BJ's Wholesale Club Inc. is in the early stages of a five-year plan to overhaul its aged IT systems as part of a CEO-led growth plan. In Part 1 of our coverage, CIO John Polizzi explained how the company established the plan and began the project with its operational systems, warehouse management, point of sale, gas, and payroll, all of which will lay the groundwork for a new ERP implementation.
As BJ's systems are being overhauled, the company is now taking a close look at product and data management -- pursuing a master data management (MDM) initiative. There are two separate components to the initiative, Polizzi said -- a business and a tactical project.
"When you talk about data governance and data quality, the master data management approach is the foundation piece," he said.
It's a step that demands careful consideration lest it undermine the investments made in software. Legacy systems tied to specific applications, and software packages without the right data quality processes and standards, mean that an organization can wind up with incorrect data tied directly to the functional applications, Polizzi said.
"You wind up with data that can get bastardized very easily or corrupted very easily because of application requirements," he said. "That is why we chose the membership and product data management system as the first two areas where we are going to look to externalize our master data from any application. Then, as we choose an ERP system, that will be the data source that feeds the ERP data.
"For years, everybody said, 'Well, you just tie the application into the application databases.' The restrictions with that, especially in a retail environment, are as you get into multiple channels, the data requirements for products are a lot different than the data requirements you traditionally use for merchandising or for your clubs," Polizzi said. "The attributes around that data build on what you have but go quite extensively in other ways. So this idea that the data has to be tied to the specific application hasn't made sense for a while. We're going in the MDM direction at least in the first two data areas -- membership and product."
Not to be left out, an updated enterprise architecture and an integration architecture are both in the planning stages as well.
"It's critical we establish that early on and [understand] how we are going to leverage integration technology," Polizzi said.
Banking on business intelligence
Meanwhile, Polizzi is also keeping his eye on business intelligence (BI).
"What we're realizing is that it is going to be three years before we seriously look at ERP solutions, and we have, like most companies, a large number of siloed data sources used by different divisions to do analytics and reporting," he said. "We have the problem where one division will run one report off of one data source, and another will run what they think is the same solution, or the same questions are being answered of another, and we'll get two different answers."
Built into BJ's five-year plan is a BI road map evaluating the current and future analysis needs and how the company will establish the right combination of people, process and technology to reach its milestones.
"We're also in the process of getting approved quick wins to improve critical data sources to support merchandising and finance," Polizzi said. "Because ERP is three to four years out, we need to make sure we're providing the right information to support the business in the interim."
"It's great to say you have all these roadmaps, but in the interim you have to get some of the work done," Polizzi said. "That's why we split into two initiatives. We do need to do the longer-term work and say how we're going to get to an enterprise view data warehouse, the proper data stewardship and data governance and what are the right processes and approaches we should be taking -- everything from dashboards to analytical reporting."
Like many organizations, BJ's has multiple data warehouses across the organization and multiple tools for accessing that data favored by different departments.
"We're not going to get into religious wars over the tools," Polizzi said. "We're going to figure out over time how to rationalize it so we can do an effective job of training and making the right tools available to the right groups."
Planning for the short term, preparing for the long term
An IT initiative, especially BJ's, is not a one-and-done process but rather an evolution.
"The reality is when you're building a five-year strategy, you're re-looking at it every year and saying, 'OK, what am I going to do in the next 12 to 18 months, and does that tie into what I plan to do in the next 36 months, and then what does that do to the overall program I established,' " Polizzi said. "Is it still reasonable? Have the business priorities changed?"
Organizations need to match business objectives with the framework of the IT plan at least annually. Events like an acquisition or new competition may also demand an adjustment in strategy. For BJ's, it's so far, so good. The company has not yet made any changes to the plan, Polizzi said, despite the recent economic news.