InformationWeek

In January, Staples Inc., a $9 billion office-supplies retailer in Framingham, Mass., officially revealed a multiyear contract with ICL. The service provider is managing in-store computer configurations and installation and support services for Staples' 800 stores nationwide, as well as for 150 locations in Canada and 120 across Europe.

ICL works with in-store Staples teams to ensure systems integration as it installs and maintains everything from back-office servers to point-of-sale terminals, payroll clocks, printers, and even cash registers. Configuration and installation services include project and rollout management, site surveys, hardware integration, software replication, staging and installation documentation, cabling, and related tasks. The contract also includes installing kiosks, which let customers order special products online, and setting up the Ship Center, a special area in stores that provides packaging and shipping services.

While neither ICL nor Staples will disclose the contract's cost, describing it only as "tens of millions" of dollars, or the project's impact on the retailer's IT budget, Staples CIO Brian Light says the effort is keeping the retailer at the head of the pack in an increasingly competitive market. "Our vision in the IS organization is to focus on that which will support differentiation of Staples vs. its competitors," says Light.

The competition includes not only U.S. market leader Office Depot and close contender Office Max, but also retailers such as Wal-Mart, emerging dot-com enterprises, and neighborhood mom-and-pop stationery stores. "We want to be proactive in identifying what we, as an IS organization, can deliver for the business as opposed to just being an order taker," Light says.

Staples and ICL are longtime partners. ICL plugged in the retailer's first point-of-sale equipment when the first store opened in 1986 in Brighton, Mass. At that time, ICL was a computer equipment and POS manufacturer. The vendor solidified its services relationship by hitting every store-opening deadline in the ensuing 14 years.

Now a wholly-owned subsidiary of Fujitsu Ltd., ICL has evolved into a full-blown service provider, designing and maintaining POS and back-office systems that incorporate different software and hardware. Operating in more than 40 countries, ICL has 22,000 employees worldwide, of which 1,500 are based in North America.

According to Staples, ICL's track record, familiarity with in-store infrastructure, experience with a plethora of hardware and software products, and its global reach helped ICL beat out several strong contenders, including IBM and NCR, all vying to sign on as Staples' "soup-to-nuts" in-store provider. By letting ICL handle the mechanics and all the dimensions of installing and maintaining store systems, Staples' IT unit can focus on strategic business-related technologies, says Nancy Daniels, ICL's senior VP of E-infrastructures.

"A lot of people talk about total cost of ownership, but many play lip service to it," says Daniels. "People often get involved and then make the mistake of focusing on the bits and bytes, and they start counting the pennies. They miss the forest for the trees. Staples had a clear, forward-looking vision from the start, took the time to look at this holistically, and now they're reaping the benefits."

The primary benefit, says CIO Light, is that his 680-member IT staff is developing new technologies, such as in-store Web kiosks and electronic-signature capture, as well as conducting PC and platform upgrades. These projects likely would have been delayed if Staples hadn't gone with the outsourcing partnership to handle the store installation workload. The in-store kiosk project, which gives store customers access to the Staples.com Web site, is a strategic business goal since it lets customers access items not regularly stocked in stores, says Light.

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