department has to make sure financials are corrects, audits have been passed and all necessary governance is in place, he said. “And then you’ve got your second speed of IT, where the marketing department wants to drive a campaign really, really quickly.”
The MuleSoft software has allowed IT to respond quickly to the needs of marketing, Keen said. “We’re not trying to impede the marketing department. We’re trying to allow them to grow revenue.”
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