Canadian retailer gets SAP turnaround

Canadian grocery chain Sobeys is giving SAP for Retail a second try, but executives remain mum on the store's first SAP system, which caused major headaches.

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SearchSAP.com's Editorial Team was out in full force at Sapphire 2005 in Boston. Find out what you may have missed in these exclusive news articles and one-on-one interviews with top SAP executives and conference attendees.

BOSTON -- Retail was the Prince Charming of this year's Sapphire convention, and users learned throughout the week that retail success lies in how you can leverage the module to meet industry-specific needs.

In the end, the businesspeople felt that this was their upgrade, not ours ... That, to us, is success.
Clinton Keay,
CIOSobeys Inc.

For Stellarton, Nova Scotia-based Sobeys Inc., however, SAP for Retail has destined a different type of fairy tale.

Sobeys was forced to take a $50 million Canadian write-down after its SAP system crashed in December 2000, leaving many supermarket shelves bare before Christmas, according to news reports.

In early 2001 the company, which had previously been an SAP reference account, dumped SAP.

"The bottom line is that SAP was not going to create a sustainable systems solution for this organization," Bill McEwan, Sobeys president and CEO, told Canada's National Post in 2001.

Five years later, attendees at SAP's annual Sapphire user conference learned that princes sometimes get a second chance.

Grocer's struggles prove valuable to retailers

BOSTON -- Canadian grocery chain Sobeys highlighted its recent successes with SAP, but its struggles were an equally important lesson for other retailers looking to implement SAP for Retail.

Doug Caldwell, chief technology officer for Indigo Books, another Canadian company that recently completed a successful go-live, said part of Indigo's research involved talking with other companies running SAP for Retail.

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While Sobeys executives remained tightlipped about past problems, they discussed how they were able to successfully upgrade their SAP for Retail system, completed in September 2004. The upgrade took place in Sobeys' Atlantic division, the same division where SAP for Retail caused major problems for the company.

On the heels of an announcement that Home Depot will be operating its systems on SAP "whenever possible," retail executives, including Sobeys, tried to ease the fears of some attendees that SAP for Retail was a mediocre product and SAP was merely trying to make the shoe fit in the U.S. market.

While at least a few of the attendees knew of the company's previous struggle, Sobeys executives remained positive, saying they were impressed with the ultimate result of their latest implementation. The company completed an upgrade from SAP R/3 4.0B for Retail to SAP R/3 Enterprise for retail on IBM's DB2 database management system.

Sobeys CIO Clinton Keay stressed the importance of communication between the IT and the business side of the enterprise. Since Sobeys was able to open these lines, the upgrade ran more smoothly, and end users are excited about the system.

"In the end, the businesspeople felt that this was their upgrade, not ours," Keay said. "That, to us, is success."

Before going live with the upgrade, Sobeys went through a rigorous testing period, working virtually on the system to ensure that things were running smoothly.

SAP brought in consultants from Germany to work on performance tuning and pre-upgrade verification for Sobeys, and IBM consultants were also involved, Keay said. A critical part of the company's success this time around was that they had allotted three months of testing into the project timeline, he said.

"We do not want to risk going live with any problems," Keay said. "If we do not have a [necessary] patch of code, then we do not go live at the expected date."

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