Finding the best and most efficient way to get its products in front of the customer has always been a key to success at Kenneth Cole Productions Inc.

Consider the launch of the company more than 20 years ago. That’s when founder Kenneth Cole designed his first line of shoes, says Regina Gorinshteyn, group vice president of information technology at the firm.

But Cole wanted to establish the identity or image necessary for a new company and to show his collection to the consumer, so he took an unusual path and decided to sell his shoes directly out of a truck in Manhattan.

It wasn’t that simple. A permit was required to park a truck in Manhattan, and these permits were issued only to utility companies or full-length movie production companies.

So Kenneth Cole’s creative powers took on a new form. He changed the company name from Kenneth Cole Inc. to Kenneth Cole Productions Inc. He got a permit, and in two and a half days he sold more than 40,000 pair of shoes.

Today, the company is still focused on reaching its customer as effectively as possible.
To that end, it is in the middle of an overhaul of its retail systems that will allow the organization to focus on the “truly important aspects of the business,” Gorinshteyn says: “Product, placement and profitability.”

Preparing for strategic growth
Three years ago, the company’s IT department was charged with evaluating its systems landscape and finding one solution that would position its retail business for strategic growth and provide a stable environment for its mission critical processes.

The time was ripe. Kenneth Cole Productions had grown from being a small one-register retail store on Manhattan’s Columbus Avenue into a $177 million retailer with 90 stores, plus a large wholesale business with 6,000 customers.

As its retail business grew, the company found that it did not have sufficient visibility into its sales data, which was managed by a third-party solutions provider. With a main goal of addressing its retail needs, the company moved forward with an eye on developing a solution that would incorporate its entire systems landscape.

“In our model, retail [business] is a top customer for the wholesale area when it comes to footwear and handbags,” says Gorinshteyn. More than 30 percent of Kenneth Cole’s retail business is in footwear.

As such, points of integration between the two business channels are very important. From an IT perspective, the opportunity to minimize the integration points between the retail and wholesale systems was highly desirable. Although the focus remained on retail, the company took a strategic approach, looking for an integrated solution that could potentially address its needs on the supply chain side.

“We really needed good visibility to data across the retail and wholesale channels,” she says. But at the time, Kenneth Cole’s overall systems landscape was extremely complex, with several layers and various systems including a legacy retail system, a JBA System 21 wholesale system and a legacy POS system from NSB.

The systems selection process
Kenneth Cole did not go it alone. The company enlisted Kurt Salmon Associates (KSA) to help with systems selection, implementation and training. Because KSA had already been working with Kenneth Cole for several years, it had a good sense of what the business was doing and where it was heading, notes Kathryn Cullen of KSA.

“Kenneth Cole’s growth was pretty impressive,” Cullen says. “It was time to start to pull together all of the disparate systems that they had into a more cohesive landscape.”

The selection process was very collaborative, engaging the merchandising, retail operations, finance and IT departments from the start. KSA used standard retail process templates to lay out the basic requirements for the retail and point-of-sale systems, and worked with the Kenneth Cole team to tailor the statement of requirements to the firm’s needs.

In particular, KSA focused on communicating closely with the Kenneth Cole team to ensure that the business representatives agreed with the definition of their current requirements and understood the options available for their future needs.

Together, Kenneth Cole Productions and KSA examined best practices, and identified three main goals that the solution it chose would need to meet: 1) The solution had to enable integration and best practices between the retail and wholesale divisions; 2) it had to support the company’s efforts to remain lean from an IT perspective (i.e., be easy to maintain) but still provide a wide range of functionality; and 3) it had to support the growth of the business.

“The result was really a true consensus, which was so critical for this process,” says Cullen.
To ensure that the business remained involved during the entire search process — not just the demonstrations — KSA provided a very structured framework for evaluating and comparing vendors. It was quantitative, and not abstract, says Cullen. “We tried to walk them through it so they really understood: ‘What are the pros and cons?’ ‘What are the tradeoffs?’ ”

The structured process was aided by the continuity of the team members, who participated in all steps — and are still actively engaged as members of the implementation steering committee. “They were there from putting the requirements together all the way through to implementation, which is a really important benefit,” says Cullen.

Kenneth Cole evaluated a large number of systems, eliminating as many as it could early in the process. Eventually it brought in three vendors each for the three focus areas (retail, POS and workforce management) for day-long demonstrations. “It was a pretty rigorous process,” she says.

One of the side benefits of the intense search was that Kenneth Cole received a “true education” not only of the vendors and their products, but about the wide range of solutions on the market and their potential benefits.

Ultimately, the company chose SAP, determining that it provided the necessary and wide range of solutions to support the current and future needs of the entire business.

Implementation and training
In January 2006, Kenneth Cole began two parallel implementations of SAP’s solutions: SAP Triversity POS and SAP Retail.

Today, the company’s POS rollout is finished, with connectivity through a new wireless network that Kenneth Cole installed just prior to its POS implementation. “[SAP Triversity] is up and running in all our stores and very much appreciated by our business management,” says Gorinshteyn.

For training, Kenneth Cole teamed up with RWD Technologies to create basic training documentation, which Gorinshteyn describes as “so detailed and carefully developed that there is absolutely no room for assumption.”
Kenneth Cole also set up a training lab at its headquarters, outfitted with 12 cash registers, where RWD Technologies and SAP Triversity personnel conducted training for all of its store managers and district managers (DMs) as well as HR personnel. The training took place over two to three days, she says.

“SAP Triversity is a very good and smooth system. For people familiar with POS, it doesn’t take a long time to learn it — an important factor during the systems selection process. Triversity is user friendly and very intuitive. Although it’s a new system, as soon as they learn how to do it, they just fly,” she says.

As each store went live with the system, the store manager and a DM were on site to train and assist other employees. Additionally, the company engaged SAP Triversity’s help desk, which was of enormous help, she says.

Reaping the benefits of a new POS system
Already, the company is seeing major improvements in sales and efficiency. “We can do more business with fewer [employees],” she says.

Also, the company’s ability to capture and use customer information has increased by 150 percent. The system allows Kenneth Cole to break down sales information in a myriad of ways, including by store, by sales hours and by associate. “We can measure our transactions on every possible level,” says Gorinshteyn.

Additionally, the system allows for Internet access to the cash registers for up-to-date inventory counts. Because the POS system is still integrated with its legacy retail system, Kenneth Cole has not yet gone live with this process but will do so as soon as its SAP Retail implementation is complete, which as of this writing was scheduled for July.

Lessons learned, next steps
The most important lesson learned from its implementation process? “Blueprints are important,” Gorinshteyn says, stressing that there must be a plan, and the entire business must be involved and take ownership throughout the process.

Gorinshteyn also observes that challenges can arise from dealing with differences in the way that new systems support accounting, as well as allocation and pricing procedures. Because Kenneth Cole Productions brought its retail systems in house for the first time, the retailer had to map out some of the most basic systems processes and make them jive correctly with business processes — a task that was extremely challenging.

She also emphasizes the importance of testing interfaces to ensure that they work correctly. Finally, she says, skilled resources are crucial. The company had to find a balance between adding people with new abilities to its staff and training current employees to use and manage the system. Employee continuity is a major plus, she adds.

As it draws closer to completing its multi-stage implementation, Kenneth Cole is already in discussions with SAP about the “strategic next step in our landscape,” says Gorinshteyn.
The company is looking at SAP’s Apparel & Footwear Solution (AFS), Human Capital Management (HCM) and also considering systems for product data management/product lifecycle management (PDM/PLM), customer relationship management (CRM) and supplier relationship management (SRM).

“We’re seriously looking at AFS because even though our wholesale system is up and running and is not such a point of pain as the retail systems were, we’re really looking at SAP as a strategic partner, and integration between retail and wholesale is business critical for us,” she concludes.

Jordan K. Speer is senior editor of Apparel. She can be reached at jspeer@apparelmag.com.