Yes, There Is Life After Y2K

The time and resources previously consumed by year 2000 efforts in the grocery industry are now being directed to linking disparate systems often encountered through mergers and acquisitions, and to internal and external ecommerce ventures and partnerships, according to IT executives.

"The challenge for 2000 and beyond is choosing the best projects that will have the highest payback," said Kroger's former vice president of information systems, Thomas Murphy. He is now the president of Peak Tech Consulting, a company based in Colorado Springs, Colo., which specializes in information technology management and benefit realization.

An obvious priority for companies involved in mergers or acquisitions is linking all systems to run on a common architecture. "Some of you will face integration issues because of acquisitions, and you may find new technologies forcing you into new directions that require new skills and capabilities," Murphy warned during the Food Marketing Institute's MarkeTechnics Convention in San Francisco in February. "You could also find obsolete technologies need to be replaced."

Cincinnati-based Kroger is struggling with these issues as Y2K hysteria subsides. "We see the maintenance of our infrastructures caused by our mergers and acquisitions as new technology opportunities," said Carver Johnson, group vice president of management information systems for the supermarket giant, during a panel discussion at the convention. "We are examining and realizing the synergies of recent acquisitions, and then we will move ahead with using these systems to gain operations efficiency, drive margins and reduce operating costs."

There are also opportunities in business-to-business ecommerce. Not only do these applications have a greater potential for revenue, but retailers expect the virtual channel to change the way they conduct business. For example, collaboration can be improved through Web-based services like UCCNet and Via Link.

"Think of the cost savings that may be applied to the supply chain," Johnson explained. "By using collaboration we can move to 'demand chain management' and manage items based on customer demand. Category managers and buyers can handle multiple categories efficiently and get product to market in a cost-efficient manner."

"Business-to-business efforts allow our industry to move beyond traditional electronic data interchange (EDI) methodology to improve information sharing and communication with business partners," said David Couch, vice president of information technology at Spartan Stores, Grand Rapids, Mich. "It can make the industry more efficient and drive costs out of the system."

Other retailers are using the power of partnerships to fuel online ventures. One example is the recent marriage between Supervalu and WebVan. "WebVan brings the technology and knowledge of home-based shopping services, and Supervalu provides the link with its brick-and-mortar presence," Murphy said. "Through partnerships, retailers can share resources and both share benefits. In some cases, you can get a quicker return on investment because the project may be done faster and will achieve quicker results."—Deena M. Amato-McCoy