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By Michael Eggebrecht
VF Corp. is not a simple organization. An apparel giant with more than 30 brands, including Lee, Wrangler, Vans and the North Face, VF has multiple supply-chain rhythms and go-to-market strategies, says Martin Schneider, VP and global CIO since 2006.
Over the past few years, VF has transformed from primarily a wholesale operation to a retailer, which has brought new challenges for the company's IT organization. The economic climate has also added new pressures. The company's total revenues in the first quarter dropped 7 percent - from $1.85 million to $1.73 million - from the same period last year, and VF says it will "continue to be vigilant about controlling costs across all businesses."
The sheer number of businesses in VF, which has acquired Mo Industries, Seven For All Mankind, Lucy and Eagle Creek in the past two years, helps to make Schneider's job a complicated one.
"Some companies acquire brands just to make them part of their portfolio and their product line," says Schneider, who was previously at Gillette Co., where he was VP of global technical and manufacturing systems and CIO for the Duracell unit. "When VF buys a brand or a company, it keeps that culture intact, because you're really buying that intellectual capital." That also applies to IT. Integration of these companies, he says, isn't a one-size-fits-all affair.
Schneider recently spoke with CIOZone about structural changes the company has made to its IT organization, the role of brand CIOs and the increasing emphasis on flexibility. "We don't get credit for managing complexity," says Schneider, but "it makes the job interesting."
VF has increasingly focused on retail efforts since you joined. What has that meant for your role as the company's first global CIO?
VF has been going through a transformation, and the transformation includes [the shift] from a wholesaler to a retailer. Globally we have over 700 retail stores; we do over $1 billion in retail sales. But we've also been transforming from our heritage brands, which include Lee and Wrangler, to lifestyle brands - like the North Face and Vans. And this has implications on technology - a lot of sourcing, versus owned manufacturing, and growth internationally. When you speak about retail, it's not just domestically, it's Europe, it's Asia, and so on. The model might be different in those countries and regions, but it's still around retail, or our partners' retail.
When I came on board, we were an IT organization that reported to different parts of the business. One of the first things we did is centralize the IT organization, to improve service delivery and business partnerships. Retail forces us to think about technology in a different way. As a wholesaler, if you have systems availability issues, it tends not to be visible to your customer. If your ERP goes down for an hour, your customer doesn't know it. But with a new go-to-market strategy including retail and e-commerce, if your point-of-sale device is down in one store, it has immediate impact.
What was the first initiative you worked on at VF?
I look at initiatives in two broad buckets: One is project-based initiatives, and there's also transformation of the IT organization. Those two go hand in hand.
The big project that we were working on when I first came on was implementing SAP for the North Face and taking them off of their legacy systems. We purchased the North Face in 2000. Around 2003, the decision was made to put them on SAP. In 2006, when I came, we were one month away from go-live. If you want to talk about learning from a CIO perspective, you probably don't want to come in one month before a major go-live of SAP. But I love challenges, and we did go live quite successfully, and have been rolling out SAP since.
Since that time, we've also been looking at our organization structure - making changes to that, making significant changes to our processes and also our people. It focuses on two broad areas: one is to improve our service delivery, whether it's technology availability or technology capability; and then improving our business partnerships so we can make sure we're working on the right projects and also have our investments aligned with our business priorities.
VF has made a number of acquisitions over the last two years. How do you approach integration?
Three years ago, it was, let's see how fast we can bring them on to our network and our application base and processes. There are advantages to doing that, but there are also disadvantages. Since that time we've morphed the strategy to really making sure that we're doing what's right for the business. What's the timing? Does it make sense day one, does it make sense year one or year three? And is our existing application suite that we've put them on the right one?
We were an SAP shop - we're rethinking some of that. We do have a best-of-breed approach. We've always had that, because SAP doesn't meet all of the needs in the apparel and footwear space from a technology perspective. But also, SAP is big, and for some of our smaller brands, it might be too big.
We have a no-vendor-left-behind strategy. A lot of that was because of the acquisitions. Some of the brands that we have, security is not top of mind for them. A small company with a do-what-it-takes-to-succeed mentality - you tend not to think about information security. Their applications - they might be domestic, they might be regionally based. Well, sometimes their technology is not big enough to help them grow.
We've been looking at all acquisitions now and saying, "What should our strategy be?" It is individualized, based on the maturity that the company would require in their technology stack. It's not a one-size-fits-all anymore.
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