The role of IT in retail Dynamic Vertical Solutions

By Bunny Sidhu

Ms. Rakhee Nagpal, Managing Director & Founder, DVS Indian retail has witnessed a rapid transformation in recent years with old and new business models in the form of department stores, convenience stores, malls, multiplexes, supermarkets, hypermarkets etc. proliferating in number. Driven by its large consumer base, comprising of a young population of over 890 million (below 45 years of age), India is one of the top emerging markets for global retailers. With the expansion of the retail industry in terms of points of sale and points of supply, operations are becoming extremely complex. The diversity of products traded, the huge number of employees, the multiplicity of outlets in the supply chain and sheer scale of transactions involved (driven by millions of customers who shop at retail outlets every day) all serve to enhance the complexity of retail operations. Information technology (IT) has come to play an important role in managing retail operations. Dynamic Vertical Solutions (DVS), an industry leader bringing end-to-end business solutions for the retail and hospitality sectors, put forth some valuable insights into the role of IT in India’s growing retail industry. According to Ms. Rakhee Nagpal, Managing Director & Founder, DVS, “The Indian retail sector is the second largest employer in India hence there is an enormous scope for the sector to streamline their operations. Technology has a crucial role to play in ensuring that there are timely replenishments, material movement is accurately monitored, shrinkage is reduced and customer needs are monitored and catered to. The supply chain should be efficient, robust and shelf-centric.” IT has its main applications in functional retail areas and data cleansing. Functional activities relating to merchandizing and supply chain require efficient systems to getting the right product to the right place at the right time. Data is critical to the business decision-making process and it is essential to have effective data cleansing and mining systems in place to ensure access to relevant and updated data. However, there are certain challenges in implementing IT solutions in the Indian retail industry as compared to other global economies. “The retail processes in India are not as well known and established as processes in other Western or mature economies where retail has been an identified and supported industry. Although it is one of the top revenue generating industries for India, the organised sector with streamlined processes and applications of IT systems is still a very small percentage at only 4%. A huge amount of retailers in India don’t have systematic processes in place which is a challenge compared to markets that have a stronger organised retail presence,” says Ms. Nagpal. She also feels that lack of awareness of a correlation between price and quality poses as a huge challenge to the implementation of IT in the Indian retail sector. “The lack of knowledge of how IT can support retail businesses and the need to identify a suitable price for high quality is a big challenge and can compromise on the quality of work in deploying the solution at the customer site, just for the IT support companies to break even,” she remarks. DVS has invested heavily in working with industry leaders, associations and consultants to educate the market on the need for long term investments in IT as a means to accelerate their growth. There is a need to recognize the potential of IT in the country’s organized retail, which is currently growing at the rate of 30%. “Today, with the advent of international brands, government regulations and the acceptance of different retailing formats, the retail sector contributes over 10% of the country’s GDP. IT has transformed the dynamics of the Indian economy by creating businesses and also revolutionizing the employment of trained manpower. Ret ail exemplifies the same,” concludes Ms. Nagpal.

“Environmental Conservation & Cost-Reduction Go Hand in Hand” British Telecom’s Commitment to Green Practices

By Vipul Mehra

	British Telecom’s (BT) focus on green technologies and practices manifests in its use of communications technology to help tackle environmental challenges, while at the same time reducing the enterprise’s operational costs. According to Mr. Arun Seth, Chairman, BT India, “Environmental conservation and cost-reductions go hand in hand. Or so they should if you can manage it the right way.”

Convergence Plus spoke to Mr. Seth in detail about the company’s ‘green’ commitments.

CP: What are your global commitments to 'going green' and cutting emissions?

AS: Our approach is one of continual improvement, combining traditional CSR activities – community investment, risk mitigation and care for the environment – with innovations designed to benefit society and the environment while supporting our long-term growth.

We have set targets in each area to focus our efforts. Carbon reduction is one of our key performance indicators. Our target is to reduce global carbon emissions intensity by 80% by 2020 and to actively engage 20% of our workforce by 2012 into activities focussed on addressing climate change.

Our key 'green' initiatives focus on energy usage reduction and energy security. For example:

• In 2004, we signed what, at the time, was the world's largest contract for the supply of 'green' energy. Nearly all the electricity we use in the UK now comes from renewable sources or combined-heat-and-power schemes. We also have low carbon electricity supply contracts in Belgium, Germany, Italy and Ireland.
• The biggest savings have resulted from our extensive use of conferencing services in place of face-to-face meetings. According to independent researchers, this alone avoided CO2 emissions totalling more than 103,000 tonnes in 2006-07.
• Our UK business has reduced its absolute carbon emissions by 58 per cent since 1996. Our target is to reduce our global carbon emissions intensity by 80 per cent by 2020.
• To achieve our targets, we are looking critically at every aspect of our energy consumption. Power usage was a key factor in the choice of the equipment for our new 21st century network, for example, and our new data centres are being designed to use 60 per cent less power than their predecessors.
• We plan to build wind farms in the UK capable of meeting 25 per cent of our electricity needs in the country by 2016. It is the biggest investment in wind power to be announced so far by a company outside the UK energy sector.
• In the USA, our El Segundo, California, headquarters will soon be powered by solar energy. Some 2,000 solar panels will generate approximately 917,000 kWh per year, reducing our CO2 emissions by more than 290 tonnes.
• We are working with our suppliers to reduce the carbon of the products and services they supply.

CP: What green strategies/practices are you implementing worldwide and in India? What main challenges do you face?

AS: We have measured our carbon footprint in the UK since 1991. Our climate strategy covers our global business and has four elements:

• Reducing the impact of our operations
• Empowering customers to reduce their impacts by offering innovative products and services
• Influencing our suppliers to provide more energy efficient products and services
• Encouraging our employees to reduce their carbon footprint at home and at work

There are many challenges ranging from securing positive government action in the development of policy and supportive regulatory frameworks, boardroom will, customer and shareholder influence. Purchasing behaviours of consumers in high consumption societies also need to change.

The global economic downturn could play a role too – with the rising cost of energy and energy security becoming issues in the boardroom, we could see increased action from industry to become more energy efficient through reduction strategies, use of greener technologies and greener energy supplies.

CP: How far does Green IT go towards saving costs?

AS: Programmes that have improved BT's environmental performance have saved us £365.3 million over the past five years.

Elsewhere, we have taken action to ‘green’ our products and services and help our customers reduce their CO2 emissions.

During the 2008/09 financial year, we introduced a range of energy saving phones equipped with power units that consume around half the power of their predecessors. We estimate that the replacement of all our DECT cordless and fixed-line phones with more energy-efficient equivalents will result in an overall reduction in CO2 emissions in excess of 195,000 tonnes over the next three years and save customers a total of more than £39 million through reduced electricity bills.

To help our corporate and government customers assess and measure their carbon footprints, and identify ways to reduce their emissions, BT Global Services’ specialist sustainability practice launched a carbon impact assessment service in September 2007. Currently available in the UK and USA, the service is being extended to other countries this year. The results are not only green, but cost-efficient. Assessments already completed for customers have identified changes that could eliminate tonnes of CO2 emissions every year and save many millions of pounds.

	The Department of Telecommunications (DoT) has recently selected global player in the telecom space – Telcordia – to implement mobile number portability (MNP) in the Indian market. MNP is a system that allows a mobile phone user to change his telecom service provider while retaining his phone number. The DoT has divided the country two geographical zones, each of which will be handled by a different MNP provider. Zone 1 covers the north and west regions of India while Zone 2 covers the south and the east. Telcordia has
been mandated to implement MNP services in Zone 2 through the consortium MNP Interconnection Telecom Solutions India (MITS) in which Telcordia has a 74% stake.

Convergence Plus spoke to Mr. Naveen Suri, Vice President – Business Development, Asia Pacific Region, Telcordia Interconnection Solutions about Telcordia’s expertise in MNP.

CP: What is unique to Telcordia’s experience in the international market that makes it suitable for implementing MNP in India?

NS: Telcordia is the leading global supplier of number portability (NP) with the most NP deployments worldwide – we have complementary skills in number in number portability training, consulting services, software development, and managed solutions. Telcordia is the only communications company that offers an end-to-end number portability solution and has successfully deployed a clearinghouse in four countries -- Mexico, Turkey, Malaysia, and Egypt -- in 2008 alone. In the U.S., more than 95% of all mobile number portability transactions exchanged between Tier 1 service providers are processed by Telcordia. Telcordia has over 20 years of clearinghouse management experience coupled with large scale national deployments around the world. Furthermore, Telcordia has a unique experience of working with the service providers to help position them to a state of readiness.

Number portability varies dramatically by country. There are several factors that contribute to the success of portability. Some of them include:

Customer Satisfaction: Service choice, price and quality are the driving factors as to which service providers customers use. When they feel that they are getting high-quality services at the right price, they are less likely to churn.

Simplicity and Speed: The process to port a number should be simple and quick.

Zero to low porting cost: Regulators in some countries such as Denmark and Finland do not permit fee to be charged to subscribers. Others like Hong Kong, Switzerland and Ireland allow a subscriber fee but market forces are driving the porting fee to be free.

Number portability benefits consumers. It empowers the consumer to be a lifelong owner of his phone number and fosters additional choice and convenience in communication services and providers with whom they do business. With number portability, operators will look to differentiate themselves on service quality and by accelerating the creation and deployment of new services, all of which will benefit consumers.

Telcordia is uniquely positioned to offer countries, such as India, the experience and deep domain expertise in the area of mobile number portability.

CP: What are the challenges of implementing mobile number portability? Do you think your experience in India will differ significantly as compared to other markets?

NS: Number portability has successfully been deployed around the world, effectively changing the communications landscape in those countries through the added convenience of choice for consumers and opportunities for carriers to differentiate themselves.

From Telcordia’s experience in the 14 countries in which we have implemented a number portability solution, we have found that cooperation, collaboration and market conditioning are essential to the successful implementation and adoption of number portability. For instance, there must be:

• Operator network and operations support systems readiness
• Public awareness on the availability and benefits of number portability
• Operator willingness and cooperation - open transparent forums to develop business rules-of-engagement
• An experienced Number Portability Clearinghouse vendor who can draw on proven deployment performance to easily manage the complexity of the implementation
  India is a unique country due to the size, diversity, and rapid growth in the mobile market. Telcordia as a neutral third party vendor with experience and unique skills has the experience required to implement a scalable, flexible, and a highly reliable MNP solution.

CP: What are Telcordia’s future plans for expansion in the Indian market?

NS: According to analyst reports, the unprecedented subscriber growth is expected to continue through 2012. During that time Telcordia will continue to help carriers scale their networks and optimize their processes to support the rapid growth. At the same time, Telcordia is already helping carriers prepare for the post-growth boom when revenues and customer loyalty will come from advanced, interactive services that will provide lifestyle conveniences to subscribers – from shared wallets to location based services to ENUM services. Communications empowers people and economies and we expect that will have a long-lasting impact in India and throughout the region for years to come. Telcordia plans to be in the centre-stage of this growth.