ERP in RETAIL

Group No-2 Shubhangi Singh(61) Prateek Chhabra(16) Kulvinder Pathania(27) Amit Rai(10) Ashish Sonewane(29) Gaurav Chouhan(57)

Flow of Presentation
y What is ERP? y ERP in Retail y Advantages of ERP in Retail y Challenges of using ERP in Retail y Core areas of ERP system y ERP implementation stages y Disadvantages of using ERP in Retail y SWOT y Example of Pantaloom

What is an ERP system? y ´A business strategy and set of industry-domainspecific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise collaborative operational and financial processesµ (Source: Gartner·s Research Note SPA-12-0420) or According to Laudon and Laudon (2002) defines ERP as ´Firm wide information system that integrates key business processes so that information can flow freely between different parts of the firmµ .

ERP involves the following activities y Integrates various processes & provides consistency throughout the value chain y Integrates key business processes into single application software y Provides opportunity to implement processes that are best practice in industry .

ERP in RETAIL .

Advantages of ERP Systems y Uniform Organization Structure y Unified single platform & information architecture y Change agent y Improved management reporting & decision making y Efficient operations y Link with the outside world .

Challenges of using ERP in retail y Daunting implementation y Outdated architecture y Limited scope y Higher Upfront cost y High maintenance costs y No immediate benefits y Resistance to change .

Core areas of ERP system  Merchandise ‡ ‡ ‡ ‡ ‡ Purchase orders Request for quotations Vendor evaluation Goods receipt Product planning  Pricing Distribution Finance Data Analysis .

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ERP Implementation Stages yImplementation life cycle divided into 4 section of activities  Analysis  Design  Construction Implementation .

ANALYSIS y Involves study. identification & documentation of business requirement y Evaluation of the existing technical infrastructure of the company y Followed by Gap analysis .

warehouses & retail outlets) y Custom reports to meet client-specific requirements y Interface to existing legacy system y Data conversion routines to load historic data . offices.DESIGN y Development of Tree structure (business unit.

CONSTRUTION y Program development and testing are two important aspects of construction phase y Functions created are tested logically .

IMPLEMENTATION yInstallation of applications yTraining to the end users .

ERP Implementation Life cycles .

DISADVANTAGES OF USING ERP IN RETAIL y Lack of price differentiation y High installation costs y Non-customized technical support y Security concerns y Low flexibility y Limited scope for customization y High switching costs .

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STRENGTHS ‡ Helps in routine decision making SWOT WEAKNESS ‡ Expensive to procure ‡ Allows streamlining of business processes ‡ Allows integration with systems of associates and business partners ‡ Provides an enterprise wide view of the workflow OPPORTUNITIES ‡ Security concerns ‡ Requires significant employee training ‡ Compatibility issues with other legacy systems THREATS ‡High efficiencies beco ing critical in the retail sector due to the cut-throat co petition and paper-thin argins ‡Boo ing retail sector in the e erging global arkets ‡ Increasing co plexity of such syste s ‡ Opposition to globalization and transnational ove ent of goods ‡ Security concerns regarding sharing of data over a net ork .

BUSINESS IMPLICATIONS y Graphical User Interface (GUI) support y Allows optimum utilization of the resources y Reduction in the overhead and Inventory y Timely responsiveness y Enterprise wide solution y Integrated work environment .

Example of ERP in RETAIL .

.OVERVIEW y Opening stores in metros widely y Need reliable enterprise wide application y Looking for a solution that would bring all of its businesses and processes together y After different evaluations management decided to go for SAP.

Main Components of Retail ERP System y Merchandise management y Retail planning y Supply chain planning and execution y Store operations y Corporate administration .

Singapore : Around 1.Nutshell Aim : To deploy a robust transaction management system and an enterprise-wide platform to run its operations.200 : About six months Solution Implemented by Number of users Time taken Cost of implementation : About $10 million . : SAP retail solution : SAP team with the help of Novasoft.

IMPLEMENTATION y Outsourced to third party ² Novasoft y Management also involved y Project divided into three phases .

In this phase. This blueprint was later used in the formation of new states of the solution. . Since the SAP would combine all the processes.‡1st Phase ² The first phase involved blueprinting existing processes and mapping them to the desired state. analysed and drafted them. the entire project team worked on current processes within the structure of the organisation. each and every one of these had to be evaluated.

Before the SAP implementation.‡2nd Phase: Novasoft developed SAP platform ‡The SAP platform was developed with the help of Novasoft·s template which was predefined by SAP after evaluation of Pantaloon·s needs and expertise in retail solutions. ‡3rd Phase: Stores to switch to new system and data to be ported ‡The last phase in this project was for stores to switch over to the new system and for current data to be ported. This data had to be migrated to the new SAP application. . all the data was unorganised.

BENEFITS y Long term benefits y Optimize inventory and cut it by two to four weeks y Proper management of data .

Conclusion y A retail ERP system makes management of a retail business a lot easier by utilizing the computing power offered by the modern day Information Systems (IS) in an integrated and consistent manner. y It also eliminates errors caused by multiple input of the same data required in disparate legacy systems. Retail ERP Systems have been found to deliver high ROI despite their high initial and maintenance costs. y The ERP Information Systems facilitates faster and better management decisions by providing crucial information in a timely manner. . y When implemented properly.

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