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Grocer's struggles prove valuable to retailers

Canadian grocery chain Sobeys struggled with its first implementation of SAP for Retail in 2000. Sobeys' struggle helped other retailers learn valuable lessons to avoid failure.


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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.

We spent time talking with Sobeys, because they were not satisfied ... We wanted to educate ourselves.
Doug Caldwell,
chief technology officerIndigo Books

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.

"We spent time talking with Sobeys, because they were not satisfied [at that time]," Caldwell said in a presentation at SAP's Sapphire user conference. "We wanted to educate ourselves."

Indigo wanted to strengthen communication over the supply chain and improve profitability and internal processes to increase customer satisfaction in its 260 Canadian stores.

"We were running Retek 6.5. We called it Chop-tek," Caldwell said. "The cost of maintenance was significant."

After evaluating other vendors, Caldwell said, the choice to go with SAP was clear.

"We took a look under the covers at the technical platform," he said. "The others [were messy]. When we looked under the covers at SAP, we saw an elegant architecture in terms of how it was developed."

They decided to implement it in 2002 and went live in May 2004 after a 15-month implementation. Indigo has been up and running successfully for over a year.

Caldwell recommends taking advantage of SAP's Early Watch program, which can detect signs that the system is not running as it should. The dashboard-style program produces reports that might indicate if there are problems inherent in the system itself, Caldwell said.

"If I had it to do over again, I'd keep the project manager around for a little while, a quarter," Caldwell said. "We were too focused on our budget [to do so], but if I had it to do over again, I'd budget to keep around key resources."

Many other enterprises, including Wawa, Oreck Corp., Wickes Furniture, Fossil and Brookshire Grocery Co., also attended Sapphire to talk about how they are working with SAP to meet their needs in the retail space. For such large retailers, the question was not whether or not to replace the merchandising platform, but when.

A Brookshire Grocery Co. executive said research is an important phase for these retailers, and he believes that his research would have been easier if there were more businesses operating SAP for Retail.

"The next set of retailers [implementing] will be in a better position," he said. "We had to go to Switzerland and Germany to see [the system in operation]."

Related news:
Canadian retailer gets SAP turnaround 

A group from Officeworks, a stationery supply company, even traveled from Australia to Sapphire get some answers about SAP for Retail. Officeworks is anticipating an upgrade of its system from SAP R/3 4.6 to SAP R/3 4.7 Enterprise.

"We're going to be doing something similar," said Debra Etheridge, finance process and systems manager for Officeworks. "[And] we always have concerns. Nine months is a long time [to implement], and that concerns me."

Overall, executives at Sapphire agreed that SAP was a match for their industry, and many seem particularly excited about the Mendocino product announced three weeks ago at Sapphire in Copenhagen, Denmark.

Mendocino, a joint product with Microsoft, combines SAP and Microsoft Office functionality, giving significant benefits for retailers using elaborate Excel files to manage store data.

SAP's skill lies in its ability to manage this data and improve business processes, said Clinton Keay, Sobeys' chief information officer..

"Retail is detail," Keay said. "Everyone likes to talk high level, but detail can't be overestimated."

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