CIOs contemplating ways to transform their businesses for the digital age must make a series of important technology choices. One such decision helped nutritional supplement outfit NBTY cut by more than half the remodeling time of its Vitamin World stores thanks to custom software that helped architects and other workers more quickly share information.
NBTY is applying lessons learned from that digital makeover to automate business processes and boost operational efficiencies for its Puritan's Pride and Holland & Barrett brands, says Andrea Simone, NBTY CIO and chief business transformation officer. Simone says the effort should help NBTY meet financial targets mandated by owner NBTY parent Carlyle Group, which paid $3.8 billion for the company in 2010.
NBYT has since been conducting a multi-year business transformation focused on achieving operational efficiency and productivity gains, which would translate to increased revenues. A chief pillar of this plan is modernizing NBTY's dated IT architecture.
In 2011, NBTY hired Simone to lead the project. "There was a lot of work to do to transform the platforms when I joined the company," says Simone who previously held various IT roles during his nearly 20 years working for Procter & Gamble.
BPM overhaul: The cure for legacy system disease
"A lot of work to do" is a common mantra among CIOs tasked with driving digital transformations, often to deliver better experiences for their customers. But before some companies can begin focusing on improving customer-facing services, they must streamline and automate their business processes.
"The historic driver of BPM was to improve efficiency in operations to reduce costs," says Clay Richardson, a Forrester Research analyst who tracks business process management (BPM) technologies. "Now it's more about using BPM to accelerate revenue generation."
There’s no shortage of BPM tools to enable such work, but some business processes must first be extricated from legacy systems. Such was the case for NBTY, which operated on IBM AS/400 systems and software and lacked basic business intelligence and analytics.
Simone directed what he calls a "ninja team" of Lean Six Sigma experts to codify business processes. He chose the cloud-based Appian platform and hired BPM shop Genpact to build software that automated onerous, paper-oriented tasks. "We found a lot of things that could be accelerated, a lot of time lost in communications and unproductive work," Simone says.
For example, closing a store for remodeling is a costly endeavor, with contractors swapping paper-based blueprints, Excel spreadsheets, budget documents and other contracts that require signatory approval. Papers might get lost or ignored. That leaves a time lag in the approval process for store changes.
NBTY built an app for sharing and approving architectural blueprints and other store-layout information, which helped reduce store down time from 35 days to 13 days. When approval requests for a budget or another change are logged in the app, appropriate managers are automatically notified, via their mobile phone, to take action. The new approval process drastically shrinks the decision-making process, enabling stores to get refurbished faster.
"We were able to standardize all of those tasks so that every remodel would look exactly the same from a project plan standpoint," Simone says. "The whole workflow of remodeling has been digitized," Simone says.
Change management, not technology, tops challenge list
NBTY also built an app that helps workers manage registration for Vitamin World's 22,000 products abroad, in compliance with international regulations. Another app tracks product quality as samples were tested in labs, before they can be packaged and shipped to Wal-Mart, Target, CVS and other retail partners. These apps are being applied to NBTY's Puritan's Pride and Holland & Barrett business lines, enabling NBTY to reuse much of the code already written for the Vitamin World overhaul.
With developers typically writing working apps in six to eight weeks, technology was hardly Simone's greatest challenge. Rather, it was getting employees to switch from manual processes to the new software. As inefficient as the paper-shuffling was people resisted the change. "It was, ’I used to do this in four steps, now I need to do these other three steps instead'," he says.
NBTY's work remodeling Vitamin World was years in the making, and the company has just agreed to sell its assets to Centre Lane Partners in a deal expected to close in mid-February. Despite all of the Vitamin World work, Simone says the revamp constituted just 5 percent of NBTY's BPM transformation.
Simone is busy refashioning the company as an "Oracle shop," rebuilding the IT architecture with Oracle software for ERP, supply chain, human resources, finance, master data management, ecommerce, procurement and product life cycle management. He's also using Salesforce.com for customer relationship management and Hadoop for analytics, both of which will likely help the company recognize new sales opportunities.