Pantaloon: ERP in retail

Needing an organisation-wide IT solution to help it perform better, Pantaloon decided to

implement an ERP system from SAP. By Kushal Shah

More than eight years after it forayed into the retail business,
Pantaloon Retail decided to implement SAP to keep itself
competitive in the rapidly growing Indian retail market.

Store operations have never been as important

to retailers as they are now. Successful retailers
are those who know that the battle for
customers is only won at the frontline, which in
the case of a retail chain is at its stores.
Pantaloon was regularly opening stores in the
Rakesh Biyani metros and there was an urgent need for a
reliable enterprise wide application to help run
its business effectively. “The basic need was to have a robust
transaction management system and an enterprise wide platform to run the operations,”
says Rakesh Biyani, Director, Pantaloon. The company was looking for a solution that would
bring all of its businesses and processes together. After a comprehensive evaluation of
different options and software companies, the management at Pantaloon decided to go in
for SAP.

The Solution

Some of the qualities of SAP retail solutions are that it supports product development, which
includes ideation, trend analysis, and collaboration with partners in the supply chain;
sourcing and procurement, which involves working with manufacturers to fulfil orders
according to strategic merchandising plans and optimise cost, quality, and speed–variables
that must be weighted differently as business needs, buying plans, and market demand
patterns change; managing the supply chain, which involves handling the logistics of
moving finished goods from the source into stores and overseeing global trade and
procurement requirements; selling goods across a variety of channels to customers, which
requires marketing and brand management; managing mark-downs and capturing customer
reactions, analysing data, and using it to optimise the next phase of the design process.

In a Nutshell

Aim : To deploy a robust transaction

management system and an
enterprise-wide platform to run its
operations.

Solution : SAP retail solution

Implemented by : SAP team with the help of Novasoft,

Singapore

Number of users : Around 1,200

Time taken : About six months

Cost of implementation : About $10 million

The implementation

“The implementation was outsourced to a third party. The implementation

was done by the SAP team with help of Novasoft which is based out of
Singapore,” says Biyani. Some people from Pantaloon also assisted in the
project. About 24 qualified people worked on this SAP implementation. SAP
was chosen as the outsourcing party on a turnkey basis. This project was Chinar
headed by Pantaloon’s Chief Information Technology Officer, Chinar Deshpande
Deshpande.

Three Phases

SAP implementation is not a single phase process. The project was divided into three
phases.

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

In the second phase, 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.

The last phase in this project was for stores to switch over to the new system and for
current data to be ported. Before the SAP implementation, all the data was unorganised.
This data had to be migrated to the new SAP application.

The project was flagged off on 15th June 2005 and took about six months to finish. It went
live at the head office on 1st January 2006. The stores went live on SAP from 1st January
2006 to 30th June 2006.

About the Company

Pantaloon Retail is the flagship enterprise of the Future Group, with a

presence across multiple lines of business. The company owns and
manages multiple retail formats that cater to a wide cross-section of
Indian society. Headquartered in Mumbai (Bombay), the company
operates through four million square feet of retail space, has over 140
stores across 32 cities in India and employs over 14,000 people. The
company registered a turnover of Rs 2,019 crore for FY 2005-06.

Pantaloon Retail forayed into retail in 1997 with the launching of its
fashion retail chain, Pantaloons in Kolkata. In 2001, it launched Big
Bazaar, a hypermarket chain. This was followed by Food Bazaar, a food
and grocery chain. Next up was Central, a first of its kind located in the
heart of major Indian cities. Some of its other formats include, Collection
i (home improvement products), E-Zone (consumer electronics), Depot
(books, music, gifts and stationary), aLL (a Little Larger, fashion apparel
for plus-size individuals), Shoe Factory (footwear) and Blue Sky (fashion
accessories). It has recently launched its e-business
venture, futurebazaar.com. The group's subsidiary companies include,
Home Solutions Retail India Ltd, Pantaloon Industries Ltd, Galaxy
 Entertainment and Indus League Clothing. The group also has joint
venture companies with a number of partners including French retailer
Etam group, Lee Cooper, Manipal Healthcare, Talwalkar's, Gini & Jony
and Liberty Shoes. Planet Retail, a group company owns the franchisee
of international brands like Marks & Spencer, Debenhams, Next and
Guess in India.

Benefits and Challenges

The key challenges in this project were not in the implementation. Rather, the difficulties
were faced during the data migration and in managing the interim period when the project
was underway for about six months. Migrating unorganised data to an organised format is a
challenging task.

Pantaloon has not been able to see immediate benefits from this implementation. This
application certainly has long term benefits which will be seen when the performance of
various aspects will be analysed. “It is too early to calculate RoI. We have already started
working on MAP (Merchandise Assortment Planning), Auto-Replenishment and Purchase
Orders. We hope to use these systems to optimise our inventory and cut it by about two to
four weeks (depending on the line of business),” says Biyani.

Maintenance & Hardware

This application is currently being used by around 1,200 employees across the organisation.
For maintaining this implementation and its related applications, Pantaloon has an in-house
team and it has outsourced ABAP resources. They are also in the process of setting up a
SAP Competency Centre. The system runs on a HP Superdome server on HP UNIX 11i and
the database is from Oracle. The cost of this project was about $10 million.

Future projects

After the successful implementation of SAP for its retail chain, Pantaloon plans to go ahead
with IT projects such as implementation of WMS with RFID, Customer Intelligence and CRM.
Inventory and Promotions Optimisation will be pursued later this year.
Vectra ERP Implementation Takes Wing
by Sahil Mane 1st September, 2009 in ERP

In a bid to support its growth ambitions and streamline

operations across the organisation, Global Vectra Helicorp,
one of India’s leading private helicopter companies
recently implemented an ERP package from IFS.

Part of the Vectra Group of Companies, Global Vectra

Helicorp currently owns a fleet of 19 Bell 412 helicopters,
which it hopes to expand to approximately 40 over the
next few years, has gone live with the ERP.

"Ye" Old Set Up

The company offers offshore helicopter services to oil companies such as ONGC,
Reliance and Gujarat State Petroleum Company (GSPC) on the east and west coasts
of India.

Up until recently the company’s Maintenance, Repair and Overhaul (MRO) processes
were facilitated via Computer run, an MS-DOS based programme and for their
financials ran Tally. This set up however was proving to be a drag for the company
as it presented a number of challenges such as siloed infrastructure and lack of
visibility across disparate business processes.

“Our legacy systems were not in synch with our growth plans. We as a company
have been witnessing exponential growth for the last few years and our earlier
systems were limiting our future ambitions. Also with the advent of increasingly
complex regulatory directives, compliance was becoming a major concern to us. It
is for these reasons that we felt the need for a comprehensive ERP solution,” said
Sanjay Patel, General Manager (IT-Projects), Vectra IT Solutions.

Hunting For The Right ERP

To ascertain that they chose the optimal product for their requirements, the
company went through an extensive evaluation program. “We had a wide-ranging
questionnaire that vendors had to answer even before the pre-sales process,” said
Patel.

The company assessed several offerings from ERP vendors including Oracle, SAP,
Microsoft, Ramco and Baan, before finally settling on a set of solutions from IFS.

“The tremendous customer base that IFS has in the aviation industry was what
eventually tipped the scales in their favour,” mentioned Patel.

In addition to evaluating a vendor, Patel undertook an evaluation programme to

identify suitable members for the core team responsible for the implementation.
“My decision was to go to the second rung of top management, thus enabling me to
reach someone who was involved in the daily operations and also had the ability to
take spot decisions. This core team was instrumental in the success of this
deployment,” informed Patel.

He also identified all the business processes that needed to be optimised in the first
phase of implementation. “Deviating from the norm, we decided to include MRO in
the first phase along with finance and logistics. We also decided that HR and
manpower calculations could be implemented in the second phase. We were
following the KISS (Keep It Simple Stupid) principle for deployment and needed
only the fundamental processes in the initial phase,” he said.

While evaluating the right ERP, Patel also had to take into account Vectra Aviation,
a Delhi based sister concern. As both companies shared approximately 85% of their
business processes, they needed a targeted package that catered specifically to the
aviation industry.

Implementation Challenges

The company kicked off implementation on the 12th of February this year and went
live with the solution on the 16th of July. However, it wasn’t all that simple. It had
to face a number of obstacles, some expected and some not so expected.

Availability of core team members, unease in dealing with remote infrastructure

and the delay in master file creation as the data collection process was quite
cumbersome, were some of the expected challenges the company had to face.

Another issue that Patel anticipated was a conflict between the modules of the ERP
and their business processes. Whether to customise the ERP package or make
changes in the business process?

Patel had an unusual solution to this problem, he opted for the later. According to
him, “Whenever there is a conflict we prefer to make adjustments in the process to
accommodate the ERP. In this manner we are able to minimise customisation and
reduce the TCO drastically. It also saves you customisation costs when you get a
software upgrade.”

The not so expected bit however was the software idiosyncrasies. “We also had to
deal with software idiosyncrasies and realised that certain modules of this package
were not enterprise grade. This system was intended to service two companies, but
the vehicle information management component could only be configured to include
information for one. Eventually the solution to this problem was the creation of two
separate databases.”
As this solution was intended to service two companies, Patel decided to implement
a web deployed model with the datacentre based in Delhi. Patel figured this was the
most effective way to leverage minimum infrastructure expenditure.

The IFS solution runs on HP servers and uses an Oracle back-end.

Improved Operations Post Implementation

“Although it’s too soon to see definite benefits, we are able to get a glimpse of the
overall benefits. We already have a more complex MIS in place in the finance
module. As the amount of data capture is large, it helps Quality Control (QC) and
Engineering with airworthiness certification. The ability to generate customised and
on demand reports is also one of the immediate effects,” says Patel.

Patel envisions the long-term benefits to include building the foundation of a more
complex MIS and enabling the company to grow faster with improved scalability.

“Successfully completing an implementation in six months with a part-time core

team was an achievement and we have now set up a stabilisation phase steering
committee to handle issues with usage and monitor training.” said Patel.

Increasing usage of the solution, building user confidence and building ownership
have been the company’s primary focus areas after the system has gone live.

Global Vectra Helicorp is currently evaluating plans for implementing a similar

solution for the finance and HR departments in three other Vectra Group companies
including Vectra IT Solutions