Success story Implementation of SAP for Retail in the retail chain Eldorado A reliable ERP system is a support for the rapid growth The first Eldorado store was opened in 1994 in Samara. A small shop of electronics soon became so successful that the company decided to develop its business. A chain of stores began to grow fast as it explored actively new regions in Russia and in the nearby countries. The growth rates of Eldorado needed a support in a form of a reliable IT base such as a high-class ERP system. In 1999 the top management of Eldorado decided to implement SAP ERP, and since 2001 Eldorado has used SAP ERP 4.0 for financial management and management accounting. SAP ERP 5.0: Reload To provide a competitive advantage over the international networks penetrating Russia Eldorado needed to show a new level of automation of its business processes. Initially, the company followed the path of setting system logic for business processes, not vice versa. In the SAP ERP 4.0 a significant number of objects were modified, and that did not allow the system to develop and implement standard routine procedures. By that time the company’s database was more than 8 Tb. “As a result we lost the opportunity for the further development, and we lost many standard instruments necessary for the performance of each system, - says Alexander Talalykin, CIO at Eldorado. - When the functionality of SAP ERP 5.0 had been explored, it appeared that all the functionality that we had previously tried to program in-house was already included in SAP ERP 5.0.� Eldorado has chosen CIBER Novasoft (since 01/01/2009 - CIBER), an international consultancy firm and a leader in the automation of retail chains, as a partner for the transition to SAP ERP 5.0. This choice was driven by the international and Russian experience of CIBER: the company has partnered for SAP for Retail implementation in such international networks as Metro Group, Castorama and Spar. In Russia CIBER has partnered for implementing SAP for Retail in the networks Euroset, Lenta, and UltraStar.
Functional volume in detail The transition to a new version of ERP system SAP for Retail was made in all branches of Eldorado located in the regions of Russia and in the branch in Ukraine at the same time. This allowed to avoid the expenditures on the usage of two systems (the old and the new ones) 1
simultaneously that would require a significant and complex adaptations of interfaces with external stores and outlets. During the project the following business processes were automated: • Material management and sales. • Retail business processes. • Financial and management accounting. • Operational logistics. • Sales data management. • Exchange infrastructure. • Assortment planning. • Business information warehouse. The number of uses came up to 1,500. The project was completed in the shortest terms – in 8 months only (03/15/2006 - 11/01/2006), and the system was ready to an effective start in all 15 regions of operation by the New Year’s Eve. Project results: the business of Eldorado is under control The usage of the new features of SAP ERP 5.0 together with the adaptation of business processes to the standard SAP solutions for retail virtually eliminated the need of modifying the system by facilitating the support, upgrades and communication with other supply networks. As a project result new effective technologies have been supplied to the company at the time of the greatest demand, and the company achieved an immediate positive impact on business as, together with modern software, some new business models were implemented. The most significant project results are as follows: - SAP for Retail system has integrated all business processes of the retail chain in terms of material management, finance and accounting, sales and purchasing. - A prompt management reporting allows to quickly receive the information for decision making. - All key retail business processes are optimized. - Modern technologies of planning and forecasting have been implemented. - The accounting and controlling methods have been improved. - Assortment planning has been brought to a new level. - The functionality of SAP PI which was a part of the solution has enables closer collaboration with suppliers and customers. - New functionality for supply chain management, planning and replenishment has allowed the company to stop using some of in-house software, and it has significantly lowered the costs of software maintenance and development. Eldorado was the first Russian retail chain to receive all the benefits of Merchandising and Assortment Planning (MAP) and POS-terminals’ data processing (PIPE).
Eldorado is a leader of home appliances retailing market By 2009 the number of Eldorado shops grew up to 1,100, and the total sales area exceeded 700,000 square meters. Over 15 years more than 150 million consumers improved their household with goods sold in Eldorado stores. By the end of 2006, every third TV set and washing machine was bought by Russians in the Eldorado network. The results of the successful development and leadership of the retail network is supported not only by quantitative indicators but also by the recognition of the business community, the press and among analysts: in September 2007 Eldorado won the nomination Major Non-Food Network of TOP 200 Russian retail - 2007 rating organized by the National Trade Association (NTA), and that was the third victory in a row. 2
Eldorado and CIBER: the partnership continues In 2009 Eldorado and CIBER continued their partnership during the project of automation of the extended functionality in financial accounting including RAS, IFRS, tax accounting, and management accounting. A continuation of partnership shows that CIBER consultants are professionals in SAP for Retail implementation, and that CIBER has a great project team and a focus on success for the client’s business. Eldorado is the biggest retailer of home appliances and electronics in Russia and Eastern Europe. The company was established in 1994. By 2009 more than 1,100 household appliance stores and 380 stores operated in Russia and Ukraine under the brand Eldorado. The company has about 28% of consumer electronics retailing market. Eldorado has more than 40,000 employees. In 2008 the company turnover was 5 bln. USD. More information about Eldorado is available at www.eldorado.ru.
CIBER Russia (www.ciber.ru, www.ciber.com) is a Russian subsidiary of CIBER, Inc., a system integration and IT consulting company.
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