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SAP rings up a retail win

SAP claimed victory over Oracle in the match for one sporting goods retailer.

Sport Chalet didn't expect SAP to be one of the finalists in its search for a new software package.

When La Canada, Calif.-based Sport Chalet was developing requirements for its new software provider, SAP had yet to place the public focus on small and midsized businesses (SMBs) that it has today.

However, the final list did in fact include SAP, along with Oracle and others. Once finalists were selected, a request for proposals (RFP) process that involved detailed scoring and "conference room demos" began.

Oracle and SAP have been engaged in deepening competition in the retail market, going head to head for customers and acquisitions. Last year, after a well-publicized back-and-forth struggle, Oracle outbid SAP for retail software vendor Retek.

Oracle continued its acquisition spree in 2005 with the purchase of privately held ProfitLogic.

SAP struck back with an acquisition of its own in November 2005 -- retail lifecycle price management (RLPM) vendor Khimetrics -- and has recently upped the ante with a midmarket push that includes a pricey ad campaign.

Point by point, Oracle was very close to SAP on Sport Chalet's list.

"We did a very thorough job with the RFP process. We defined the most important internal processes and had vendors demonstrate how they could handle them," said Howard Kaminsky, chief financial officer of Sport Chalet.

"Oracle's Retek is a proven retail system, so from a merchant's perspective it does everything. Oracle Financials is proven and very good. The only thing [Oracle] was missing was the integration," said Kaminsky, who also indicated that pricing was similar.

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Sport Chalet's current homegrown system is tightly integrated -- front-office merchandising and administration are tied to back-office merchandise and vice versa. To Sport Chalet, SAP for Retail offered the best integration going forward.

Since the 1980s, Sport Chalet had been running a proprietary legacy system. With Sarbanes-Oxley deadlines approaching, the company faced a decision -- continue developing the custom system or use this compliance requirement as a driver for change. Sport Chalet chose the latter.

In addition to its compliance demands, Sport Chalet needed workflow management in a few areas.

For instance, the company needed to be able to define rules to automatically approve transactions, letting managers focus on exceptions.

In addition, Sport Chalet is no Wal-Mart. When dealing with vendors, Wal-Mart can dictate how vendors present information and follow processes. A retailer the size of Sport Chalet "has to be able to handle however each vendor works," explained Kaminsky. And the company deals with over 1,200 of them.

Sport Chalet worked with BearingPoint in the vendor selection process. One major task the companies undertook early on was documenting Sport Chalet processes against leading practices.

Because of this upfront effort, the company will be able to map its process against SAP for Retail's capabilities, and it expects many of them to fit. In fact, Kaminsky estimates that Sport Chalet has put three months of work into this already. Partially due to this head start, Sport Chalet has set an aggressive implementation goal of 10 months.

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