Rise in consumer spending drives City Mart’s digital transformation

THANKS TO THE significant rise in Myanmar’s consumer spending last year, City Mart Holdings Limited (CMHL), the nation’s top retailer, has embarked on virtualising its digital infrastructure in cooperation with VMware Inc, a global enterprise software provider.

Arnel Redondo Reyes, head of information technology at CMHL, said at a press conference on Thursday that the firm would continue investing in its digital transformation process to ensure better services for customers.

“The consumer goods sector becomes an extremely important and integral part of Myanmar’s economy, and is expected to grow significantly this year,” he said, citing the market is estimated to be around 15 per cent of the nation’s GDP or US$7.5 billion.

Driven by consumer spending which is projected to triple from $35 billion to $100 billion by 2030, the firm has planned to invest around $10 million for its digitalisation process which includes covering telecommunication costs, maintenance of the equipment, payment for licence fees of the softwares deployed, and other related expenses. Part of the investment goes to its strategic partnership with VMware, he said.

On the business challenges, Reyes said, “We felt that our legacy IT infrastructure was holding us back as we struggled constantly with downtime. The inventory management system would crash and the server would be down for 1.5 days while they scrambled to restore from backups. Our IT was impacting our revenues.”

He said downtime of up to 1.5 days adversely impacted the firm’s revenue, as it resulted in supply chain issues and unfulfilled customer orders.

“We set about modernising our IT infrastructure to support the entire network of our stores. We deployed the VMware vCloud Suite with hybrid cloud management platform. This allowed us to consolidate servers and data centres and improve application availability and performance,” he said.

Established in 1996, the firm currently has more than 8,000 employees in over 180 branches across the nation.

Reyes said investing in a software-defined infrastructure and automation of core IT processes was a critical move which paid off immensely.

“The move removed server downtime and cut operational costs by up to 50 per cent. We could also leverage predictive analytics and smart alerts to improve system performance,” he said.

According to Reyes, the retailer will continue to work with VMware so it can migrate all business operations onto a centralised SAP system within two years.

He said the partnership would help City Mart eliminate system downtime, thereby improve responsiveness to demand by rolling out new products faster and deliver better customer service.

“As our customer base expands, our infrastructure needs an upgrade to support the scale and breadth of our operations. Deploying VMware’s cloud infrastructure solutions empowers us to break through the next frontiers in retail,” he said.

To him, the partnership helps the retailer ensure goods are in stock at all times, resulting in better warehouse management and stronger relations with suppliers.

“With the help of VMware’s technology, we can easily know how many goods have been sold out and how many are left in the warehouse so we can supply all the best-selling goods before they are out of stock. We can also see how much a store can sell, which stores are selling what, etc. It is really helpful to our management,” he said.

Sanjay K. Deshmukh, VMware’s vice president and managing director for Southeast Asia and Korea, said businesses need the right network foundation to harness and flex new technology.

“Consumer demand and preferences are evolving rapidly in today’s retail sector, especially in a fast-growing economy like Myanmar,” he said. He added City Mart would seize opportunities and gain higher returns through its investment on virtualising IT infrastructure.

Tuntun Linn, VMWare’s country representative for Myanmar, said the technology could ensure better services for enterprises.

“Virtual machines can move from one physical machine to another. For example, imagine there are data centres in three cities_ Yangon, Mandalay and Mawlamyaing. Even if a data centre in Yangon is down, this application can move to another data centre in a different location. So, the service is never interrupted,” he explained.

Source: Eleven Myanmar

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