Change Management is a Constant Process

CIO Armin Roeseler explains how he leads the staff of membership-based consumer buying club DirectBuy through the acquisition of new technologies.

Armin Roeseler, DirectBuy, CIO

After four decades of success, the time had come. A modern business model for the modern business. With 400 corporate employees, more than 250,000 members, and more than 60 franchises, DirectBuy occupies an enviably strong and stable niche in the furniture, appliance, electronics, and home improvement business. But to continue growing, the Merrillville, Indiana-based company realized it needed to equip its business with the best of what digital had to offer.

Enter Armin Roeseler, who joined the company in December of 2013 to modernize DirectBuy’s digital and e-commerce infrastructure. “I was immediately struck by the fact that we had two physical data centers run by different companies on our behalf with no synergies between them,” Roeseler says. “They carried very high operating costs and ran on an aging infrastructure that needed to be replaced, but there was no budget to support that.”

Fortunately, Roeseler thrives when faced with a challenge. Within six weeks, he completed an analysis, developed a road map, and obtained board approval for funding a comprehensive migration of the IT infrastructure to a cloud environment that would eliminate DirectBuy’s physical data centers.

“The most compelling argument was a calmer, more productive workplace, with more attention devoted to direct support of business priorities and rewarding career opportunities than to fixing the problem du jour.”

Although it was a major, high-risk undertaking, the board was convinced by Roeseler’s projections: $1.2 million annually to run the old data centers versus $700,000 for the cloud-based system. Including additional short-term costs for a temporary overlap between the old and new systems and support from third-party experts, ROI was less than twelve months.

“The board heard the numbers for a fully virtualized system and it became a very easy decision to make,” Roeseler says. The project included virtualizing DirectBuy’s entire IT portfolio. This required intense planning and late-night sessions to optimize the company’s extensive collection of proprietary legacy applications so that it could communicate in the new environment. In less than ninety days, the migration was completed on time and on budget.

As a result, IT is now able to focus exclusively on business applications and functions with administration handled by third parties. Additionally, resources are dynamically allocated and provisioned to meet real-time demand in as little as fifteen minutes; the old, manual system could take up to six weeks. Roeseler’s work has made DirectBuy’s website up to five times faster, and online purchases have grown to 60 percent of the company’s merchandise sales.

Inside DirectBuy’s club locations, new point-of-sale software has drastically increased order accuracy with POS data encryption preventing hacking by meeting EMV standards for interoperation of integrated circuit cards. Additional embedded security was implemented to support all medium- and high-level PCI compliance standards for the first time in DirectBuy’s history. Cloud-based IT has provided the foundation for a new business intelligence function, new ERP and CRM applications, consolidation of the telephone infrastructure, and support for a VoIP network. “My business users are most excited about the business intelligence, but it’s the transparent IT infrastructure that makes everything else possible and gives us a key competitive advantage,” Roeseler says.

As challenging as the migration of technology can be, the tough part is often changing the culture and persuading staff to adopt new expectations. Roeseler found that DirectBuy IT personnel were more than willing to evolve along with the technology once they understood the benefits it would provide.

Roeseler admits there were no guaranteed outcomes, but the department was tired of crisis management and having to make repairs at two in the morning. “The most compelling argument was a calmer, more productive workplace with more attention devoted to direct support of business priorities and rewarding career opportunities than to fixing the problem du jour,” he says. Now that DirectBuy’s technology has moved from the 1970s into the virtual universe, the company appears to be positioned for yet another forty years of success.