SAP: Pepsi's software for a new generation

PepsiCo Inc. likes the flavor of SAP's full Business Suite.

PepsiCo Inc. has selected SAP's full mySAP Business Suite to streamline its distribution and delivery processes, improve planning and forecasting, and give better visibility to its global supply chain.

PepsiCo, which manufactures, distributes and markets Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports drinks, Tropicana juices and Quaker foods, is aiming to better link its supply chain and inventory data with its customer data.

I'm sure they [PepsiCo] have a myriad of applications running today, and we'll continue to see this type of activity in the very large enterprise market.
Michael  Dominy
senior analystYankee Group

In a statement released this morning, PepsiCo said it will eliminate outdated legacy applications through a mySAP implementation. The new software will be used across the company's product groups.

SAP and Oracle have been in intense competition for customers in recent years. Welch Foods Inc. picked Oracle to be its global ERP provider in an agreement announced late last year. Now SAP has stolen some Oracle busines from beverage giant PepsiCo, which had been one of Oracle's premier customers since 1997.

Pepsi North America, one of PepsiCo's divisions, will drop Oracle, adding SAP's entire business suite, including its enterprise resource planning (ERP) software.

"I think this once again identifies SAP's dominance and strength in the consumer packaged goods and consumer foods industry, as they continue to expand significantly within that market," said Michael Dominy, a senior analyst on business applications and commerce with Boston-based Yankee Group.

Earlier this year, Coca-Cola Enterprises Inc. entered into a multiyear deal with SAP to connect information gathered by delivery drivers with the massive beverage company's SAP R/3 Enterprise software.

In another more recent win for SAP, Tyson Foods Inc., the world's largest producer of chicken, beef and pork products, chose the business suite to move its multiple legacy back-end systems, by standardizing its software with SAP. That announcement was made at SAP's international Sapphire customer event in New Orleans last month.

Under the deal with Tyson, the mySAP Business Suite is being used as a backbone technology, based on SAP's NetWeaver integration and application platform. In addition, the Springdale, Ark., meat producer plans to collaborate with SAP to introduce a food industry management application to handle multiple units of measurement.

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Large companies like PepsiCo have been working to standardize their internal software and systems in recent years. By eliminating legacy systems, companies reduce complexity of their current architecture, Dominy said.

"I'm sure they have a myriad of applications running today, and we'll continue to see this type of activity in the very large enterprise market," Dominy said.

SAP has been battling Oracle Corp. in recent years to lure large enterprises to its business suite. Following an intense competition between Oracle and SAP, Welch Foods Inc. picked Oracle to be its global ERP provider in an agreement announced late last year.

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