ERP in RETAIL

Group No-2
Shubhangi Singh(61)
Prateek Chhabra(16)
Kulvinder
Pathania(27)
Amit Rai(10)
Ashish
Flow of Presentation
What is ERP?
ERP in Retail
Advantages of ERP in Retail
Challenges of using ERP in Retail
Core areas of ERP system
ERP implementation stages
Disadvantages of using ERP in Retail
SWOT
Example of Pantaloom
What is an ERP system?
“A business strategy and set of industry-domain-
specific applications that build customer and
shareholder communities value network system by
enabling and optimizing enterprise and inter-
enterprise collaborative operational and financial
processes”
(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 firm”
ERP involves the following activities
Integrates various processes & provides consistency
throughout the value chain
Integrates key business processes into single
application software
Provides opportunity to implement processes that are
best practice in industry
ERP in RETAIL
Advantages of ERP Systems
Uniform Organization Structure
Unified single platform & information
architecture
Change agent
Improved management reporting & decision
making
Efficient operations
Link with the outside world
Challenges of using ERP in retail
Daunting implementation
Outdated architecture
Limited scope
Higher Upfront cost
High maintenance costs
No immediate benefits
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
ERP Implementation Stages
Implementation life cycle divided into
4 section of activities
 Analysis
 Design
 Construction
Implementation
ANALYSIS
Involves study, identification & documentation
of business requirement

Evaluation of the existing technical

infrastructure of the company

 Followed by Gap analysis

DESIGN
Development of Tree structure
(business unit, offices, warehouses &
retail outlets)
Custom reports to meet client-specific
requirements
Interface to existing legacy system
Data conversion routines to load historic data
CONSTRUTION
Program development and testing are
two important aspects of construction
phase

Functions created are tested logically

IMPLEMENTATION
Installation of applications

Training to the end users

ERP Implementation Life cycles
DISADVANTAGES OF USING ERP IN
RETAIL
Lack of price differentiation
High installation costs
Non-customized technical support
Security concerns
Low flexibility
Limited scope for customization
High switching costs
 SWOT
STRENGTHS
• Helps in routine decision making
• Allows streamlining of business
processes
• Allows integration with systems
of associates and business partners
• Provides an enterprise wide view
of the workflow
OPPORTUNITIES
•High efficiencies becoming
critical in the retail sector due to
the cut-throat competition and
paper-thin margins
•Booming retail sector in the
emerging global markets
WEAKNESS
• Expensive to procure
• Security concerns
• Requires significant employee
training
• Compatibility issues with other
legacy systems
THREATS
• Increasing complexity of such
systems
• Opposition to globalization and
transnational movement of goods
• Security concerns regarding
sharing of data over a network
BUSINESS IMPLICATIONS

Graphical User Interface (GUI) support 

Allows optimum utilization of the
resources
Reduction in the overhead and Inventory
Timely responsiveness
Enterprise wide solution
Integrated work environment
Example of ERP in RETAIL
OVERVIEW
Opening stores in metros widely
Need reliable enterprise wide application
Looking for a solution that would bring all of
its businesses and processes together
After different evaluations management
decided to go for SAP.
Main Components of Retail ERP System

Merchandise management
Retail planning 
Supply chain planning and execution 
Store operations 
Corporate administration 
 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 : About $10 million
IMPLEMENTATION
Outsourced to third party – Novasoft
Management also involved
Project divided into three phases
• 1st Phase –
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.
• 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.
Before the SAP implementation, all the data was
unorganised. This data had to be migrated to the new
BENEFITS
Long term benefits
Optimize inventory and cut it by two to
four weeks
Proper management of data
Conclusion
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.

The ERP Information Systems facilitates faster and better

management decisions  by providing crucial information in a timely
manner.

It also eliminates errors caused by multiple input of the same data
required in disparate legacy systems.  

When implemented properly, Retail ERP Systems have been found

to deliver high ROI despite their high initial and maintenance costs.