The Dollars Cometh
After the first $500,000 outlay the purse strings loosened somewhat and another $1 million has since been invested in the information systems. The next big step - which includes a bigger price tag - is an entirely new ERP system.
Colovos believes that the company is willing to spend more money on computer systems because IT has proved itself at the bottom line. His own key performance indicators are also importantly being met. He is now obliged to provide regular updates to the board, deliver specific project milestones, and with each submission of a new business case for computer applications, define the costs, the deliverables and the impact on resources. Having identified these targets he then must meet them.
"The business has grown 30 per cent since I came, but resourcing has stayed the same," he says. That he believes is because he has a good grip on what resources are needed to run the business, and how computer systems can help with the job. "I'm out on the floor with the general manager of production. I talk to the forklift drivers. I'm talking to the business on a weekly basis and long term I'm developing a strategy and understanding of what the business and the users need."
In addition Colovos meets with his now eight-strong IT team each Tuesday at 11.00am for an update session, giving him 360-degree vision of the information systems. "Over the last 12 months the board have been very encouraging about the development of the IT function. Led by Paul Moraitis, they are saying: 'What can we do next? They are looking at RFID and barcoding and ERP."
The ERP project, codenamed Everest, has a budget of $3 million with the first stage of the rollout scheduled to be completed by February 2005. The shortlist of suppliers includes Microsoft's Navision, SAP, ASW from European supplier IBS and Microsoft Axapta. Stage one will include implementation across the group, including wireless capability to allow tablets and barcode readers to input inventory data from the factory floor.
Although ERP is currently in the box seat, Colovos is aware of the revolution that RFID will spell for the retail business and its supply chain. He is involved with the EAN transport guidelines development group and also the ITOL Grocery Supply Chain Project established by EAN and the now defunct National Office for the Information Economy. This involvement with standards setting leaves Colovos mindful that as the ERP solution is rolled out, it needs to be implemented so that in the future it can accept information harvested from RFID readers.
He accepts that until stage one of the ERP is rolled out completely, all he will have achieved is automating what employees have been doing by other methods. His three- to five-year plans, however, take him to stage two of ERP rollout, which he believes will give the company much finer control of the reporting and analysis of the business. During the stage two rollout the ERP system will link into all Moraitis's suppliers, customers and partners, including CHEP pallets, and packaging companies VISY and Marinucci.
"As an example, say a company has been buying from us for three years. Well, if they don't buy anything for three weeks for some reason an alarm will go off for the sales manager. We will be able to track our sales and spot buying pattern variations," he says.
The goal is to deliver a more sophisticated and integrated management tool than the stopgap measure that is currently implemented, which is a Corvu business intelligence system that sits on top of the TIMS system. While it provides management with some reports at present, in time it will be replaced with an eye to delivering a more streamlined and timely set of reports.
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