Clear Reasons for Moving into the Cloud
by David Rosenbaum, February 2011
One of the primary reasons companies implement the software-as-a-service (SaaS) model is to focus on their business rather than on their IT. Or, as Lojas Renner CIO Leandro Balbinot says, “We’ll leave the technology to our technology partners.”
In deciding to move to the cloud, Balbinot says, the critical time for Lojas Renner came at the very beginning, “when we were deciding about the tool and the model and choosing a partner. At that time, Oracle helped us assess the market and then followed up during the project. We were very strong Oracle partners already, and we were used to Oracle products and implementations. And I was familiar with Oracle Hyperion Planning and knew how useful it could be for Lojas Renner.”
But before a company can move to the SaaS model, it must map its business processes to the new software tools its IT partner will provide—a task Christopher Koch, associate vice president of research and thought leadership at IT Services Marketing Association, says can be “a nightmare.”
“At any company,” he says, “there are all sorts of different databases and applications hiding behind the walls. Cleaning it all up and integrating the SaaS application with the non-SaaS applications it needs to talk to [such as the transactional systems Balbinot has kept inside Lojas Renner] are significant challenges.”
However, says Nicolas Simone, director of process and corporate projects at Lojas Renner, the company was not simply mapping its processes to enable the move to SaaS; the ultimate goal was to improve them.
“We’re collecting workflows in all the stores,” says Simone. “We’re working in all areas of the company—the stores, the suppliers, logistics, internal support, IT—to improve our business.”
Lojas Renner’s main implementation challenge this year was to “review all the processes to enable us to use the Oracle Hyperion tool best,” says Balbinot. But the real difficulty, he says, came not with the tool but with change management. “You always have to deal with the Golden Age syndrome,” Balbinot says. “That’s the idea that things were better before. But we brought examples of ROI from other companies to show how we could do better with the new model. It took some time, but in the end, most people supported what we implemented. We had a big convention in August 2010 for all the managers and supervisors of stores, and we extended it and made it a training opportunity for them.”
Now, says Balbinot, for the first time, a majority of Lojas Renner transactions are accomplished through company-issued credit cards, leveraging Brazil’s transformation from a cash- to a credit-based economy and prompting the CIO to consider moving the company’s database offshore. “We’re looking to grow faster than we can with a local database,” Balbinot says. “We ran some security tests, and we think our data could be safer in an Oracle center in the U.S. than in a dedicated center in Brazil.
“In practice,” Balbinot concludes, “high service levels are achieved when you have the right experts and standard infrastructure, and you can get that better at Oracle than locally.”
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David Rosenbaum is the former editor of CIO Magazine.