Bob McKee, industry strategy director, fashion, at Infor

Bob McKee, industry strategy director, fashion, at Infor

Bob McKee, industry strategy director, fashion, at Infor looks at why legacy systems are holding back manufacturers in the fast-paced fashion industry.

As the fashion industry seeks to capitalise on market growth and explore new opportunities to expand, brand owners and manufacturers are asking more of their enterprise systems - and in many cases, questioning whether they are fit for the task in hand.

In the face of change, it is paramount to recognise the tell-tale signs that systems aren’t up to scratch. These signs typically manifest themselves in different ways. Often as organisations expand internationally, they find that the regulatory and reporting environments are not supported by their current system. Given the level of investment associated with overseas operations, companies need to hit the ground running and can ill afford the time to spend creating workarounds for creaking systems.

Add to this the fact that the skills required to support legacy systems often become increasingly difficult to come by the longer a system is in use, and it is easy to see why maintaining the status quo represents a far greater risk to the business than moving to a new modern, fit-for-purpose solution.

Picking your moment
Experts suggest that the window to make the change is before business strategy demands more than systems can provide. But, often companies wait until functionality starts failing and they have to improvise before taking action and by this point, which only demands a greater share of resources and makes the task more difficult.

Typically it is the people who know the existing system the best – often, the executive who originally championed the system and/or the IT staff who know how it ticks – who are most reluctant to admit that it has reached the end of its useful life. They identify with it and see how it has become part of the DNA of the business.

While users may still be able to work around the ageing system to get their job done, the business case no longer supports keeping the old ERP system. It is constraining growth, to the detriment of other parts of the business. On the other side of the coin, systems are configured to the needs of the moment and as business requirements, models or skillsets change it’s often forgotten that the current systems may just need an update to their configuration.

Attention should be given to the underlying technology, the platform requirements, and the strength and vision of the current systems supplier. Weakness in any of those three areas means it likely time to look for a replacement.

Making strides
The very first thing to do in a software selection should be to define the business issues that the company faces (the trigger) and the type and level of performance needed to achieve results (the goal). It is important to discuss these with both customers and suppliers.

Through gaining a comprehensive understanding of why the status quo will not enable goals to be reached and value to be derived, a picture can be built of what precisely is required. A focus on key industry specific processes and the company’s key differentiators are crucial in ensuring the system supports long-term strategic goals.

One fashion company operating in the lingerie sector recently reviewed its legacy ERP system to ensure its business requirements were being supported. It made the decision to upgrade in order to benefit from capabilities that had become increasingly important in the running of its business. As an international business with a large volume of SKUs, it was important that the solution could support multiple products with varied labelling across several markets, as well as purchasing and contracting processes for goods sourced both internally and externally.

Productivity of the workforce was also a key factor in ensuring that the ERP system was up to scratch. The upgraded system enabled users to access contextualised information relevant to their role or task, directly on their screen, which in turn, allowed them to undertake activities more efficiently, eliminating the need to spend hours scouring different databases for a piece of important information.

But it is not just ERP systems that can hamper growth. Another company in the same sector, Courtaulds, opted to invest in a new warehousing system as its previous legacy system was hampering the organisation’s ability to adapt to new customer requirements, deliver higher volumes, manage costs and reduce turnaround times.

In line with changing business requirements, Courtaulds’ new system had to be able to bulk pick large orders of private label products for retailers in the most efficient way possible, while supporting picking of a wide range of order sizes for branded products delivered to stores, online retail outlets and individuals purchasing on websites.

Having moved to a new system, Courtaulds benefitted from improved delivery performance and reduced costs through lower headcount; greater visibility of stock; and cycle counting through the year, removing the requirement to stop the business for a week for a traditional stock take, freeing up resources to focus on market opportunities.

A follower of fashion
So what should a fashion business look for in a new enterprise system?

Industry-specific functionality is fundamental in selecting a fit-for-purpose system. The fashion industry is unique – as are the challenges it brings. The time it takes from concept to consumer is critical to success, and to ensure the best possible outcome, the best providers will understand the nuances of the fashion industry.

Support is another key issue. It takes a community of thought leaders, developers, consultants and analysts to support a software solution. It is important to look a little deeper into a given provider’s partners are assess their level of understanding. Who provides help desk support and who comes on site if needed? Does support follow the sun and do they have language skills needed?

Finally, an evaluation should focus in on the overall cost/benefits. Throughout the process of evaluating current systems against future systems, cost savings are important to factor in, although increasingly, companies are looking beyond short term cost savings in lieu of longer term value to the business. Total cost of ownership (TCO) over a period of three to five years is a far more accurate measurement than the typical comparison of the costs of software acquisition – or acquisition plus estimates of implementation. TCO tracks those unforeseen costs of assimilation into the business and hardware plus human ‘run costs’.

The time is now
While it may seem only yesterday when existing legacy systems were implemented, the pace of change in the fashion industry shows no let up, and it is almost certain that the system will not have kept pace with that change.

When it is impossible to deliver what you need to, when you need to and to whom you need to because of system constraints, it is time to move on.

Through adopting a flexible system which is less reliant on specific skills, allows more time to be spent on the core business and less on digging up information or improvising with spreadsheets, fashion businesses can be confident they are primed to embrace any opportunities which come along, enhancing customer experience and driving profit in the process.