Microsoft Dynamics is a line of enterprise resource planning and customer relationship management solutions. Microsoft Business Solutions, which is responsible for Dynamics, was formed after Microsoft acquired Great Plains Software in April 2001 and Navision in July 2002. Dilip Popat, director (special sales), Microsoft Business Solutions (Western Europe) is responsible for the deployment of the Dynamics suite of products in the retail industry. Popat is no stranger to retail; before he signed up with Microsoft in 2000, he worked 17 long years with Sainsbury’s in the United Kingdom. He has worked with some Indian retailers as well. Excerpts from a conversation with Bhupesh Bhandari.
There are three things you emphasise: Connecting people, insights and customer relationship.
We feel it is very important to have a mission and vision to enable retailers; we call it the connected experience for retail. Retail is a people business. People are the heart of the organisation. Retailers have nuances around staff turnover and attrition rates, which is common in Europe and the United States. Some large Indian retailers tell me that this has become an issue here too. Part of our focus is how do we enable people with our solutions to be able to drive their business — whether it’s a customer-facing activity or an operational area like supply chain. Information technology has traditionally been very complex. The use of our technology is to provide people with the right tools and take some of the complexity out.
Retailers have professional, part-timers and people working in very specific roles. It is important to provide the right technology for the different roles. That’s the first pillar. The insight piece is the critical piece around how do we give visibility to what the consumer is doing, what’s happening to the business, what’s happening to performance, supply chain and labour cost. This is another important component for us — how do we provide an end-to-end view of what is happening in your business? We have had to deal with issues where people have invested a lot on information technology but, because these are silos and not integrated, they have challenges. Any retailer I meet has a lot of data but to make sense of it for a decision is some kind of a challenge.
Ultimately, retail is about satisfying your customer. So what we talk about is how do we build a much more connected relationship? Consumers are changing dramatically. There are different categories of customers. Retailers look at how to deal with customers who have more information about the retailer. How do we connect with those consumers because they operate in a very different way than the traditional?
How many retail customers do you have?
We have thousands of them and they use different technologies. In the point-of-sale area, we have a dominant 85-90 per cent position. They use Windows-embedded software. We scaled that up by working with our partners. For a retailer, what is the most mission-critical component? For credibility, we have to provide a rich point-of-sale solution. Once we started moving into that area, we were able to get the respect that we can do retail solutions for ecommerce, multichannel or other areas of operations. Navision has hundreds of customers in India too. Tesco uses a lot of our solutions; particularly if you look at tesco.com, there’s a lot on the Microsoft platform. We cover the whole process of order capture, in-store picking. We have worked with some very large customers. The beauty of what we are doing is that we don’t think that’s the only category of retailers. There’s also the small retailer who does not need the same level of complexity or challenge but needs some basic solutions.
One of the core areas where we can deliver benefits is the total cost of ownership of that solution. In the Dynamics products, we have taken the complexity out so that it looks like a Microsoft product. There are no complicated screens that you have to change and where people need to be trained. That reduces the total cost of ownership. Retailers work on thin margins. They look for solutions that will take the cost out and improve efficiency. Dynamics is very well positioned to do that.
What is the efficiency and savings can you help bring to a retailer?
It is difficult to come out with a generic number because it depends on your size and how far are you implementing our solution — single store, two stores or deeper? Certainly, it’s very rare for us to lose the debate when the customer has done an evaluation of our solution vis-à-vis the competition. It is inherent in the way we have designed these products. You would expect 20-25 per cent lower total cost of ownership than the more heavyweight solutions.
The other thing is giving you end-to-end capability. We are not just saying we can help you with supply chain or point of sale; both are important, but providing an integrated suite is much more important. And yet we leave the choice to the customer. Some may be new to the market and may want the whole thing; others may have made some investments. The fact that we can give you a full portfolio of products is a massive differentiator. Integration is such an issue for most organisations and we can resolve it. The other is innovation. For us, yes it’s about solving today’s problems; but it is also about trying to help you solve tomorrow’s problem which you may not even face or consider at the moment. But for us to innovate over the long term is very critical.
When I was in Sainsbury, loyalty was all about points and cards; today, the card is still important but it’s much more than that. I shop in a store, through a catalogue, paper or online, I may shop online; and I may collect some information on my mobile device. Building loyalty is so different from five or six years ago. We as a company need to research, anticipate and invest over a much longer term to provide capabilities that retailers will look for over the next ten years. A great example of innovation is what we did with the Surface Table. It’s a smart device that recognises your mobile phone and identity; that technology has a part to play in hotels and restaurants. It’s started getting adopted, but we began the investments in it more than five years ago.
Some retailers give their managers handheld devices so that they spend more time on the floor. Is that a trend?
Mobility has increased. We started with solutions that will help people go off the shop floor, look at information and then take action on the shop floor. As you look around today, there are retailers using mobile devices for specific things like price checks, inventory management and control. We have a partner called Retaligent in the US which provides a solution called Clientelling; it captures the data for a fashion outlet, and based on your history and preferences offers products accordingly. It can be a mobile application as well as one on the desktop computer. An associate can engage with you more effectively. Mobility has a role to play in operations but it is more powerful if you are able to engage customers with such personalised tools.
So, is the mobile phone fully integrated into customer relationship management?
There is still some work to be done. The mobile phone is important because all of us have one; it is critical for work and to search information. It is a tool consumers are using to walk into retailers, look at the product on the shelf, compare prices and maybe even order the product from somewhere else. So, it is a very important device for us to engage with. The industry is working on how do we connect with the customer in a more direct way, apart from the website. As a pure brick and mortar retailer, you are not fully engaging with the customer who is willing to compare and review products. You can download the map of the store, and compare prices. If you are willing to be identified, if I can personalise content, then there’s an opportunity there. We still need to go through some of these issues. I see those developments begin to happen.
How can Dynamics help retain people?
One of the key links is essentially the tools that people can use much more easily; they are designed to be simple and quick to use. You can do the job and move on to your next activity. Any technology that is complex, takes you time to learn. With Dynamics, you are not bogged down with complexities. That is a critical element for employee satisfaction which translates into retention. We make the job of people easier and let them do value-added things like serving customers and responding to their queries.
How is the retail environment in India different from the West? Did you come across legacy systems here?
It’s an exciting market. You have some very mature retailers. They have made big investments in applications. They have some legacy. But the opportunity in retail here is huge. How do you leapfrog in a market that is growing despite the impact of the slowdown? There is a great opportunity for retailers to leapfrog some of the learning steps in the investment choices they make. I tell retailers let us help you connect with retailers not in competition with you to share some of the learning lessons. We do a customer advisory board for that reason. We call retailers from all over the world for a dialogue. People are pretty good at talking about their experiences when they are not in the same market. This is an opportunity to harvest what others have learnt, what has worked and what hasn’t. We recognise that retailers here may start small but have the aspiration to grow. It is important for us to offer solutions for each stage. As the market grows, you want to move up the chain. But you don’t need all the capabilities at the beginning. With Navision and Dynamics, we cater to different sectors of the market.
When will you get Dynamics AX (the latest in the Dynamics family) to India?
Dynamics AX will be launched here in early 2011. We have to localise the product to make sure we are compliant with the fiscal rules, the VAT rules. Each country has its own set of complexities.
Is India a Navision or a Dynamics AX market?
It is a market for both. In India, you will get more retailers in the small to medium range; but I equally see very large retailers developing. One of the reasons to bring Dynamics AX is to cater to the different spectrums of retailers. I would expect us to have a healthy Navision business as well as a healthy Dynamics AX business.
