Grocer's ERP selection hinges on milk

'Got milk?' It was a decision between SAP and PeopleSoft, but for one grocer, selecting SAP's ERP suite came down to the price of milk.


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BOSTON -- For Tyler, Texas-based Brookshire Grocery Co., selecting an enterprise resource planning (ERP) vendor was a detailed and meticulous process.
[SAP] had the image of being high priced, inflexible and hard to implement.
John Franklin,
director of project managementBrookshire Grocery Co.

Executives were resistant to adopt SAP, considering the software too costly and hard to integrate with other systems. In the end, however, the fact that SAP could meet detailed needs meant the difference over then-rival PeopleSoft.

In a presentation last Thursday at SAP's Sapphire user conference, Brookshire's director of project management, John Franklin, spoke to other retailers about how his company selected SAP to run its business.

"It was a tough decision for us," Franklin said.

In the end it all came down to the price of milk.

Heading into the selection process, Franklin said, his company was afraid of SAP.

"We didn't consider SAP a viable option," he said. "They had the image of being high priced, inflexible and hard to implement."

Brookshire's main goal was integration, because the number of disparate systems was slowing the company's processes and interfering with the company's potential.

"We were restricting our company's growth," Franklin said. "We were barely keeping our head above water. It was clear to us we had to make a change."

Although a best-of-breed option was briefly considered, Franklin said his company moved away from that option since the company needed a unified system to cover nearly all business processes. Brookshire executives wanted an efficient ERP system that integrated all the business systems and the data warehouse.

Brookshire narrowed the field to the top vendors in the field, including SAP, Oracle Corp., PeopleSoft, J.D. Edwards & Co. and Baan. The company conducted in-house research and held meetings with independent analysts to learn more about the vendors.

"The analysts know much more about ERP than we did," Franklin said. "We left on a different page than we entered."

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Brookshire executives eventually narrowed the field and evaluated three vendors based on the functionality they showed during a three-day vendor demonstration. The company prepared a vendor scorecard rating system and assigned weights to each scorecard category. An impartial consultant was also on hand for this stage, and helped Brookshire analyze scores.

Brookshire's nine-member team then narrowed the list to two vendors, SAP and PeopleSoft, and made it clear that these vendors had to demonstrate success on Brookshire's own systems to win the account, Franklin said.

The Brookshire team distributed exhaustive conference room pilot scripts that were over 40 pages long, for a trial run that lasted five days.

When the decision was made, milk pricing was an integral reason PeopleSoft lost the account. PeopleSoft lacked the functionality Brookshire needed for milk costing and process management.

SAP impressed Brookshire with its milk-pricing capabilities, as well as other functionality, Franklin said. In addition to SAP's milk-pricing functionality, Brookshire was impressed with mySAP ERP's BW potential, as well as the company's commitment to retail.

"We wanted to see how they worked with our data," Franklin said. "[It makes] a huge difference to see how vendors can come to the table with standard systems without customizing. SAP did that."

The selection process took a year, more time than the implementation, which was 10 months long and ended with a successful go-live last October.

Representatives from Cobeca, a wholesale pharmaceutical company in Venezuela, listened to Brookshire's presentation as part of their own research in evaluating ERP vendors. Alexander Duarte, a consultant for Omicron Sistel C.A., who is working with Cobeca, said the pharmaceutical company plans to upgrade its ERP system since it has grown to more than 11,000 employees.

Based on what Duarte learned at Sapphire, Cobeca said SAP deserves careful consideration when making an ERP selection.

"Other vendors don't have the same vision," Duarte said. "SAP looks at everything … in a good way."

For Brookshire, at least, its ERP selection was affirmed in the details -- or the cost of milk.

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