How Russian Auchan copes with the departure of Oracle and other foreign vendors. Interview with Auchan Tech CEO Vera Emroth

Vera Emrot: Indeed, Auchan Retail Russia now operates autonomously. In this context, the company's main IT priorities are aimed primarily at maintaining operations, autonomy in IT, and cybersecurity. We also pay great attention to current projects both online and offline and continue to develop them. The lion's share of our investments goes online, the number of online customers in the first half of 2024 increased by 20%.

As for autonomy in the IT sphere, it was launched in 2023, although we began to prepare for it back in 2022. We have compiled a roadmap for all our projects, among which we have identified critical ones. To understand the scale: the company now has about 270 information systems, of which about half are subject to import substitution or localization. In this regard, additional budgets were also allocated, as well as additional personnel were planned. In 2023, we increased by a quarter in terms of personnel and by the middle of 2024 we entered the active phase of autonomization.

Also in 2023, the IT department and the data department were separated into a separate IT company - Auchan Tech, we received accreditation from the Ministry of Digital Development and a license from FSTEC. The creation of this legal entity allowed us to become a more attractive employer for this category of applicants, increased the motivation of our employees.

In connection with the transition to autonomy, we had to change our IT strategy, from foreign cloud resources to Russian clouds. In particular, we moved from Google Cloud Platform to the Russian cloud. Also, in 2022, for example, client analytics migrated to local solutions with SAS, and we transferred gift cards from the products of the Polish company Comarch to Russian solutions. These are just a few examples.

At the same time, since 2014, we understood that what is tied to client analytics, to work with personal data, CRM, should be localized on the territory of the Russian Federation. Therefore, even then we decided for ourselves that, for example, we would not switch to SalesForce, but would use the Russian CRM system.

Speaking about "Attacks," within ourselves we do not divide our stores into "Auchan" and "Attacks" and from the point of view of IT adhere to one strategy. Despite the fact that some of the Atak stores have not yet been rebranded, for us this is a single Auchan retail chain with stores of various formats: hypermarkets and supermarkets. "Atak" is, first of all, shops at home, a supermarket format.

Vera Emrot: No, we didn't have this. We knew what was happening in our competitors in the market, and were able to agree with the vendor. We clearly determined that loyalty processing is critical, agreed on a migration roadmap, and by the end of 2024 we plan to switch to a Russian solution. We were met and given enough time to migrate. We make the transition to a targeted solution in two stages. First localization: moved Comarch from a foreign cloud to itself on-premium, then the transition to a Russian product.

Vera Emroth: You're probably partly right. First, there is a global current contract to use Comarch as part of the "big" Auchan. The second is that we have constructive relations with both the French company and our Polish colleagues, and we try to maintain this relationship.

Vera Emroth: From Loymax.

Vera Emrot: There are solutions of this kind on the market for large retailers. We ended up settling on Loymax. It has already been implemented by one of the largest retailers, respectively, the solution has already been "tested" on a large scale, which is also a plus.

Vera Emroth: We just talked about how loyalty processing is a critical product for us. Similarly, Oracle's financial module was critical to us. According to it, in 2023, we also drew up a roadmap for localization, comprehensively assessed the situation. Of course, first of all, they studied the Russian market, but I would say that it is still "young," and they saw a queue for the most mature decisions for six months or a year ahead.

That is, it was so easy to take and switch to a mature Russian solution at that time we did not have the opportunity, and we needed to migrate from Oracle quickly enough, so it was decided that the most cautious option for us would be its localization, especially since the licenses were purchased and transferred to us. From the point of view of using this software, everything is in accordance with the requirements of the law. So we resorted to this forced measure, since it was necessary to quickly resolve the issue in order to guarantee the uninterrupted operation of our payment system On July 1, 2024, we switched to a localized solution. We still have the stage of its stabilization and the closure of the year, given that we worked part of the year in one system, and part in another.

Vera Emrot: Despite the departure of large vendors, expertise remains on the market, so our partner is supporting the solution. Nevertheless, in parallel, we still recruit people, since not all support and change units are fully accompanied by a partner company.

Vera Emrot: You know, we have not previously used 1C on a large scale: there was a single module in supermarkets. There are companies that, for certain reasons, cannot localize or acquire such a solution as we have now, so, of course, the queue for 1C is lined up for many months in advance. In addition, any product requires customization and adaptation, so it would be difficult and difficult for us to switch to 1C in the right time, adapting it for ourselves. At the same time, it is possible that in the future we will purchase individual 1C products.

Vera Emrot: We have only a human resources module from SAP. From the very beginning, this solution was localized and deployed on-premiere, licenses were redeemed.

As in the case of Oracle, the vendor left Russia, but the specialists remained, the examination on the market remained and it was enough to support and develop this solution. We now have many other critical tasks facing teams, and migration from SAP HR is not a priority.

Vera Emrot: Actually, yes, because Western vendors took with them the best world practices and methodologies for introducing processes. Previously, we learned a lot from Oracle, SAP, SAS and, when choosing a solution, our heads did not hurt about how we would implement this, how long it would take to deploy the system, how to manage changes, what integrations, pitfalls, etc. All this was brought by a large consulting team, vendor support. They worked deeply through all processes, including the solution deployment methodology and support. And with their departure, access to the global knowledge base became somewhat distant from us.

Why am I talking about it? For example, we have now completed the transition from SAP Ariba for internal procurement to a local solution and are faced with the following: despite the fact that the local solution is a good one, there are difficulties in seeing the scale of this project to the end, determining how many people we need, how many integration experts and methodologists are required, how much time will be needed for training, etc.

And with all this, if you can still solve such problems with software, gradually strengthening your team, then everything related to hardware is a whole quest: there are a lot of questions, from logistics to cost, maintenance, repair, support. When ordering this or that spare part, there is no understanding whether she will arrive in a week, in a month, in four months and whether she will arrive at all. And the price, it happens, was originally named one, and what the final price will be is not at all obvious. Everyone has such problems now.

Vera Emrot: If you look through the prism of big retail, then obviously we have a large number of customers, transactions, we have a smart omnichannel business and a large-scale IT ecosystem. And where we are talking about systems such as ERP, WMS, TMS, etc. - what we call the kernel - as a rule, local solutions do not cover functional requirements enough. We have difficulties with performance, with integration. That is, the solutions are not quite "tested." It can be difficult with that.

As for client analytics, e-com solutions, the pandemic, tightening requirements from regulatory bodies for working with personal data, namely the transition to Russian software, pushed the market to the fact that there were more solutions, and over time they moved very much. But again, the main problem is "iron."

Vera Emrot: 5 years ago we did not have our own development, because in many ways we used common corporate solutions, and if some improvements were required, then, as a rule, they were implemented and implemented in all countries of Auchan's presence. It was a global corporate policy.

But after certain events, these improvements became inaccessible to us, or difficult to access. Especially when it comes to highly specialized functionality. Today we implement all the processes themselves that are not covered with a standard boxed solution.

We already have decisions that we make entirely ourselves. For example, a supplier portal designed to communicate with our partners. And in early August, we also released a solution called "Without a Trace," created as a module for an ERP system as part of the Autonomy program based on a microservice architecture. It is designed to combat write-offs, and with its help we make a certain contribution to the ESG agenda by reducing the volume of waste. I note that the integration of microservices into our large IT systems is also carried out by Auchan Tech's own IT specialists.

Vera Emroth: About 50. But we are quite flexible, and often on projects where more employees are needed, we resort to outstaffing developers.

Vera Emrot: We use generative neural networks in marketing - we create with their help catalogs of Auchan products, product descriptions. We also make various interesting emotional stories for customers: for example, based on the check data and what product he buys more often, based on this data, the neural network creates a portrait of the buyer. For me, for example, the neural network created a portrait with the image of bananas, because this product was often present in the check.

We also, of course, actively use AI in order to predict sales and improve accuracy. In particular, the accuracy of forecasts has grown from 70% to 90%, even a little more. True, so far we have worked only on one perimeter - on promotions, but from November we plan to gradually switch to the entire assortment, which is huge in Auchan, which required additional work and tests. Due to the higher accuracy of the forecast, our reserves decreased by an average of 15%.

We also do joint programs with suppliers, because they often lack an understanding of how many goods and when they should produce, and thanks to the analytics that we provide them, they can plan their production more accurately and efficiently. For example, 11 suppliers that we have in the pilot project managed to improve the quality, completeness of supplies (service level) by 8 percentage points.

In addition, we started using AI at self-service checkouts to combat unknown losses. To do this, we are implementing a test project for the use of video analytics. Its implementation takes time, since the program must be trained: it must clearly recognize a person, determine which things are his, and which are not. For example, if a buyer put down personal glasses, a phone, the system should not assume that these are some goods that he did not scan. This is all, of course, not easy, but there are already the first results. So far, this pilot has been launched in only a few stores.

In addition, on the basis of AI, we have chatbots that make it easier for recruiters to communicate with candidates; we also use AI to produce media content for our corporate television (writing texts, voicing videos, visual design), etc.

Vera Emrot: There is such a case in Auchan, but we went here according to a slightly different scenario: we just track sales at the checkout, and if they are absent, we send an alert to the manager's phone so that he checks.

Video analytics is a rather expensive story. Covering 20 thousand square meters. m. Cameras are really expensive. Therefore, they found an alternative option for themselves, which, it seems to us, works more efficiently.

This is the business of our BI department. We write a special program ourselves and get an understanding of which product is sold at what frequency, from which category it is sold (A, B, C, D, E) and we understand that if it is a product from category A or B, then it is sold at intervals per hour and highlight it. But anything is possible, and it is not always possible to highlight the result qualitatively.

We have so far launched this project only in supermarkets - there the matrix is more reversible and the effect, respectively, is higher.

Vera Emrot: More often, line personnel work with TCD (terminal of collecting data) - a regular scanner. If an employee, for example, only deals with the delivery of an article, then a replenishment module is available to him, tracking the absence or presence of the article. He can make certain adjustments in order to make a better order. We also use mobile phones with an application for assembling orders in E-commerce and tablets to work on an assortment with reference to planograms.

Auchan employs quite a few employees with hearing impairment, they have special bracelets that signal instructions in emergency situations, as well as a communication platform available from any device with an RJD translator (in real time, speech is translated by a sign language translator into gestures and vice versa, providing smooth communication of inaudible colleagues with other employees).

I note that when Auchan first came to Russia, an employee with disabilities was already hired in the first store in Mytishchi. Our company stands for equal opportunity and is open to all. At the moment, we have about 800 employees with HIA. They work not only in stores, but also in service services, including IT.

Vera Emrot: This format not only could not take root in our country: in the USA too, although at one time this concept had a wow effect, everyone talked about it and wanted to play it. Such a project should be followed by a large development team and other specialists who serve such a store. This is necessary so that both the store and the client are not deceived. What will require the most complex AI and video analytics. Business is, after all, primarily about making money, so today a store without sellers remains, rather, an image story, and, probably, the economic effectiveness of such a model requires more detailed study.

And, in my opinion, if people visit the store, they come there, including for emotions: they want to come, see, try, compare, feel, try on, etc. Recently I was in China, there are shops without cash registers, with payment for biometrics, but even they have cashiers, because people come to chat. And if they do not want this, then they usually order products online with delivery home or through a checkpoint.

Vera Emrot: Since 2018, we have been systematically combining information systems. In 2024, we migrated to unified inventory management systems, that is, we aligned ERP systems of two formats.

All this led to a simplification of business processes, made it possible to more effectively manage multi-format and optimize the cost of supply chains.

Although initially we did not have the goal of quickly combining everything, since supermarkets and hypermarkets had processes that could not be so easily taken and changed. It took a while.

By July 2025, we plan to finally complete the unification of our IT infrastructures.

Vera Emrot: Auchan Tech today employs about 500 people on various tasks. Of these, approximately 200 people are technical support. To understand the scale: over the past two years, our staff has grown by 40%. This happened, among other things, due to the fact that we are leaving for IT autonomy and completely switching to our own support, introducing Russian solutions that require more people. As I said, we use outstaff for some projects.

At the same time, we continue to grow and work on the modernization of existing systems, not forgetting about cybersecurity, as well as carry out projects using data and introduce the so-called new mobile services.