When the Going Gets Tough, the Tough Go SOA Shopping

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September 14, 2007

When the Going Gets Tough, the Tough Go SOA Shopping

Everyone knows retail is a tough, dog-eat-dog business. And, in recent years, it's been no fun being a department store. They that have been eaten up by specialty stores and big-box warehousey stores alike.

"It's a street fight everyday," said Jeff Marshall, senior vice president and CIO of Kohl's department store. However, as I heard Marshall discuss in his keynote at BEAWorld in San Francisco this week, it's been a fight he and other retailer types love to engage in.

Kohl's is one of the fast-growing department stores around, with growth quadrupling over the past 10 years. The firm made $13 billion in 2005, and is on a path to grow to $24 billion by 2010.

But this growth is not happening by accident. Nor can it all be attributed to good locations. As Marshall related in his BEAWorld keynote, by effectively leveraging technology in new and innovative ways, Kohl's has been able to beat the relentless competition at every corner. SOA is proving to be an agile force for the large retailer.

Kohls' strategy for the next several years is to increase its profitability by five percent a year, primarily through operating efficiency, Marshall elaborated. The retailers' business is highly diverse, with a wide assortment of merchandise categories, as well as extensive supply chain. "Our processes need to marry up with the processes that our partners use," he said. Over the past year, Marshall's department has been engaged in projects to enhance analytics and decision support, marketing and CRM, multi-channel systems, point of sale systems, and a warehouse management system. Plus, the company forged an agreement with Chase to manage its credit card business, which required closer integration with the bank's systems.

"Our systems need to operate a real-time speed," Marshall said. This includes making the same information available to internal users, as well as on the Website, and, soon, to cellphone and PDA users. "We needed services that are available across the enterprise -- not just to the logistics department."

Marshall acknowledged that SOA is a "long journey," but in order to demonstrate the viability of the effort, the IT department engaged in some "early wins" with service-enabling various aspects of internal IT operations, including requirements management, change management, impact analysis, and governance models. As part of this effort, Kohl's "looked at its entire stack of of software, and evaluated its legacy partners in a holistic fashion," Marshall explained.

A key part of the service-oriented process was the training being delivered to its technology staff, he added. "We offered training programs that skills that emphasized integration with business partners, not the old COBOL/Java stuff." While Marshall did not offer precise metrics or cost saving numbers, he noted that "this IS transformation is helping drive business goals."

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