SuiteWorld2014: Cloud ERP ‘agility' key to fast international expansion, says retailer Williams Sonoma
Traditional systems would have taken ‘years' to set up business abroad
By Matthew Finnegan | Computerworld UK | Published: 10:02, 15 May 2014
US online retailer Williams Sonoma claims the agility of a cloud based ERP and ecommerce system has been key to enabling its fast expansion as it moves outside of the US for the first time, with traditional on-premise taking 'years' before realising real business value.
Home furnishings retailer Williams Sonoma sells through catalogues and ecommerce platforms predominantly in the US, with revenues of $116 billion. It owns a range of eight brands that include Williams Sonoma Home, Pottery Barn and West Elm.
Having moved its brand name into Dubai through a franchise model in 2009, it realised the opportunity to stake in the global market worth $532 billion, with plans made to move into the UK and Australia.
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Speaking to ComputerworldUK at Netsuite's customer conference in San Jose, Williams Sonoma vice presisdent for international systems, Rob Bogan, said the decision to use a software-as-a-service platform made it possible to set up quickly in these new geographic regions, something that would not have been possible with on-premise systems of larger suppliers.
"The cloud totally helped our first-mover advantage. After our decision to expand the property retail guys slapped down a lease for a location in Australia, and said 'here is when they want to open it - make it happen IT. You have got ten months, and we want four stores, and you have to be live on this date'," he said.
"We hit the date - we were even early with the websites. We launched four websites in under 100 days. It was no small task, and the platform enabled us to do that. There is absolutely no way we could have done that with one of the big ERP products."
Bogan said that the plan was to iterate fast to build ecommerce functionality, rather than extend its existing ERP systems at its US base, which are based on a mixture of SAP and Oracle.
The company went live on NetSuite SuiteCommerce in May 2013 to power four individually-branded ecommerce storefronts in Australia, as well as a point of sale (POS) system in-branch, all built on top of Netsuite's ERP and CRM solutions. It has also recently been able to open its first store, West Elm, in central London.
"The appetite for 'big bang' was just not there. For example, if we were to say 'it is going to cost $60 million, take us three years and we are going to build a server farm in Singapore', there is just no way we are doing that," he said.
"The time it would take to make those systems global, it would have been way too expensive, as well as having a long time to market. We didn't want to have a situation where the cost and depreciation was going to cripple the international business so that they would not see a profit for a decade or more."
The two-tier ERP approach sees the international business IT systems operate independently from the central ERP systems. However it also integrates on some layers to avoid duplication of data and content.
"We have isolated the platform - so we have the domestic business and the international business, and Netsuite is being used for POS and procurement, order management, the website - but we are still leveraging what we have domestically," he said.
"For example, our high res catalogue images - on which we spend millions of dollars each year - are still coming from our digital asset management system in the US.
"We didn't want to go and reshoot everything, so we created workflows so that when a product is created it will go to the content management system and pull in the assets and all the content."
Having set up the ecommerce platforms quickly, there are plans to extend the functionality, and Williams Sonoma hopes to be able to offer omni-channel opportunities for click and collect, which has not been rolled out so far. "Sometimes it is not the platform but the processes which can be a barrier," he said.
The retailer will also seek to invest in more detailed analytics platforms to gain insight into its customer transaction data.
"We have realised that the reporting in Netsuite is not something we want, as it is a very transactional reporting system, so we need something that is more business intelligence analytics, and can slice and dice data."