In order to keep up with demand for beer on hot summer weekends, The Beer Store relies on analytics provided by its managed services provider. The company just signed a five-year multi-million dollar deal with NCR to provide managed services for its multi-vendor IT environment, which is a renewal of a past contract.
With 441 stores across Ontario, The Beer Store serves as the primary sales channel for beer in Ontario. It also has six major distribution centres in the province, servicing 17,500 licensed bars, hotels and restaurants and 600 government-owned retail outlets.
The Beer Store turned to managed services in part because it was geographically challenged. “We’ve got stores in Marathon and Red Lake and places that are closer to Winnipeg than they are to Toronto,” said Glenn Wood, director of information services with The Beer Store. “So providing as much as possible a consistent level of service is pretty challenging.”
There are pros and cons to managed services, he added, but at the end of the day it needs to work for both parties. “You need to go into that with your eyes wide open,” he said. “You’re having to manage a partner as opposed to managing your own resources, so there’s that aspect you need to understand going into it. If you’re managing those people internally then there’s a cost to doing that as well.”
Using managed services provides consistency of coverage across the province and allows the company’s IT team to focus on more strategic projects. The first-level help desk for all of its stores and distribution centres is outsourced to NCR. If a problem is hardware-related, NCR provides the fix for all locations – anything from a receipt printer to a server to a piece of networking equipment.
The Beer Store also tracks response and resolution times. “If we have a store down because of a server, then we expect a quick response/resolution,” he said. “If we’re down we’ve got unhappy customers — we’re unhappy, everybody’s unhappy.”
A dedicated NCR Service Management Office generates ongoing service analysis, which is managed by an NCR executive services manager. The SMO produces a variety of detailed monthly reports, which help pinpoint trends that can cut costs, provide better service and keep track of its IT infrastructure.
“We’ve got some fairly old pieces of technology behind the counter that you don’t see as a customer – that stuff in some cases is getting eight, nine, 10 years old,” he said. “We look at trends and we can proactively manage where that’s going and make some smart business decisions.”
This 10-year relationship has grown into what is now called managed services, said Patrick Leonard, vice-president of NCR’s Retail Solutions Group. “The longer we’re working with them, the more data we get, the more information we’re able to mine for them and the more costs we’re able to drive out of their business.”
But he doesn’t describe it as an outsourcing arrangement. “With outsourcing, the customer does not keep control of their IT infrastructure,” he said. With managed services, the customer maintains its core IT group to do strategic planning, but takes advantage of NCR’s services infrastructure.
Managed services is suited to enterprises with more than 300 locations, he added, who are talking about cost rationalization. “Ultimately you look back to your core competency,” he said. “Unfortunately IT is a cost of doing business. The strategic side of IT might be but the actual day-to-day delivery of it really isn’t.”
The adoption of managed services five years ago was slow, but Leonard says NCR is now in discussions with all of its customers about it. “Once internal IT people get over the fear they’re going to lose their jobs,” he said, “this becomes very strategic to them.”