Welkoop: Future-Proof IT Landscape with Dynamics 365

Welkoop is an ambitious company striving for a strong omnichannel strategy. To achieve this, it was necessary to replace the core applications that were outdated, maintenance-intensive, and heavily reliant on customization. "The fuse box of our IT landscape needed urgent replacement," says Rob Kuster, CFO of Welkoop. Therefore, Welkoop initiated Project Base and engaged HSO for the implementation of Microsoft Dynamics 365 Finance and Supply Chain. A solid partnership proved to be the basis for success in this project!

Welkoop, once started as an agricultural cooperative, is the leading brand for garden and pet supplies. The company has 153 stores throughout the Netherlands, along with a successful online shop. 2020 was an exceptional year for Welkoop as well. Rob Kuster joined as CFO in mid-2020. Looking back, he acknowledges that the stores flourished, partly due to the COVID-19 pandemic. Rob says, "In 2019, we already saw accelerated growth, and the pandemic gave an extra boost to that momentum. Immediately after the lockdown in the spring of 2020, we saw an increase in revenue. People were suddenly confined to their homes, and with good weather, they enthusiastically started working on their gardens, as well as pampering their pets. Many people stayed home during the May vacation, and trampolines, for example, sold exceptionally well. The positive trend continued during the summer vacation, both for garden products and specific categories like swimming pools and barbecues."

However, this growth exerted additional pressure on all systems. Rob explains, "Our e-commerce channel had outgrown its capabilities for some time, so we were already in the process of opening a separate distribution center for it. However, we had to put in extra effort this spring!"

Achieving a successful omnichannel strategy is a crucial objective for Welkoop, and a flexible and future-proof IT landscape is indispensable for that. Dynamics 365 Finance and Supply Chain Management have been chosen as the central components. Surrounding these, the retailer employs various software and applications for order management, inventory control, and promotions, among others.

Rob emphasizes, "Naturally, we want our IT to help us improve customer service and increasingly support our stores. Moreover, the system must be future-proof to realize our omnichannel strategy. But to achieve these goals, it was necessary to first address the foundation, which is why we initiated Project Base. Ensuring the continuity of our core applications was a top priority because we were working with some old systems for finance and logistics, which we wanted to replace entirely with Dynamics 365."

Rob: "Project Base was divided into five phases. Firstly, we built the portal, which currently manages our assortment. Then we proceeded with the implementation of Dynamics 365 Finance. However, the project entered a challenging phase. Although progress was being made, we noticed that the vision and drive within the organization and the project team were diminishing. The turning point came around mid-2019 when Welkoop welcomed a new management team that fully supported the project. Such sponsorship from the management is essential for a project of this magnitude. We made changes in our project team, and HSO also appointed a new project leader and representatives to the steering committee. This fresh perspective and collaborative approach were truly needed to get the project back on track and improved."

"Through a joint analysis, we discovered that there was an incomplete understanding of end-to-end processes. Together with HSO, we mapped the processes much better. This revealed that substantial savings could be achieved on the customizations, which we initially believed to be necessary."

"Given the complexity of integrating all systems, more knowledge about the interfaces was required. They were often built based on trial and error. At that point, HSO proposed a new approach. We took more time to design, build, test, and only then deliver, following a more traditional project approach."

Rob: "After the implementation of Dynamics 365 Finance, it was time to implement Dynamics 365 Supply Chain Management in two phases. First, we set up the logistics processes for deliveries to stores via our distribution center, and finally, we tackled direct deliveries to the stores. Both projects went well. Our goal was to be live before the move to our new distribution center in Apeldoorn, and we achieved that. It's an enormous achievement for the entire project team."

Like in any IT project, project Base also faced its fair share of challenges. Some of these challenges involved interfaces and integration, ensuring the smooth flow of information through the system. Rob explains, "Before going live with Base Release 4, which focused on logistics for store deliveries via our distribution center, we encountered performance issues. The system couldn't handle the processing of all orders at the end of the day for pick-orders during overnight order processing. HSO relied on Microsoft's support for this issue, which required considerable effort to expedite with Microsoft. As a result, we postponed the go-live by one week. However, we are glad that we made that choice at the time and that HSO ultimately resolved this issue smoothly. The risk was too significant to go live."

Rob expresses, "The collaboration with HSO has been very pleasant. I personally value openness and transparency, and I expect the same from our partners, even when the project encounters difficulties. There were moments of tension during this project, such as when we experienced performance issues. We witnessed and experienced the dedication of the team, which instilled a lot of confidence. HSO has certainly built that trust."

"I am pleased that this phase has now been successfully completed. After all, it was necessary to establish a solid starting point to progress with designing and implementing a future-proof and flexible application system. We are currently in the fifth and final phase of the project, where we are migrating a few remaining smaller streams. I would compare it to replacing a fuse box. That has been done, and now we can take further steps."

"At present, we are exploring the future, considering what we need to realize our strategy. For example, what should our Product Information Management (PIM) system look like in the future? We are engaging in discussions with various parties, and we have valuable discussions with HSO as well."