Donna Karan International CIO discusses challenges of change management.
For any organization, updating or implementing an enterprise application is a daunting task. Donna Karan International Inc.s Carol Knouse is facing that challenge and more as the company seeks to update many of its legacy systems and integrate new technology. This is all part of a quest for faster time to market, a companywide mandate that includes the IT departments deployment of new systems.
Knouse, senior vice president and CIO of the fashion company and an eWEEK Corporate Partner, recently sat down with eWEEK Labs Director Jim Rapoza and Executive Editor Debra Donston in Knouses New York office to discuss the challenge of prioritizing IT projects and the importance of effective dialogue between the IT and business sides of the company.
What do Donna Karan Internationals back-end and desktop systems look like?
On the desktop, we use primarily [Microsoft Corp.s] Windows 2000 and Office. Were also [an IBM] Lotus Notes shop, which has probably saved us from the recent raft of viruses. Were an AS/400 shop, so we use the DB2 database, but some of the products were looking at use [Oracle Corp.s] Oracle or [Microsofts] SQL Server databases.
Our ERP [enterprise resource planning] system is an older system, not Web services-enabled. Weve got some time to figure out what to do about it, but the issue is that weve modified it too much.
Are you looking to migrate to something else?
Were trying to decide what to do right now; weve looked at the latest version, and were also looking at competitors.
We are also in the middle of putting in a new product development management package, which manages the front end of the apparel processwhat we call the preproduction process.
What is your biggest challenge right now?
Trying to catch up. There have been a lot of changes in the organization over the last year or so, which is driving the need for technology. Youve got some new people on board in the various brands who are very technology-savvy, and they want tools for visibility across the supply chain that we really dont have. So just to try to catch up in that area is very difficult. Theyd like to have technology to support the season that has just started, and thats impossible. In the case of, especially, ERP, which touches so many people, it just doesnt happen overnight.
The other big challenge is managing the expectations of senior executives and how quickly we can effect change. I think the one thing that is on my side is that I have an extremely good relationship and rapport with all of the senior executives. Although they may not always understand how long it takes to get something done or how painful it can be, theyre there and involved.
Even though I would only own a part of it, another big issue is the whole aspect of change management in the company. As we put in new technology, were going to have to dramatically change the way we handle some of our processes, and thats going to be difficult.
How do you work with the senior management team in explaining the benefits of a new system vs. staying with the old one?
Ive been in this business for over 32 years. I started first as a systems programmer, working on mainframe operating systems, but I realized thats not where I wanted to be, that I wanted to be involved in the business. What Ive explained to [senior management] is that Im not any different from the person who heads up human resources, the person who heads up finance. Im a businessperson who happens to have an IT discipline. Because I can talk about business and not put things in terms of technology gobbledygook, Ive been able to establish that relationship, and they trust my judgment.
What technologies are topping your priority list?
We are looking at doing an employee portal. There are stand-alone products out there, and there are also portals built in to many ERP applications. Since we plan to upgrade or replace our ERP system, a decision on portal technology will be made once we have all of the facts.
One of the other areas we need to address is our reporting capability, partly because reporting out of the legacy systems is a real issue. So, data warehousing is going to be on our list, and we also need a document management system.
Is there any legislation, or are there regulations driving this?
Sarbanes-Oxley will affect us, but we wont be subject to Sarbanes until at least 2005. But thats going to have an impact on us, and it is one of the reasons why I want to replace or upgrade the ERP system. The [Uniform Code Councils] Sunrise 2005 initiative [for longer bar codes] will also impact us: If you do business globally, you need to be able to handle the European Article Number and the Global Trade Item Number by the beginning of 2005. Of course, next will be the Electronic Product Code, in preparation for [radio-frequency identification].
What about your Web presence?
Our Web sites were designed to attract and retain our end customers via a look at our latest designs, providing information about style and some fashion special features. We dont do any e-commerce. If you look at the DKNY site, theres actually a "shop" button, but our products are offered through eLuxury.com.
What about extranet functionality?
The product development management [PDM] system were implementing is a collaborative piece of software, so our vendorsour domestic and international factoriescould get into that system and enter information such as ship dates to enhance our event tracking. Whatever we do with the ERP side will also have a collaborative capability. Thats a huge necessity for our visibility.
The PDM system is a powerful repository where everything is kept, so when design starts to create, sketches will be stored there; potential types of fabric, trim, every specification about the apparel of a season will be stored in that system. That system will create what we call a tech package, which goes to the factories and tells them exactly how to make a particular garment or accessory.