Clothes R Us

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of a customer relations management system (CRM)

How can a CRM system benefit Clothes "R" US?

Despite major setbacks, two months of testing were still thought to be sufficient for demonstrating system readiness.

Setting up private network would take a month longer than originally anticipated

Orlin wanted to have a few pilot stores up and running

Positive momentum for team

Needs to have overall project plan figured out

Avoid the trap of over-committing and under-delivering

The new system will have provisions for:

Clothes “R” Us - Company Evolution

POS & credit systems

Store management suite

CRM system

Inventory itegrating all stores & HQ

Extension of corporate email to the stores

Implementation of VoIP at stores and HQ

Wall Street View of the company in 2000

Company over-expanded

Had the worst gross margins in the industry

In 2001

Closed 40 stores

Total headcount reduced by 20%

Number of employees per store was reduced by one-third

Company reported its first net loss of ~$123.62 million

Benefits

Store managers reduce time spent on back-store management from 6 to 2 hours

ROI would be $15 million per year after development

Increased operating efficiency in stores due to improved CRM systems

Reduction in store associates would result in cost reduction in salaries

Clothes “R” Us - Business Case

Stores

Running back-store management functions on standards PCs

Desktop fax

Dial-ups modems for remote corporate dial-up

Applications for handling nightly sales closing figures

Old-fashioned POS systems for cash draw and item database pricing

POS with nonintegrated credit authorization device with its own phone line

Credit authorization were processed through the HQ

Program Description

Clothes “R” Us - Business Case

Orlin & her IT department would lead the development

Planned to implement system in less than 12 months

8 peices: POS, store management, network services, CRM, inventory, infrastructure, technology management & operations, and training

Most of the people involved in overseeing each aspect of the new system were internal within Orlin’s staff

Performance goals

Free up the store manager to work the store instead of the store office

Automate cash management to include credit/debit at the store level

Provide always-on-network connectivity, allowing real time push/pull polling of store sales and inventory data, ordering, employee time reporting, and payroll processing

Allow cross-store inventory checking

Reduce credit authorization processing time at the POS from 30-45 seconds to less than 5 seconds

Implementation

Outsourced jobs

Consulting firm did the following:

project management office

applications development

infrastructure engineering

quality and assurance (QA)

testing

technology management and operations during the project life cycle

training

not enough IT resources

BAI Stages

Program Phases

Review Meeting

Cost of each week of delay:

$92,000 of additional costs

$288,000 of lost savings

Events with most impact:

4 week delay with GUI sign off

4 week delay product managers leaving

4 week delay due to infrastructure

4 week delay for setup of private network

Cost and Impact of 4 week delay in GUI sign off

Cost Impact:

Can look at estimated lost or actual costs for June and July

Overall Impact:

Delay in crucial development stage

Estimated Lost: ($92,000+$288,000)*4= $1,520,000

Schedule Impact in June: approximately $792,000

Cost Impact in July: approximately $1,650,000

Actual Costs:

What projects or activities will be impacted by each delay?

Could there be any way to detect the delays before they took place?

Revisit timing of program

addressed but never changed

If GUI was area of concern for committee, propose draft before

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