What Tech Leaders Can Learn from JCPenney’s Innovative Approach to Retail Software Maintenance

The year 2021 was a time of change for many established retailers. For U.S. mainstay JCPenney, figuring out a way to affordably handle software maintenance had become a significant part of the transition process.

“IBM wasn’t necessarily innovating their technology,” JCPenney Senior Manager of IT Sourcing and Procurement Ashlie Dulan says. “So we were looking for a different solution.”

Dulan discussed the company’s post-pandemic retail software maintenance plan with Origina Executive Vice President of Strategic Global Accounts Brendan Walsh at the Gartner IT Symposium/Xpo 2024 in Orlando, Florida. Here are a few takeaways from their talk, including tips for companies searching for ways to get more value from their current technology.

Reevaluating Tech Supplier Relationships

Like many post-pandemic retailers, JCPenney’s story starts with a search for savings. The companywide charge to eliminate questionable expenses pushed Dulan and her procurement team to re-evaluate just what the company was getting from its tech supplier relationships.

“We were making a significant annual IBM investment and honestly questioning the value that we were actually getting from those investments,” Dulan says.

Around the same time JCPenney’s procurement team received its cost savings directive, they were notified of a pending IBM software license audit, which was particularly concerning for a business that was already doing what it could to reduce the financial burden this technology posed.

Vendor-Dictated Roadmaps Stand in the Way

IT flexibility and roadmap control had also become an issue for JCPenney. Stakeholders knew the company could use much of its current software indefinitely if not for IBM’s decision to stop supporting certain products and increasing support costs on others.

And in many other cases the company, which was still internally working through the details of an upcoming $1B reinvestment plan at that time, couldn’t be sure of its long-term goals for products until a later date.

Mere seconds of performance-related downtime can come at huge cost in retail, and the industry is the number one target for cyberattackers, so JCPenney couldn’t allow their established software to go unsupported. However, Dulan says, renewing every IBM agreement line-by-line would have locked the retailer into upgrade tracks and service contract timelines that would not suit its pressing need for flexibility.

“We wanted to be able to have flexible support levels,” Dulan says, adding that the company needed to be able to manage, maintain, support, and utilize its various product versions on the fly without “being forced to hold onto them.”

IBM Software Support from Two Teams

Ultimately, the company contracted both Origina and IBM simultaneously. This hybrid maintenance model allowed the retailer to keep concierge-level, expert support for products IBM no longer supports via Origina while still retaining access to OEM support for certain newer products in the estate. Origina also assisted on the retailer’s lingering 2021 audit notice, lending advice that turned the finding from a “big figure,” according to Dulan, all the way down to zero.

“It’s probably some of the most fun I’ve had,” Dulan says, referencing the ability to report the $0 audit figure. “That was so exciting.”

At the end of the day, the same hybrid approach helped JCPenney’s procurement team make a strong contribution to the company’s cost optimization goals and continues to grant stakeholders far greater flexibility as they decide what comes next for its modernizing technology stack.

Key Takeaways from JCPenney’s Win

From zeroed-out audit findings to more affordable support, JCPenney’s IT turnaround shows just how valuable questioning software vendor relationships and seeking alternate arrangements can be. If you’re weighing a move to independent software maintenance and support, Dulan’s experience offers several important takeaways:

• Get buy-in early. Dulan says the hardest part of bringing the plan together was persuading numerous tech- and business-focused stakeholders to sign off. Keep internal blockers at bay by explaining your rationale and spelling out benefits.
• Don’t let common tactics sway you. Predatory tech industry practices are prevalent in many business’s tech supplier relationships. If a suspiciously timed audit or price increase puts pressure on you, don’t assume you have to follow through a certain way because the OEM says you do. Seek outside advice before your company commits.
• Give yourself time to investigate options. The more time you have to shop around, the less leverage megavendors like IBM and VMware hold over the process. In Dulan’s case, investigating early gave JCPenney and Origina space to hammer out details of their pending service agreement without cutting into the time Origina needed to investigate the audit notice.

There are numerous businesses that question whether they are getting all they intended out of their large software investments. For those companies, Dulan’s final piece of advice is simple.

“Independent software [maintenance] suppliers deliver what they say they’re going to deliver,” she says. “I would be curious. Be curious about other companies and support organizations that you can go to and partner with.”

Retailers work best with tech vendors who meet their promises. Get our guide and take back control of your retail IT roadmap.