In the picturesque city of Ely, famous for its 900-years-old cathedral, very modern solutions for electrical retail have been developed by Cromwell Business Systems for the last fifteen years. Set up in 1991 in Halifax, Yorkshire, the company originally designed business applications for 30 consumer electronic retailers.
In 1993/94 the business was sold to new owners who decided to create a new system which evolved into the current application, Open Retail. In 1995, the product was launched at the ER Trade Show. The system proved very successful and the company went from servicing 40 to 160 clients over the next two years. The following decade was spent developing the product.
What is Open Retail?
Open Retail is a very comprehensive EPOS system specially designed for the consumer electronics sector (which includes brown and white goods), providing a complete set of IT solutions for all the operational and management requirements – from stock control, warehousing, distribution and e-commerce to reporting.
Sonu Kundi explains: “It started from classical retailing but then our clients needed a mail order facility so we developed the mail order side of Open Retail. Next we provided an insurance replacement side of it. More recently e-commerce came along, hence we developed an e-commerce platform. All these channels are managed from one application – one core database.
“Many people claim to have a multi-channel IT solution, but in reality they just bolt-on different things onto one system. In our system, the customer services all these channels from one product database.”
The scale of CBS’s operations is impressive: “Over one billion pounds per annum goes through our IT platform in 550 shops, and 3,000 people (terminals) use our software at any one time.”
What is special about Cromwell’s Systems’ product?
“It is our immense knowledge and understanding of consumer electronics which makes us stand out in the market,” says Sonu. “Whether the customer is involved in rental, credit, service, maintenance etc – we have expertise to help them. It is very difficult for a generic IT service provider to prepare a system for the CE market on account of its complexity; it is so different from any other form of goods or services retailing.”
Moreover Cromwell Systems is focused on the independent electrical sector, and many of the leading independents are already its clients. “Our customers benefit from the experience we acquire servicing their colleagues in the market. They are effectively sharing the knowledge, as we take their ideas and put them into new software solutions,” stresses Sonu.
In 2002, the company decided to extend the range of their services. It started providing networks for its clients, managing Internet access and their email systems. “Now we provide almost everything from the IT perspective that our customers may want. We also took an important decision – where to host the applications. Now we deliver the applications to our customers from three data centres: two in London and one in Cambridge. In fact, 20% of our revenue are software, the rest is the other services, although the software is the glue that binds everything together,” explains Sonu.
“Most of our customers want to stick with what they are good at: selling the latest consumer electronics to an increasingly demanding public. They leave the rest to us: problems with the systems, viruses, software and e-commerce transactions conducted 24/7. We have people working round the clock who help them when problems occur. We say to them; your IT problems are our responsibility – giving them peace of mind.”
The company’s customers are the retailers selling brown and white goods – mostly in the UK, some in Ireland and a small number based there – linked to the English troops in Germany; some 70 companies in total. They range from retailers who have one shop with £1-2million turnover to companies with over 40 stores located throughout the UK. The major clients are multiple-channel businesses; with high street outlets, but also operating a rental base, service, repairs, e-commerce, and mail order.
Some 35% of them have e-commerce operations. However, Sonu stresses that many of them use e-commerce to promote their core retail service.
The most significant recent development for the company was the move from a character-based interface towards a Window-based system. “The new product called Orpheus contains every aspect of Open Retail system and has many new benefits. The Window interface facilitates significantly the usage of the system. Moreover, Open Retail was a keyboard operated application, while Orpheus operates through touch screen applications,” says Sonu.
“Our focus is now on Orpheus which is giving our customers much greater functionality and simplicity of usage. Moreover, this system uses graphical images of all products, which is particularly important for selling accessories.”
Over the next few months, Cromwell Systems will be converting its customers from Open Retail to Orpheus. “We are running training sessions and are encouraging our customers to share their experience of the system. We’ll also host an online forum so the customers can exchange their views and experience of the new system. It is going to be supported by a customer incentive scheme. We’re also going to promote the system through a large direct mail campaign and support this with press advertising.”
Costs and benefits
Finally, I ask Sonu about the cost of their services, which to a significant extend determines their accessibility to the indies.
Sonu believes this aspect is closely linked to the expectations and the attitude of the retailer. “For the customers who are frustrated dealing with every aspect of their business, including web operations and viruses on their IT applications, Cromwell is an ideal solution and good value.
“Any IER readers regarding an IT solution as a necessary evil should just buy an off-the-shelf system. On the other hand, if they need a management solution which would make their operations more informed and efficient they should come to us.
“The cost of the system would depend on the size of their operations. In Britain, the expenditure on the IT solutions across all industries is between 3-5% of turnover. Our customers have on their systems an inventory worth between half a million to £40 million. How important is the piece of software that operates such stock?”