7-Eleven Stores Pty Ltd SAP Forum Retail & CPG

Dennis Lewis CIO April 2009

7-Eleven Stores Pty Ltd

Privately owned Australian company 7-Eleven brand under license from 7-Eleven International Revenues in excess of AUS$1.3b Approximately 380 stores on the Australian eastern seaboard Approximately half of the stores sell fuel Compliant franchise model In operation in Australia for 31 years Approx 225 corporate employees Approx 3,500 franchise store staff

7-Eleven IT Landscape
ERP Integration Business Intelligence Portal Point of Sale eService Integration Payroll Store network SAP ECC6 SAP PI SAP BI7 SAP POSDM SAP BIA SAP Portal 7 Radiant Systems Touch Systems Micropay Broadband - ADSL

Technical System Landscape

SAP NetWeaver Portal 7.0 SAP NetWeaver BI 7.0 POS DM
BI Reporting

SAP NetWeaver Portal 7.0 SAP ERP Central Component 6.0

BIA

Transaction Data

PIPE
Flat Files

Master Data

IX Retail Content

Converter

SAP NetWeaver PI 7.0

File Adapter POS Data

POS System (Radiant)

7-Elevens Current IT Status and Strategy

7-Eleven selected SAP as its core system in 1998 and went live with release 4.0 in 1999. The system was upgraded in 2003 and extended during 2004 to support the changes in the supply chain processes when 7-Eleven changed from mainly Direct-Store-Deliveries (DSD) to cross-docking using Metcash as the main distributor. A store portal was rolled out in parallel to provide stores with ordering and inventory management functionality. Retail Interchange, the original middleware solution, was replaced with SAP PI in 2007. In 2008 SAP was upgraded to Ecc6 and BI was implemented. Radiant is 7-Elevens POS system for all stores, it was implemented and rolled out during the 2d and 3rth quarter of 2004
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

SAP 4.0

Technical Upgrade to SAP 4.6 C Radiant Roll-out

Store Portal Supply Chain Enhancements PI ECC6 BI

SAP is the core system for 7-Eleven, and leveraging the investments made so far is one of the guiding principles for 7-Elevens IT. Other solutions are considered where SAP does not provide sufficient functionality or where it cannot be used in a cost-effective way. 7-Eleven has also chosen a vanilla approach for any system implementation, i.e. implementing standard functionality wherever possible and minimising systems modifications. Another guiding principle is to stay on supported versions of the software products.

IT Roadmap: Approach
Project Planning Determine Requirements Analyse Impact and Agree Priority Develop Roadmap Develop Business Case

Idea Development
Understand Understand Corporate Corporate Strategies and Strategies and Targets Targets Define Key Define Key Requirements Requirements and Drivers and Drivers Assess Assess Business Business Impact Impact

Solution Definition

Define Project Define Project

Define Process Define Process Requirements Requirements Define IT Define IT Requirements Requirements

Determine Determine Benefit Areas Benefit Areas

Evaluate SAP Evaluate SAP

Develop IT Develop IT Roadmap Roadmap

Develop Develop Business Case Business Case

Key Deliverables

Project Project Charter Charter

Outline Key Outline Key Requirements Requirements

Updated Updated Key Key Requirements Requirements

IT Roadmap IT Roadmap

Business Business Case Case

Prioritisation
During the Steering Committee meeting on the 14th of August 2007, the findings were presented and discusses for prioritisation. The following requirements were rated High: Grouped Requirement
G013 G001 G002 G005 G003 G028 G023 Efficient, Integrated Enterprise-wide Reporting End-to-End Category Management Effective Price Management Integrated Space Management End-to-End Promotions Management Improve Franchisee Communication Collaborative, Flexible Forecasting

Priority
High High High High High High High

Roadmap: Summary
2007/2008 2008/2009 2009/2010

Phase 1: Upgrade to SAP ECC 6

Phase 2: Implementation of BI and POS DM

Phase 3: Portal Upgrade and Roll-out

Phase 4: Extended functionality

The decision to upgrade first and then to implement BI and POS DM was driven by the arguments listed above but also by 7-Elevens desire to guarantee IT readiness for the significant growth strategy it has chosen. This equally determines the scope for the functional upgrade to ECC6. In order to reduce the risk of the upgrade and to meet the requirement G013 to provide Efficient, Integrated Enterprise-wide Reporting as quickly as possible only requirements with a high cost/benefit analyses and relatively low risk profile have been included into the scope. A fourth phase has been designed in order to address the requirements with a higher risk profile such as the switch to the new GL functionality. It is also important to note that the phases of the IT roadmap have significant process and change implications. The benefits can only be achieved if the identified process changes will be implemented together with the IT changes. Each of the requirements have been analysed with regards to their process and IT implications, for further detail please refer to Appendix 1.

BI System Business Case

Prioritised benefits were classified into three categories:
Hard, annualised cost savings which are quantifiable and directly attributable to process/systems changes; typically including reduced staff costs and improvements in the use of working capital. Benefits that are quantifiable, but are more subjective in their association with process/systems changes, typically including revenue and margin improvements. Benefits that are hard to quantify, but recognised as valuable or strategic to the organisation or are seen as a risk mitigation benefit.

Income/savings

Original estimate (workshops)

SAP fit

Proposed benefit

Phase

Benefit first realised

Type B: Revenue increases

Increase sales and profit through enhanced category management and better reporting Increase sales and profit through effective price management

More effective basket building promotions, increased customer transactions, increase revenue from suppliers through end to end promotions management Increase sales and profit through more better and customer focussed layouts and better execution Type A: Cost savings OPEX

Cost reduction due to efficient, integrated enterprise-wide reporting Cost reduction due to reduced shrinkage/improved loss prevention Reduced supply chain cost due to improved order management

Reduced data management cost, reduced marketing dept cost due to effective price management Reduced out of stocks due to capacity planning

Deliverables
Article Sales Analysis Sales Basket Analysis Sales Price Analysis Promotional Analysis Store and Category Analysis Article Sales, Purchase and Stock Analysis Vendor Scorecard Orders and Purchases Analysis Stock Availability Analysis Forecast Analysis Supply Chain Scorecard POS Statistics Store Matrix Audit Variation Analysis "Store Surveys" Article Movements Analysis General Ledger Analysis Accounts Payable Analysis Cash Flow Analysis Balanced Scorecard

Project Stakeholders

7-Eleven BI Project Organisation

Business Stakeholders
-

Bernie Hallam Tracy Hammon Michael Cullen Johni Hii Andrew Banard Jacqui Cain Sue Owen Natalie Dalbo John Pettit Linda Chia Gary Tocknell Greg Neave Chris Centra

Project Sponsor
David Ginsberg (COO)
-

Steering Committee
David Ginsberg (COO) Dennis Lewis (CIO) Andrew Manning (CFO) Julie Laycock (Marketing) Jim den Ouden (S-Chain) Tam Mc Quinlan (PM) Brian Molloy (PM, SAP) Mona Da Gama (SAP) Mark Giles (SAP) Michaela Wagner (PWC)

Project Management
Tam Mc Quinlan Charmaine Steward (SAP)

Training & Change Management

Cathy Brancatisano - Kasey Edwards (SAP) - 7-Eleven Trainer (TBD) - Training Analyst (SAP)
-

BI Functional
- Evan Michailidis (BA Team Lead) - Cathy Brancatisano (BA) - Adam Mills (SAP Solution Specialist) - Ramon Wong (BI Solution Specialist) - Bella De Freitas (BI Team Lead, SAP) - Elangovan Subbiah (BI, SAP) - Thomas Schleiter (PosDM, SAP) - Rahul Pradhan (PosDM, SAP) - Bjorn Goller (Solution Architect, SAP)

BI Technical/Development
- Chitra Ashok (ABAP, XI Lead) - Archana Baxi (ABAP, XI) - Nilusha Perera (ABAP, XI) - Alex Tambellini (Basis/Author Lead) - Wi Tanto (Basis/Authorisations) - Joe Zooeff (Infrastructure) - Rahul Pradhan (PIPE, SAP) - Thomas Schleiter (PIPE/Basis, SAP)

SAP 2007 / Page 1

BI System Overview
The current 7-Eleven BI system landscape consists of: 20 MultiProviders 19 InfoCubes 8 Data Store Objects 26 Queries 106 Users Number of transaction records: 528.2 million Number of Database tables: 21211 Total size of Database: 730.31 GB

Data Retention Strategy

Transaction data for the following cubes are retained for 15 months: Article Movements Customer (Billing) Merchandise Procurement Data older than 15 months is moved to a corresponding Month level detail cube for each of the cubes above The Month level cubes will hold data between 15 36 months old Data older than 36 months is deleted from the system permanently This strategy allows for better management of data volumes and yet provide an avenue for historical data up to 3 years prior to be available for analysis at Month level detail

POS Data Volume Management

Currently, the average number of POS transaction data loaded into BI is approximately 32 - 33 million records per month (~ 1.1 million per day) To manage this kind of data volume and maintain an optimum level of performance for reporting (i.e. to avoid reading from huge database tables), the POS Receipts data is logically partitioned into Quarterly POS Receipts cubes (i.e. POS Receipts Q4 2008, POS Receipts Q1 2009) Each POS Receipts Quarter cube holds close to 100 million records A POS Receipts Last 3 Months cube has been implemented to always store the most current 3 months worth of data. This cube is the most commonly used POS cube for performing Sales Basket analysis and is accelerated with the BIA.

Data Loading Timings

The following are the runtimes for the data loads that have been scheduled to run daily to extract data from ECC6 to BI: Master Data: ~ 1 hour Transaction Data:
Area
Article Movements and Stock Customer (Billing) Merchandise Procurement Profit Center Accounting POS (including POS Receipts Last 3 Month cube, POS Receipts Quarter cubes, POS Receipts Cancellation cubes)

Runtime
~ 12 minutes ~ 5 minutes ~ 18 minutes ~ 6 minutes ~ 1 hour 30 minutes

Prior to loading the POS data to cubes, data is ~ 14 minutes actually extracted from POS DM 7 times throughout the day to the Persistent Storage Area in BI. Each extraction takes ~ 2 minutes

Total

~ 2 hours 25 minutes

Total Daily load time: ~ 3 hours 25 minutes

BI Accelerator Performance
BI Accelerator indexes are created on 12 InfoCubes containing a total of 352.8 million records the indexes take up 10.66 GB in memory and 13.75 GB on disk The runtimes for retrieving the data out of the BI InfoCube source tables during execution of the 10 most used 7-Eleven queries are:
Query Sales Basket Transaction Analysis Last 3 Month Article Sales Analysis Article Sales Analysis - Month Article Movements Analysis Orders and Purchases Analysis Store and Category Analysis - Day Store and Category Analysis - Month Store Franchisee Matrix Purchases, Sales and Stock Analysis Product Movements Analysis (PMA) Report Without BIA 62.7 sec 96.3 sec 158.2 sec 48.1 sec 47.1 sec 33.9 sec 322.3 sec 157.3 sec 96.0 sec 72.8 sec With BIA 0.6 sec 2.8 sec 8.2 sec 0.7 sec 0.4 sec 2.4 sec 31.5 sec 2.4 sec 1.49 sec 1.3 sec Improvement ~ 105x faster ~ 34x faster ~ 19x faster ~ 69x faster ~ 118x faster ~ 14x faster ~ 10x faster ~ 66x faster ~ 64x faster ~ 56x faster

On average, there is a reduction of 96.7% in data retrieval runtime Note: All the queries were run with default selection values

Benefits Realisation
Pre-defined Benefits Business owner KPIs Target value Business changes Enablers Unplanned Benefits Monthly capture by business area What is the new capability Business value

Analysing 7-Eleven at High Speed Short focused project

Leverage investment in SAP technology Minimise integration issues Utilise Business Content as much as possible Leverage SAP Consulting skills & experience International team Deliver business benefits quickly: Initial delivery in 5 months

Analysing 7-Eleven at High Speed Business Benefits

Provide reporting we could not do before: Promotions, out of stocks, affinity analysis Merge our data and market data Provide useful information at speed Up to date at start of each day Put analytical capability in the hands of the end users Power users in each business area Embraced business wide ROI of less than 2 years Just the beginning of our BI journey

7-Eleven IT Focus 2009 - SAP

Store Portal Functionality Upgrade Use our BI capability to drive store retail performance:
Business focussed store level reporting Online communication All Retail Activity Store KPIs & performance reporting Store cluster benchmarking Store layouts Local range tailoring Fresh food in-stock position