Comms costs Edcon

By Leon Engelbrecht, ITWeb senior writer

Johannesburg, 01 Mar 2007

The high cost and low reliability of communications is costing retailer Edcon much in money, complexity and duplication, says group CIO Henri Slabbert.

He says unreliable networks force Edcon to decentralise its IT infrastructure, which runs contrary to best practice elsewhere.

"If you look at Best Buy, in the US, they have centralised their back-office. They can do that because they run 2GB lines to their stores and their network costs and reliability is better. I have to develop a system that has a server in every store - so that is 1 000 software licences," he said yesterday on the sidelines of ITWeb's 2007 IT Confidence conference, in Midrand.

"The poor networking is causing duplication and complexity, because where the Europeans and North Americans can centralise, I have to put down, maintain, service, manage and run servers all over the country and provide software and licences - and pay for them."

Networking is poor outside the major centres. "We still have 64k-lines running to some of our stores." Slabbert adds these are typically smaller stores, generally with one point of sale, in towns such as Vryburg and Oudtshoorn. "If you look at shopping centres, we can consolidate their networks. We have eight stores in most malls so we can put bigger pipes down in terms of availability and capacity. But we can't afford that in outlying areas."

Call to vendors

During his presentation, Slabbert called on vendors serving the retail market to spend more time understanding the industry. He also said they needed to repackage their product presentations to stress the advantages and benefits, rather than the technology.

"I am not buying RFID or SOA, but the benefits that RFID and SOA provide, so bring me a business plan."

Slabbert also cautioned local vendors that they no longer have a captive market. "There is quite a number of vendors who want to enter the South African market, whether they have a local presence or not.

"They are very professional, and with the new ways of communicating, it is less important for them to have a local presence. They can support their products from the UK or India; you have access to their expertise, whether they are in SA or not. Local vendors must take that into account because it means additional competition for them."

While Slabbert is happy to spend his money wherever the business value is best, he prefers simplicity. "I want local vendors to be more aware of international players and front-end them, otherwise it means increased complexity for me."