In-Depth

Nordstrom Selects Infosys To Implement Cost-Effective Y2K Solution

• 11/01/1998

Nordstrom is one of the nation’s leading fashion specialty retailers, offering a wide variety of clothing, shoes and accessories for the entire family. Founded in 1901 as a shoe store, and headquartered in Seattle, Nordstrom operates 67 full-line stores throughout the United States with the most recent store openings in Ohio, Georgia and Kansas. In addition, the company also operates 23 off-price stores called The Rack.

Nordstrom has long been recognized for having an outstanding reputation for providing quality merchandise and superior customer service. This commitment to meeting the customer’s diverse needs has enabled Nordstrom to open about four-to-five stores each year across the nation. Nordstrom also offers merchandise via its Web site, where a personal shopper is available to assist customers in locating brands and styles that suit their specific needs.

Nordstrom is also very entrepreneurial. Management is directing the company to ever greater achievement and to embracing new technologies. Nordstrom runs its Merchandising, Reporting and Inventory Management on three mainframes and is migrating other key applications, including SKU Sales to its client/server platform.

Charlie Mitchell is Vice President and Co-Director of Business and Information Technology Services (BITS). His group consists of 400 people, ranging from database analysts to operations and network managers, production services and systems development analysts. They are responsible for application development, legacy systems, data communications, telecommunications and infrastructure. Mitchell’s team has the mandate to align corporate IS with Nordstrom’s business goals – and to take business initiatives and translate them into a business strategy. According to Mitchell, "We are always looking for new business processes, new ideas new and ongoing projects to make Nordstrom a better and more productive organization."

Over the years Nordstrom had always augmented its in-house staff with contract employment to take the "peaks and valleys" out of its software development process. When, in 1994, a large benefit system project presented itself, the company considered the possibility of utilizing offshore development for the first time. The benefits project, initially planned for in-house development, ran into overruns and delays. Existing internal resources were not adequate to do the application development within the time frame that users demanded.

The BITS team wanted a pool of highly qualified people to contract with on an as-needed basis for projects, such as this initial benefits project. The team began looking at several organizations offering offshore application development and maintenance, ultimately deciding on Infosys Technologies Limited of Fremont, Calif. The Infosys staff performed the functions Nordstrom needed, from detailed specifications and coding to testing and implementation. In less than 15 months, the project was completed.

The second project involved PACBASE, a CASE tool developed for the Merchandising department. It allows the analysts to do data modeling and write structured code which, in turn, generated COBOL code for batch and CICS for online programs. Infosys’ staff was actively involved in learning PACBASE and providing the expertise required to complete that project. In 1995, the third project utilizing Infosys staff was started; it consisted of developing a corporate data base system in DB2 with coding done by Infosys.

Like all major retailers, Nordstrom is concerned about its daily sales and returns data. With the assistance of Infosys staff who designed and then coded the application, Nordstrom created an inventory management system called SKU SALES. As sales are rung up all over the country, information is transmitted to an audit system which updates the SKUs. A second system tracks receipts and passes that information to the SKU system. This allows Nordstrom managers to have instantaneous access to sales information, enabling them to judge the performance of product lines and to forecast future inventory needs. It also provides management with historical data about sales, receipts and inventory of all the items sold within any store within a period of two years.

In 1996, Nordstrom began documenting and addressing all issues related to the Year 2000. Based on the success of previous projects, the BITS team again decided to pursue offshore development to complete this mission-critical project. It was decided that Nordstrom’s staff would design a process that would allow them to "packetize" an application, 100 programs at a time, and ship it electronically to Infosys where the problem could be fixed within a controlled environment. "Infosys is very disciplined in its approach and methodology," stated Mitchell. "Their project management helped us to be more disciplined."

Infosys' In2000 conversion service is executed through a combination of offshore and on-site project management. The offshore team provides the software design, testing and conversion activities, while the on-site team focuses on customer interaction, integration and acceptance testing. In2000 uses a PC tool-based approach, as well as using third party mainframe-based tools. The conversion is done offshore, in phases, leading to cost reductions of up to 60 percent.

The scope of Nordstrom’s Y2K project includes converting 20 applications and more than 2.5 million lines of COBOL. All mainframe applications - from the ordering system to SKU Sales, from Credit to Reserve Stock - will be Year 2000-compliant by August 1998. Since the BITS team made a decision to define and implement a separate stand-alone platform (a duplicate environment), all software can be date tested to ensure that they perform flawlessly - and that applications installed on top of them also perform as appropriate. Once testing has concluded, the company can place the applications back into production.

In a business where making the customer happy is a primary objective, Mitchell considers Infosys a partner he can trust - and with whom he can enjoy a long-term relationship. According to Mitchell, using an offshore vendor for Nordstrom’s projects has been a prudent business decision. "Infosys has enabled us to maintain development quality and consistency - and at a price tag that just made good sense," he concluded.

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