Home Depot, Harrods discuss SAP for Retail

SAP for Retail customers discuss where SAP needs to improve in retail and where their retail projects get the most resistance.

NEW YORK -- In recent years, SAP has used the annual National Retail Federation conference as a place to showcase

its retail products. As part of its 2008 conference program, SAP conducted a customer panel that included two of its biggest retail wins -- Harrods Department Stores in the U.K. and Atlanta-based Home Depot. Home Depot's director of SAP technology, Matt Stultz, and Harrods' CIO, David Llamas, discuss their respective experiences with SAP for Retail.

Question: Where would you like to see SAP improve its retail offerings?

Matt Stultz: I think in a couple of areas on the application side. Enhancing the forecasting and replenishment solution that runs on the supply chain suite -- there is going to be a big push on that. I had a lot of experience in the manufacturing industry before I got to Home Depot, and SAP's advanced planning and optimization product started back in 1999 or 2000 and got very robust. I would like to see the same growth pattern for [SAP Forecasting and Replenishment]. It really makes a big difference for a company to streamline these business processes and integrate that into the existing SAP footprint.

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One other area is composite applications. I'd like to see SAP enhance its offering in the retail space with some composite applications. Home Depot runs a large tool-rental business. We would love to be able to implement a composite application out of the box and handle that part of the business rather than try to leverage 20% of this back-end SAP solution and 20% of that back-end SAP solution [on our own]. The development effort to go live with a solution like that can be rather large. The nice thing about composites is they allow you to implement [a system] like that with a lot of the services that will already leverage that back-end content.

David Llamas: Historically, I have to say one of the issues that SAP has with previous releases is usability, especially when it comes to things such as planning and people who like to work with Excel and Office tools. But I think that's something that SAP has been working on quite a lot. And I think that [SAP for Retail] is getting there in terms of usability.

The next step in the battle is going to be the business intelligence side. So anything related to product insight, customer insight, operational insight and performance management in an integrated fashion is going to be key. Now, SAP already has scenarios for that. I think that it's still a relatively immature market in some areas, so there's still a lot of implementations and a lot of learning we need to do. What is actually key to us is not only to get the solutions in place but to get a strong partnership with SAP so they help us implement these processes that are relatively new to the organization. So my request is not so much product related as it is to collaborate in these areas.

As retailers adopt SAP more and more, it would also be interesting to have more collaborative scenarios between retailers where we can integrate product information, perhaps centrally. I know there are companies trying to do it, but if SAP were able to put together some sort of solution, like a hub, that can facilitate integration for product data, and other things, that would be really helpful.

Question: What are the points of resistance you see with SAP retail projects, and how do you overcome them?

Matt Stultz: [Resistance] comes early and often on projects like this. One way to avoid a lot of pushback is to get your business folks in charge, committed and with "skin in the game" in this transformation. At the end of the day, they can manage pockets of resistance much better than anyone in IT can. So that's the strategy and mentality that has worked quite well for us. A lot of customers that have been successful with SAP over the last decade have learned that.

Home Depot is a big company, we have almost 400,000 associates. A lot of folks have been with the company a long time and have been doing certain things their way for 30 years. Then we come in and say we're going to change the way we do business. Of course, they ask, "Why? It's worked well for me and the company for a long time." So winning those hearts and minds is key. It's delicate, depending on where the resistance is, but I've found the most successful way, as I said earlier, is to have a process owner on the business side. He helped champion and drive the project. You're not going to be successful all the time, but that mentality will help you be successful more often than not.

David Llamas: One of the major points is obviously resistance to change, especially around three key areas. First are the users. They're used to working with applications that they know and feel comfortable with, so that's a point of resistance. Another one is resistance (sometimes) from the management team. As you begin to use SAP in some areas, that challenges management because it increases the visibility into the performance of the business. It's very difficult to be the director for a particular area of the business and be able to show that your area is not running as well as expected. So that's another point of resistance. Then the last point is your internal IT team. They are also used to particular technologies, so it's a transition that needs to be managed carefully.

I think that in all those three challenges, very often the solution is actually leadership -- how you influence the business, the users and your IT teams.

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