Euronics: The ERP software system for retail, LS Central, is a good platform from which to move forward with new developments
Source: Äri-IT Autumn 2022
Last year, Euronics, the largest retailer of home appliances and consumer electronics, implemented a new enterprise resource planning (ERP) software application for retail, LS Central to make everyday work both in physical and online stores more efficient. According to Aldo Kremm, the company’s IT development manager, the new program is like a foreign language for some users, with its own terms, slang and expressions that need to be learned.
‘For the last ten years, we used a retail program that, after some time, no longer covered our needs because it didn’t want to grow with us. The different programs we used were interfaced with each other, but a bit of a human factor was needed everywhere, which significantly increased the administrative burden. Some human errors and changes in numbers occasionally happened that took a lot of time to resolve,’ claims Aldo Kremm. According to him, the goal was to find a platform from which they could further develop their commerce solution and which would itself evolve. E-commerce is one example where, in order to remain competitive, things need to be automated so that everything happens quickly and with as little human intervention as possible.
The predecessor of the ERP software Business Central, Microsoft Dynamics NAV, had been used in the group for over 15 years and it was also used in their accounting. Thus, it seemed logical to move the whole company to one platform. ‘We have been working with NAV for a long time and we knew what to expect and what its capabilities are.The newest thing for us was the automation of things related to the POS, since this solution allows the user to configure the view and the functions used in the POS according to their needs. Every company does things their own way, and so do we. We partnered with BCS Itera, who helped us upgrade the LS Central commerce solution to meet the needs of Euronics by creating certain data fields and web services. By now, LS Central has provided better insight and greater transparency for the POS system,’ Kremm explains.
Euronics started using LS Central on 1 March 2021. However, in order to prevent the spread of COVID-19, the 16 Euronics stores across ten cities of Estonia were closed from mid-March by order of the government. Kremm commented that, on the one hand, the closure of the shops gave time to deal with the things that had been overlooked, but on the other, it meant changes in the work process, and in addition to the things planned, it was necessary to deal with issues arising from the restrictions.
‘To be quite honest, there was a lot of work with the new solution at the beginning. Namely, we were one of the first chains in Estonia to completely switch to the web-based version of LS Central, which was also new for our IT partner. So it was a bit of a headache to get the data moving between the POS and other programs as needed. Sales numbers had to be available for other systems in near real time. However, the closure of the stores due to COVID-19 caused the process to slow down, because if there is no load and no users, it is hard to find the problems,’ observes Kremm. At the same time, according to him, the COVID-19 restrictions repeatedly proved that it is good to have your own development team – this gives you the flexibility and speed to react immediately if necessary.
SOFTWARE DEVELOPMENT IS CONSTANT WORK
However, with the implementation of LS Central, the transition to the new software was not finished – its development is actively continued. In addition to the ongoing development, one of the major activities is the implementation of the new software in the Latvian stores of Euronics. This has proven to be more complicated than expected, as Latvian legislation requires a certification for the POS, which means that Euronics has several partners, whose developments must work together: Business Central, LS Central, Latvian localisation and POS customisation, applications made by Euronics. So there are a lot of moving parts and the possibility of surprises is high.
‘In the case of LS Central, it should also be taken into account that the Estonian market is small and the number of customers using international software is limited. This leads to the situation that the companies implementing solutions here are in some sense limited in knowledge, doing what most customers want. For us, it meant exploring for ourselves what has been done with LS Central in other parts of the world, and the fact that we need to invest extra to try several functionalities,’ says Kremm.
The company wished that at the moment of transition to the new software, their effectiveness would not fall. ‘If with the implementation of the new system (I am not talking about small changes here) efficiency is not lost, then the additional efficiency will come quickly. This, of course, does not mean that we do not immediately aim for greater efficiency. And sometimes it’s also difficult to measure, and it may not stand out to everyone. For example, before switching to the new software, it essentially took us the hours of one IT employee every month to solve a variety of problems. Now, this load is at least three times lower. But since we are continuing to develop new functionality and automate different sections, we haven’t directly measured what is related to the new things and what is just regular support.’
However, Euronics has decided to not use several of the possibilities offered by LS Central. ‘For example, we have our own solution for product management, our own logistics solution for transportation outside of LS Central, our online store and a separate solution for business customers,’ Kremm notes. ‘We have also developed services between our information systems and LS Central through which data exchange takes place. While many things can be done within the solution, our approach is that we don’t have to have one central system. Users, of course, would like everything to be in one place, but at the same time they would also like changes and new functionalities to be introduced quickly. Because of this, we keep things separate, but at the same time it is really important that our systems are communicating with each other. Now we have the technical capability to do that.’
IMPLEMENTATION REQUIRED A NEW APPROACH
Kremm says that for some people changes are difficult, while others like them. ‘We used the previous program for over a decade and there weren’t any major changes to it during that time. All processes were tweaked according to the program, and the movements of the employees were already completely automatic when using it. Thus, it is clear that the innovation brought discomfort and a great deal of retraining. Certainly, some things were more convenient in the old program, but you have to make a compromise somewhere and look at the bigger picture, not just one particular function or action. It is important that for the company as a whole, everything is clearer, more transparent and better.’
Euronics also has test environments for all its systems, and LS Central is no exception. ‘During the testing period, users were able to test all the activities and give feedback on what is not working, what is wrong, what they don’t understood, etc. To understand which of the employees immediately began to test the new solution and who needed to be further directed, additional logging was added. This made it possible to track who is actually testing and by how much, and, if necessary, they could also be reminded that it was worth trying and learning so that the new program would not come as a surprise,’ claims the IT development manager.
‘My biggest concern was to understand who was responsible for what with so many parties involved. If the foundation of the program is done by Microsoft, on which LS Central is built, with BCS Itera modifications on top of that, and finally our interfaces, then how to make sure that if one thing or another does not work, the finger is not pointed at each other?’ says Kremm. ‘All the more so since a few more companies will be involved when the same program is implemented in Latvia. I think that this is the biggest risk right now. At the same time, of course, this is not an insurmountable problem, because otherwise we would not have started the implementation of the new program.’
Founded in 1990, Euronics is largest consumer electronics group in Europe, offering electronics, home appliances, health and beauty products, office supplies, and telecommunication and IT devices in more than 35 countries. Euronics entered the Estonian market in 2003 and is represented on the local market with 16 stores. They are a retailer oriented to offering a full service, who, in addition to selling products, also offers additional services from transportation and installation to financing and additional warranty.