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Close on heels of Reliance announcing
an investment of Rs.1,000 crore ($ 255 million) on technology,
comes the news of the Kishore Biyani owned Future Group
outsourcing its information technology infrastructure
to Cisco and IBM, reports www.indiaretailbiz.com. This
would entail an outlay, over the next three years, of
Rs. 400 crore. The group has already spent Rs. 100 crore
on IT.
Apart from ensuring critical flow of information,
technology plays a vital role in smooth and efficient
management of any retail chain. Technology, can be considered
as the most important ingredient in the success and
growth of any retail chain in the world.
The Future Group, in the face of imminent competition
from the likes of Wal-Mart Bharti, Reliance, More (Birla)
and Infiniti-Trent (Tata), has been compelled to accelerate
its expansion plans.
In order to obtain the best technology
available any where in the world, the Future group has
decided to award IT contracts to a consortium of technology
companies, like IBM, Cisco to develop and deploy all
software applications including ERP and supply chain
management, including making the work place wireless
communicable.
Apart from suitable hardware including
networking and communication equipment, Reliance is
likely to deploy SAP to run the business and Retalix
to manage 'point of sale' terminals. It is reported
to have lined up a number of consultants, technology
providers and systems integrators like IBM, TCS, Satyam,
Cap Gemini, Ernst and Young, Technopak.
Reliance expects to create competitive
advantage for its retail business through this initiative.
Apart from gathering robust information on sales, by
keeping a tight leash on movement and management of
inventories, Reliance hopes to achieve economies of
scale across hundreds of retail stores. As bulk of modern
retailing revolves around high volumes with low margins,
especially for fruits and vegetables which also happen
to be highly perishable, tight control on inventories
assumes critical importance in improving profits.
World over, technology has played huge
role in the success of modern retailing which calls
for cost effective and efficient management of supply
chain and consumers. Retailers like Wal-Mart, Tesco,
Carrefour are known to be spending big bucks on technology,
infrastructure and management. Their expenditure on
technology could go up to 2% of investment. Tesco, in
fact, has even set up a technology development center
in India.
Source: www.indiaretailbiz.com
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