Ilya Barsuk: The modern information system is only the tool in hands of clever managers

TAdviser: By your experience whether always large trade business assumes territorially and organizationally the distributed structure or there are trading companies with big turnovers, but with a monolithic structure?

Ilya Barsuk: As for large distribution (wholesale) business, the similar situation still meets not seldom, but in the conditions of the modern Russian market the developed branch network providing proximity to regional partners is nearly main competitive advantage. Respectively, most of large "wholesalers" or consider development of a branch network as one of high-priority tasks, or already actively started this process.

If to speak about retail trade, then such phenomenon as the only, independent shop which is not a part of a distributed network and not having additional infrastructure (distribution centers, warehouses, office, etc.) the phenomenon rather exotic. It is explained, first of all, by the strongest competitive pressure from network structures which have essential advantages: ample financial opportunities, special price offers of suppliers, powerful marketing programs, an opportunity to lobby the interests in government institutions. In such conditions to survive to "singles" it is impracticable. The exception is made so far by the small shops of "close proximity" and elite boutiques trading in expensive, or highly specialized goods, but hardly they can be referred to category of large business.

TAdviser: Whether the distributed structure of business means lack of centralized operation? Whether the situation with ERP system implementation changes?

Ilya Barsuk: Decentralization - a scourge of many geographically distributed companies. So it developed historically that trade business in Russia developed with considerable advancing of technology base. Long time in the market there were no software products capable to provide the necessary level of automation of similar structures. Still large role is played also by conservatism of many owners of trade enterprises who declare "unavailability" of their business to similar "shocks".

On the other hand without implementation of the unified information system key competitive advantages of a distributed infrastructure are lost. Let's take wholesale business: what is costed by branch which is deprived of an opportunity in real time to carry out work with a set of warehouses and distribution centers of holding, has no access to the uniform customer base, base of suppliers of goods and services, has no opportunity to control, occasionally very tangled, logistics chains, etc. In retail the situation is even more critical: impracticablly quickly to fill up trade inventories of shops, according to real requirements, to trace marketing programs, to manage quickly pricing, to work effectively with suppliers, to manage budgets, to predict sales, to use the uniform reference book of goods and services. The problem of a modern ERP system, certainly, to provide to the trading company tools for accomplishment of these tasks, is aimed at it also our RS-Balance 3 system.

TAdviser: What qualities should the ERP system have to meet requirements of trade business with the distributed structure?

Ilya Barsuk: I will try to list on priority:

• ERP system should be initially designed as "holding" and is aimed at management of an unlimited number of legal and administrative divisions with a possibility of creation of difficult hierarchical structures. In the ideology of a system the following principles should be underlain: determination of the internal and external organizations ("the - the stranger"), end-to-end management accounting, management of the rights and powers of divisions, areas of responsibility and Competence Centers.
• The advanced "trade functionality" including sales management, purchases, a warehouse, logistics, pricing, loyalty systems of clients, etc. An important role is played also by the wide list of the retail store equipment (fiscal registrars, scanners of barcodes, data collection terminals, scales, point-of-sale terminals, etc.) integrated into a system.
• The powerful financial and analytical block including accounting, tax and management accounting, besides with a possibility of maintaining in parallel a set of charts of accounts, management of a great number of legal entities, planning and budgeting, accounting of agreements, the developed analytical reporting to serve t.e as the important instrument of "regular management" as business.
• Flexibility and ease of adaptation of a system under business processes of the customer, convenience and the width of user preferences, a possibility of operational reorganization of the distributed structure. Existence of modern extenders of a system and also their universality. It is necessary to remember that the customer waits from system implementation first of all for fast economic effect and is not ready to wait for years when "company implementer" fulfills on it functionality of the implemented solution and will start a system in all numerous divisions of the company.
• Wide practical experience at ERP-sistemy developers, knowledge them specifics of the Russian market and the distributed trade business. Existence of real experience at trade enterprises at system architects.
• Present and high-technological effectiveness of the solution, high performance, convenient and sufficient administrative tools. Existence, for example, of "three-unit architecture" is absolutely necessary requirement to the systems applied on average and large business with a distributed infrastructure now.

I want to note that the RS-Balance enterprise management system, even in the first version was created as "holding" therefore the ideology of spaced structure for it is natural.

TAdviser: Whether a "trade" ERP system should include functionality on automation of work of retail outlets and what advantages his existence gives to the customer?

Ilya Barsuk: Unambiguously - yes! In it we see one of essential competitive advantages of the RS-Balance 3 system. Many of advantages of the similar solution are quite obvious, I will list only some of them: a possibility of the organization of the common information space providing transparency of business, the real work online giving relevance of information and speed of decision-making, full control of retail transactions from the central office, lack of need to support the "piecewise" solution from a set of software products that also the main thing - lack of need of integration of the diverse systems which, in most cases, and is the main bottleneck of similar conglomerates sometimes leads to spraying of IT resources.

TAdviser: How, by means of an information system to ensure uniform functioning, for example, of the central office of a wholesale company and the warehouse terminal (perhaps, with own transport division) and, at the same time - efficiency of decision making about replenishment action and a priority of shipment of goods on site?

Ilya Barsuk: The similar task is classical at implementation of a modern ERP system. How it is solved by RS-Balance 3? Flexibly configured and managed electronic document management is the cornerstone of our product. In a task we see several concurrent and consecutive business processes which need to be coordinated in the uniform scheme. How to make it? Let's begin with process of replenishment of a warehouse which usually relies on the following main components: the documents fixing a customer need - orders with which sales managers, data on so-called "insurance" stocks which need to be filled taking into account planned and real dynamics of shipments, issue documents which operate with stock balance, plans of assembly and the goods delivery to the client work. On the other hand office managers manage dynamic process of reservation of goods in which key factors of decision-making are: existence of goods in a free remaining balance, existence of "goods in way", presence of earlier reserved goods in other orders, dates of shipments, dates of arrival of machines, payment terms, etc. On the basis of these data there is also a management of the general process. At the same time purchases, logistics, sales, shipments are not independent processes any more, and work as the uniform complex mechanism which purpose of work to coordinate, apparently, incompatible tasks: the maximum providing a customer need, at the maximum turnover of a warehouse! Whether it is a cornerstone of success of wholesale business?

TAdviser: How the same problem is solved in retail trade (in the course of interaction of the distribution center, the central office and outlets)?

Ilya Barsuk: The solution is similar. Feature only that unlike wholesale business, the shop is own, "pocket" client who can be driven into rather tough framework with such tools as regularity of deliveries, the autoorder, accurate planning of assortment policy, existence of the commodity matrix reflecting specifics of this outlet, presence of debugged logistic schemes of deliveries, etc. Applying these technologies, it is possible to reduce the human factor operating in each remote shop practically to zero.

TAdviser: How the purposes of the trading company in general are approved in the ERP system with the purposes of separate divisions? It is known that achievement of a main goal can be achieved due to failure from achievement of a number of the subordinated purposes (in particular, profit maximizations of separate shop).

Ilya Barsuk: In it that also consists a main objective of implementation of the ERP system - to adjust centralized operation by profit and expenses in all complex of divisions taking into account priority of development of separate outlets and the directions of business. For example, high yield of separate shops occasionally is reached due to infringement of requirements of other divisions that steadily creates a distortion in complete infrastructure. The main advantage of the developed retail chain stores is the balanced distribution of commodity and financial flows for the purpose of receiving the maximum profit by the company in general, but not separate division. At the same time the separate shop becomes only "small screw" in the debugged mechanism.

TAdviser: What can the ERP system in respect of approval of actions of staff of the company of complex structure and what tools for this purpose give the modern systems have?

Ilya Barsuk: I mentioned above that the managed document flow which is a basis for creation of business processes of the enterprise is the cornerstone of the RS-Balance 3 system, but each document has also additional attributes, such as "responsible", "contractor", "status" (it is issued, processed, confirmed, paid, approved, is approved, etc.). Using these attributes interaction of staff of different divisions, chiefs and subordinates, managers and customers is built.

TAdviser: Whether it is possible, based on experience of implementation projects of RS Balance 3 to estimate that impact which implementation of the ERP system has on efficiency of trade business with the distributed structure? In what it is shown most obviously?

Ilya Barsuk: Everything depends on a format of business and its market position, the level of development of administrative structure. But I will note several key components on which the effect is shown most noticeably: increase in providing clients (buyers) with goods, reduction of illiquid assets, increase in turnover of warehouses, decrease in transportation and logistic costs, increase in efficiency of capital investments, more intensive development of infrastructure of business, satisfaction of personnel, economy of working time and expenses on communication services, increase in profitability of business in general, increase in stability and many other things.

TAdviser: Whether it is possible says that the distributed structure of trade business requires compulsory use of the ERP system and cannot effectively be controlled without it or, after all, it is possible to save and manage some separate business applications?

Ilya Barsuk: Probably, everything is possible and to say that implementation of the ERP system is universal panacea - absolutely incorrectly. The modern information system is only the tool in hands of clever managers. Having worked in wholesale business more than 5 years, I with confidence can tell that - it is impossible to automate chaos! And real experience and a business grasp will always give hundred points to any, most ingenious automated system forward. On the other hand I want to note that it is simply impossible to save on implementation of a centralized system - since losses and a lost profit at its absence are not comparable to expenses on its purchase, implementation and operation at all.

TAdviser: Thanks.