MANAGEMENT INFORMATION SYSTEM Report On

Business analysis of pantaloon rETAIL

INTRODUCTION
ABOUT THE COMPANY
Pantaloon group is a large Indian conglomerate with diversified business interest and have been promoted by Kishore Biyani. The company aimed at providing total satisfaction to the customers through wide variety of items, right pricing, pleasurable ambience, excellent service, best quality and convenient visual merchandising. Its business has grown from one store in Kolkata in 1997 occupying an area of 8,000 Sq. ft. to 72stores, apart from our 22 factory outlets located in multiple cities occupying an aggregate area of 21,07,608 Sq. ft. Pantaloon outlets have been positioned as a complete family destination providing value-for-money goods. Each region has regional hub. Under their control is several Distribution Collection Centers. The primary function of these DCC is to distribute the products across the PANTALOON retail stores. They believe that their most valuable assets are their people, young in spirit, adventurous in action, with an average age of 27 years; they are skilled & qualified professionals. Pantaloon has its marketing strategy to stay ahead in the competition. Pantaloon is buying prime areas, instead of taking rentals as rentals are now fifty per cent higher compared to what it used to be. Pantaloons own stores will also stock non-apparel related merchandise such as stationary, pens, gifts and toys for the film. Pantaloon operates in a competitive environment. It was the first to introduce retail departmental store for the entire family through Pantaloon in 1997. Today Pantaloon is the fastest growing retail company in India.

MISSION OF THE ORGANIZATION

Company shares the vision and belief that the customers and stakeholders shall be serving only and executing future scenarios in the consumption space leading to economic development.

ORGANIZATION STRUCTURE
Pantaloons come under Divisional Bureaucracy type of organizations. Decisions are taken centrally as well as locally at the regional level.

IDENTIFICATION OF INFORMATION SYSTEM

Before understanding the Transaction Processing System and Decision Support System of Pantaloon, let us first identify all the Information Systems practiced in a retail firm.

Description

Processes

Related functions
from - Marketing - Accounting technical -Planning construction -HR, Finance

Controls
- Surplus management - Demand

Procurement - Procure wholesalers Information - Providing system Accounting Information System Marketing Information System Production Information System Human Resource Information System

know-how Finance and - Manage Accounts

& -A/C standards -Organization Policy

Stock maintenance Merchandising Selling Customer service Products Manage Demand Get raw material Manage production Recruitment of employees - Training provided - Promotion - Appraisal

Distribution Accounting

- Forecast demands - Customer complaints - Competition - Production has to be as per the specified quality -Planning and Budget -Organizational Policy

HR, Marketing, Distribution Finance HR Finance

Using the above Systems, retail firms like Pantaloon take various important decisions regarding daily transactions and also make strategic decisions like when to make new order, where the marketing needs to be done, how to increase the revenues, etc. Transaction Processing Systems (TPS) and Decision Support System (DSS) are the two important Systems discussed here.

(A) TRANSACTION PROCESSING SYSTEM (TPS)

It estimates number of transactions with indications on mode and medium in an organization and it provides a scope to identify areas of automation in the organization to optimize transaction cost and time.

Transaction Description

Mode of Processes Transactio n

Goal/Purpose

Remarks

Dispatch of Products to Batch/Offline stores

Quality checking products.

of Offline

Sourced Buying from Offline different companies.

Collect demand To collect demand notes Can be notes from city in time automated for stores OLTP environment Quality control Reject products not meeting quality standards Giving orders to To get timely delivery Can be various companies from companies automated online for OLTP environment Prepare schedule store daily Different requirement of Can be for city different products automated online for OLTP environment Receiving Order via Promptly attend the Website order

Inform Regional Centre Offline/batch about the level of mode inventory schedule

Selling of products via Online website

(B) DECISION SUPPORT SYSTEM (DSS)

Pantaloon will have to opt for a Decision Support System which will help them in capturing the customer data and further combine this data with back office applications for the fulfilment of their objectives. This DSS will help them to take decisions pertaining to various aspects like pricing, supply chain management and would further help the organization to be customer centric. It deals with the unstructured problems; a model for decision making is required.

A(B.1) PURCHASE ORDER PROCESSING SYSTEM

Following are the steps by which Purchase order (P.O) Management takes place: Select the type of Purchase Order Select the Quantity Approve the Purchase Order Release the Purchase Order Purchase Order Tracking

Following is the diagrammatical representation of the Purchase Order Process:

1. Select the Product Whose Quantity is less than Reordering Level 2. Place the Purchase Quantity Order 3. Approve the Purchase Order 4. Release of Purchase Order 5. Tracking the Purchase Order
(B.1.1) PURCHASE ORDER PROCESSING
Purchase Orders Reduce data entry and improve cost controls by setting up long-term purchasing agreements with vendors that also help to simplify the ordering process. With blanket purchase orders you can: Set varying required dates for each line item on a purchase order. Select line items for release to vendors each time a purchase order is printed. Use estimated release reports to provide vendors with advanced notification of upcoming orders.

(B.1.2) AUTOMATED PURCHASE ORDER PROCESSES

Reduce the time and effort required to generate and manage purchase orders with flexible, automated processes that enable you to: Set up pre-defined parameters to automatically replenish inventory items or groups of items so customer orders are fulfilled on a timely basis. Map purchase order line numbers to line items, automatically. Generate serial numbers for items upon shipment. Track and update all landed costs associated with an inventory item and automatically assign or modify costs on purchase orders as items are received. Remove or replace line items without special editing actions by simply retyping over the current line.

(B.1.3)FLEXIBLE SHIPPING AND INVOICING OPTIONS

Increase customer satisfaction, reduce unnecessary paperwork, and streamline departmental workflow. With flexible shipping and invoicing options you can:

Record shipments and invoices separately or together. Enable vendors to ship orders directly to the customer by entering Ship to addresses on purchase orders. Assign different Ship to addresses for each line item on a purchase order. In-Transit Inventory Transfers Employees can record the receipt of the material in its final destination utilizing a purchasing in-transit inventory receipt transaction.

(B.1.4) ADVANTAGES OF PURCHASE ORDER SYSTEM

Increase your revenues Develop better relationships with your customers and prospects Retain key personnel Enjoy unlimited access to all of our sample applications Collect data and get feedback on anything, anytime Quickly build reports to analyze all the data collected Never worry about having to write any code, ever

(C) ENTERPRISE RESOURCE PLANNING (ERP) & BUSINESS INTELLIGENCE (BI)

According to Deshpande, the BI solution should be able to address key concerns, such as deftly handling complexities in the retail business, in addition to handling customer intelligence, which also encompasses studying customer-buying patterns. More than eight years after it forayed into the retail business, Pantaloon Retail decided to implement SAP to keep itself competitive in the rapidly growing Indian retail market. Store operations have never been as important to retailers as they are now. Pantaloon was regularly opening stores in the metros and there was an urgent need for a reliable enterprise wide application to help run its business effectively. The basic need was to have a robust transaction management system and an enterprise wide platform to run the operations, says Rakesh Biyani, Director, and Pantaloon. The company was looking for a solution that would bring all of its businesses and processes together. After a comprehensive evaluation of different options and software companies, the management at Pantaloon decided to go in for SAP.

(C.1.1) SOLUTION
Some of the qualities of SAP retail solutions are that it supports product development, which includes ideation, trend analysis, and collaboration with partners in the supply chain; sourcing and procurement, which involves working with manufacturers to fulfill orders according to strategic merchandising plans and optimize cost, quality, and speedvariables that must be weighted differently as business needs, buying plans, and market demand patterns change; managing the supply chain, which involves handling the logistics of moving finished goods from the source into stores and overseeing global trade and procurement requirements; selling goods across a variety of channels to customers, which requires marketing and brand management; managing mark-downs and capturing customer reactions, analysing data, and using it to optimise the next phase of the design process.

(C.1.2) IMPLEMENTATION
The implementation was outsourced to a third party. The implementation was done by the SAP team with help of Novasoft which is based out of Singapore, says Biyani. Some people from Pantaloon also assisted in the project. About 24 qualified people worked on this SAP implementation. SAP was chosen as the outsourcing party on a turnkey basis. This project was headed by Pantaloons Chief Information Technology Officer, Chinar Deshpande.

(C. 1.3) PHASES

SAP implementation is not a single phase process. The project was divided into three phases. The first phase involved blueprinting existing processes and mapping them to the desired state. In this phase, the entire project team worked on current processes within the structure of the organisation, analyzed and drafted them. This blueprint was later used in the formation of new states of the solution. Since the SAP would combine all the processes, each and every one of these had to be evaluated. In the second phase, the SAP platform was developed with the help of Novasofts template which was predefined by SAP after evaluation of Pantaloons needs and expertise in retail solutions. The last phase in this project was for stores to switch over to the new system and for current data to be ported. Before the SAP implementation, all the data was unorganized. This data had to be migrated to the new SAP application. The project was flagged off on 15th June 2005 and took about six months to finish. It went live at the head office on 1st January 2006. The stores went live on SAP from 1st January 2006 to 30th June 2006.

(C.1.4) BENEFITS AND CHALLENGES

The key challenges in this project were not in the implementation. Rather, the difficulties were faced during the data migration and in managing the interim period when the project was underway for about six months. Pantaloon has not been able to see immediate benefits from this implementation. This application certainly has long term benefits which will be seen when the performance of various aspects will be analyzed. It is too early to calculate RoI. We have already started working on MAP (Merchandise Assortment Planning), Auto Replenishment and Purchase Orders. We hope to use these systems to optimize our inventory and cut it by about two to four weeks (depending on the line of business), says Biyani.

(C.1.5) MAINTENANCE & HARDWARE

Apart from performing key retail computing tasks such as Open to Buy (OTB), the solution should also be able to execute functions such as demand forecasting. The vendors being considered for the BI solution are Cognos and SAS, disclosed Deshpande. Detailing the existing IT infrastructure, Deshpande noted, Currently, Retail Enterprise Management (REM) - a distributed POS based solution developed in-house has been deployed at every store. This application is currently being used by around 1,200 employees across the organization. For maintaining this implementation and its related applications, Pantaloon has an in-house team and it has outsourced ABAP resources. They are also in the process of setting up a SAP Competency Centre. The system runs on a HP Superdome server on HP UNIX 11i and the database is from Oracle. The cost of this project was about $10 million. According to Deshpande, the company has already implemented Balanced Scorecard (also developed in-house) for the organizational performance management and plans to migrate it to a high-end solution. The retail major currently operates multiple format stores like Pantaloons - The Family Store, Big Bazaar, The Discount Hypermarket & Food Bazaar, and Food & Grocery Supermarket. The company recently launched in Bangalore, Central Indias first seamless mall chain, spread across 1.5 lakh square feet. In the next three weeks, Central will be launched in Hyderabad, while Pune will witness a December launch. Pantaloon has today evolved as a leading manufacturer-retailer in the country with 13 Pantaloon stores and 9 hypermarkets, 13 Food Bazaars and 1 Central store, all operational across the country.

(C.2.1) BUSINESS INTELLIGENCE (BI)

Every organization generates large amount of data from their day to day operation. From the pool of huge data, some of them are able to harvest useful information; termed as Business Intelligence (BI). Organizations which are able to develop business intelligence as a competitive advantage focus on descriptive analytics and reporting, as well as predictive analytics to take more effective steps towards delivering better performance. Various functions of Business Intelligence technologies are reporting, OLAP, analytics, data mining, business performance management, benchmarking, text mining, and predictive analytics. Below are the current needs of pantaloons retail as a part of their BI Organization Alignment & Strategy Management Financial Analytics for greater ROCE Customer Analytics Trade Marketing Analytics Workforce Analytics Supply Chain Analytics Operations Analytics

(C.2.2) SYSTEM FRAMEWORK OF BI IN PANTALOON RETAIL

The BI System Framework involves establishment and integration of hardware and software components. Hardwares facilitates data possession, storage, access and management. Source system comprises of RFID and barcode reader, handheld scanner, sales force and CRM, visual audits, SAP ERP, human resource management system etc. which capture and store data from daily transactions. ETL layer is responsible for data extraction, cleansing, staging, transformation & loading. Data warehouse stores data to serve different needs in terms of business plan, forecast, market research, outlet sales, Invoices, purchase orders, inventory, transport orders, stock orders, salary advice, redistribution costs , account receivable, account payable, visual audit, production plans and jobs etc. The BI layer does with number crunching applying business logic and generates metrics, regular and ad hock report. Output of this layer feeds performance management system of corporate office. BI supports analytics function of Pantaloon retail. Most basic type of alliances of BI at Pantaloon is called a Quick Response Program (QRP) where retailer provides point of sale (POS) information to warehouse. Supplier may use this for scheduling production and delivery order inventory level. The retailer still submits individual orders and supplier maintain own forecasting system. In a Continuous Replenishment program (CR), supplier delivers at an interval mutually agreed by both the parties. The relationship gradually moves to an on-going relation from a transactional one. Collaborative planning, forecasting and replenishment (CPFR) is a set of best practices which provides a model for trading partners to jointly plan key activities from production to delivery of products and encompasses joint strategic planning, demand & supply management, execution and analysis based on sharing relevant information.

Advantages in Retail Industry Business Intelligence addresses issues like business strategy planning, location wise analysis, quick response to market volatility, cash flow management and inventory rationale, and merging data from varied internal as well as external sources.

(C.2.3) KEY DATA SET USED FOR BI TOOLS

1. Sales Data a. POS b. Turns c. GMROI 2. Market Data a. Market share b. Competitor pricing c. Competitor product lines 3. Promotional and marketing data a. Success of past promotions / customer feedback b. Total cost of promotion 4. Customer-centric data a. Demographics b. Frequency c. Loyalty 5. Supply chain and operations data a. Demand b. Identify profitable products c. Keep track of units sold 6. Merchandising data

IT budget of Pantaloon retail for 2013-14

CONCLUSION
Today in every business the most challenging job is to make you efficient enough for surviving in this volatile market place. With increase in growing completion in Pantaloon Retail profit margin shave become thinner. In order to address the ever changing business demands Pantaloon Retail need to have a secure and dynamically scalable infrastructure. As a solution, Pantaloon Retail should focus on implementing technologies that will enhance the customer experience. They should view IT initiatives as major component that will help the business drive market share rather than just supporting the business. Management Information System, Business Intelligence and analytics will play a key role and using BI tools will make decision making easier and faster at Pantaloon Retail in near future.