Building a Foundation for Growth and Innovation Value: Guilt-free shopping experiences with prices from $5 to $50 © Charming Charlie 2015l 5 Manifesto © Charming Charlie 2015 The

© Charming Charlie 2015

John Hnanicek, CIO, charming Charlie March 24, 2015

Building a Foundation for Growth and Innovation�

© Charming Charlie 2015l

Introduction John Hnanicek

§  Introduction John Hnanicek, CIO Charming Charlie

–  Fantastic, fun and energetic culture

–  Willing & eager to accept change

–  Realistic approach

–  Business and technical insight

–  Strong Business relationship and engagement

–  Open and frank dialogue

–  Regular communication on / off site

–  Ongoing AMS application support partner

OLR is proud to be a partner the Charming Charlie organization!

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§  Overview

§  Scope, Footprint and Timeline

§  Catalyst for Change

§  Implementation Detail and OLR Partnership

§  Process / Change Management

§  Best Practice

§  What’s Next?

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Company Overview

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§  One of the fastest growing, award winning, specialty retailers in the United States as 2013 ACE Awards Specialty Retailer

§  330 stores across 42 states ranging from 3,500 to 15,000 square feet

§  The Experience: Feels like an upscale boutique, with upbeat music and friendly sales associates

§  The Merchandising: Assortment of approximately 9,000 choices per store

§  The Value: Guilt-free shopping experiences with prices from $5 to $50


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Manifesto


The Catalyst for Change

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•  Support global expansion beyond US and Canada

•  Visibility into 9,000 SKUs per store

•  Increased headcount to support manual process and growth

Growth Accuracy Profitability

•  Inability to allocate based on sales demand

•  Inaccurate store inventory

•  Unable to predict sales inventory and gross margin

•  Diminishing gross margin through markdowns

•  AddiFonal operaFng costs for handling processes (store to store transfers)

•  Missed sales and markdown liability with case pack items


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What’s included in scope?

§  SCOPE §  Retail Merchandising System (RMS) §  Retail Trade Management (RTM) §  Retail Price Management (RPM) §  Retail Invoice Match (ReIM) §  Store Inventory Management (SIM)


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Oracle’s Solution Footprint for Retail

BUSINESS OPERATIONS

Assortment Planning

Space Compliance

Space Profiling Regular Price OpFmizaFon

Merchandise Financial Planning

Item Planning Category Mgmt

Markdown Price OpFmizaFon

Merchandise Planning and OpFmizaFon

CUSTOMER INTERACTION Store ATG Commerce Call Center Catalog Field Sales Field Service Loyalty MarkeFng

CORPORATE OPERATIONS Financials CompensaFon Real Estate Projects Indirect

Procurement Learning

Management Help Desk Compliance Human Resources

Master Data Management (Item, Vendor, Customer, LocaFon)

Inventory Management and ValuaFon

Purchasing Import & Trade Management

Sales AudiFng Invoice Matching

Cost & Deal Mgmt Pricing Mgmt Merchandise OperaFons

Store & MulF-‐channel OperaFons

Sourcing & PLM Demand ForecasFng AllocaFon

Inventory Planning Value Chain CollaboraFon

Replenishment Replenishment Opt

Supply Chain Planning

Supply Chain ExecuFon

Warehouse Management TransportaFon Management

Home Delivery

Manufacturing

PLM

Sourcing Order Management

Point-‐of-‐service Store Inventory Management

Returns Mgmt Workforce Scheduling

Size Profile OpFmizaFon

Proposed Oracle ImplementaFon

Oracle modules Implemented already/in progress


Getting Started

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MiFgate Define Build Setup Develop

• Project Phase • Deliverables • Project Roles

• Communications Cadence

• Project Governance

Strategies: • Technical Architecture • Change Management • Training • Testing • Rollout • Post Go Live Support

• Risk Assessment • Dialogue with Sponsors


Project Governance

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•  ExecuFve Sponsors, Business Sponsors •  Remove Road Blocks, Overall Business Strategy,

Minimize CompeFng PrioriFes

•  Project Sponsors, Project Managers •  Oversee all project deliverables, Program

communicaFons, Proper resource allocaFon

•  Process Owners, Subject MaZer Experts •  Own compleFon of deliverables, Experts on process changes,

Training, Evangelists for process and soluFons Project Team

Program Management

Steering CommiZee


A S O N D J F M A M J J A S O N D J F M A M J J A S O

Proposal Select Vendor

Scoping

Ini-ate

Design

Development

Tes-ng

Deployment

Closing

CC Board Approval CC Target Go Live Date CC ConFngency Go Live Date (20% or 3 mo. conFngency)

Preliminary Schedule

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014 2015


IT APPLICATION LANDSCAPE


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Critical Success Factors

§  This is NOT an IT project; It is a business project sponsored by Business and supported by IT.

§  Maintain clearly defined change management and project governance processes, and communicate them to the organization.

§  Commit to key resources being available, set expectations, and hold each resource accountable throughout the organization.

§  Communication is key. From frequent status updates, to key milestones – ensure that everyone is aware, regardless of their role.

§  Measure success and celebrate achievements along the way.

§  Stay true to the adoption of industry best practices with zero modifications. Don’t be afraid to let go of the status quo.


Guiding Principles

§  NO Customizations

§  Keep it Simple – Solutions don’t need to be complex to be effective

§  Monitor Budget and Timeline

§  Control Scope

§  Deliver Value – The implementation of Oracle will support the business goals that CHARMING CHARLIE’S current systems cannot

§  Design for tomorrow – System design should accommodate future state business requirements

§  The right partner with OLR

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The Nine Levers

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Implementation Approach- Proven Methodology from OLR+ governance strategy

Process- Utilize industry best practices and the Oracle Retail Reference Model

Organization- Project team, key business and IT resources plus industry experts from OLR

Software- Oracle Retail Merchandising Suite + Store Inventory Management

Reports- TBD during blueprinting and planning

Interfaces- TBD during blueprinting and planning

Conversion- TBD during blueprinting and planning

Enhancements- Vanilla implementation using best practices and NO MODIFICATIONS

Technical Modifications- Third party hosted and managed solution


Merchandising Impact

§  Support domestic store growth (Current system will reach its limit around 350 stores.)

§  Ability to support international expansion

§  Reduces errors during store execution of transfers, adjustments, etc. due to system issues

§  Realize efficiencies by employing industry best practices on merchandise hierarchy setup and price management

§  Improved DI support by maintaining HTS code, freight factors at style level

§  Automates and streamlines pricing strategy execution, ability to set regional pricing and meet competitive pricing targets

§  Scalable operational processes like Reclass, Markdown

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Why Allocation?

§  Better manage new stores by building sister store capabilities in the system

§  Be able to forecast by understanding future needs vs. allocating only using selling history

§  Ability to use blend of color family and hierarchy (can only do by color at present), attribute

§  Improve Replenishment capabilities

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Accounting Impact

§  Ability to improve vendor setup and

management

§  Highly configurable matching tolerance

thresholds

§  Supports different legal entities/multiple

countries

§  Improved credibility for the audit process

§  Reliability in inventory management process

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6 Steps for Managing Change

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1.  Clearly describe the change vision and goals.

2.  Actively involve leaders in owning the change.

3.  Assess change impact and plan how change will be managed.

4.  Engage and prepare employees to adopt the new way of working.

5.  Align the organization to enable and reinforce desired behaviors.

6.  Monitor adoption of the change to ensure desired outcomes

Stakeholders

ü  Help design communica-on methodology

ü  Manage risks ü  Determine success factors

Process Owner ü  Iden-fy champion ü  Create communica-on plan

SME ü  Create training and rollout strategy ü  Train the trainer ü  Help understand the change ü  Reduce discomfort and confusion


§ What’s next?

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What’s Next?


Questions?

Documents

Building a Foundation for Growth and Innovation Value: Guilt-free shopping experiences with prices from $5 to $50 © Charming Charlie 2015l 5 Manifesto © Charming Charlie 2015 The