How retailers are making the move to SAP Cloud ERP

For many retail companies, ERP software is the backbone of their business. It has often grown with the company and has often been adapted to its own needs. It therefore fits like a tailor-made suit, but is a stumbling block when major changes or even just updates to the basic software are due.

What's more, markets and customer wishes are currently changing very quickly. Omnichannel strategies and 24/7 availability are mandatory. In many cases, outdated software can no longer keep pace and cannot simply be adapted to market trends. New systems offer new functionalities that reduce costs, automate processes, increase flexibility and improve resilience.

This is important because there will be an even greater shortage of skilled workers in the future and only the integration of artificial intelligence and a high degree of automation will ensure smooth operations. Most retailers are therefore faced with an important strategic decision regarding their ERP system. In addition, SAP has discontinued its R/3 systems and will discontinue support, making it necessary for SAP user companies to switch to SAP S/4HANA.

On-prem, private, public cloud?

Where the new target system should run is a much-discussed question. Hosting everything yourself („on-premise“) supposedly offers the best protection and maximum control, but is often expensive, maintenance-intensive and cumbersome when adjustments need to be made.

A private cloud offers technological and commercial advantages here, particularly in terms of performance scaling and the variabilization of operating costs. Nevertheless, both in an on-premise environment and in the private cloud environment, the servers and the application must be continuously managed and maintained in-house. Added to this are the ever-increasing cyber security requirements, which have now reached the top of the CIO agenda.

A public cloud solution has the major advantage that companies do not have to worry about hardware, software and server updates or backups. New functionalities are provided automatically. Customizations are possible within the framework of existing configuration settings, AI integration, low-code and no-code platforms and direct ABAP programming. In addition, external systems can be connected via more than 700 already integrated interfaces to third-party systems and more than 650 open API interfaces. From a cyber security perspective, customers also benefit from the solution's joint protection at the highest level.

Public Cloud for Retail

SAP currently supports retail customers with attractive solutions such as Public Cloud for Retail, Fashion & Vertical Businesses, which offer specially tailored functionalities and can therefore be provided quickly and at low, predictable costs. The fully integrated platform is suitable for medium-sized chain stores, omnichannel commerce, fashion brands, digital D2C models and vertically organized retailers. It enables managers to determine not only the daily turnover of a store, but also in detail which products were sold in what quantities and at what prices. As the overall system has a modular structure, additional modules can be licensed flexibly as required and used immediately.

Retailers are slowly coming to the realization that it is better to adapt their own processes to best practice guidelines than to impose their own processes on the ERP solution. „Best practice“ means that processes and workflows have proven to be highly efficient, flexible and secure. Adopting these offers the retailer many advantages, including of course the fact that the ERP software can be used immediately with little or no adaptation. This significantly reduces the costs and effort involved in implementing SAP Cloud ERP, for example.

Suitable transformation path

Various approaches are available for the transformation of an existing ERP landscape towards a new system - such as greenfield, brownfield or hybrid approaches. Which transformation path makes sense does not depend on a single method, but on a clear definition of objectives and a well-founded analysis of the initial situation. This classification in particular is challenging without experience and market knowledge.

Proven analysis formats, structured preliminary studies and specialized tools such as those used by KPS provide support here. They create transparency about processes, data, system usage and organizational framework conditions and thus form the basis for finding the right
approach - be it a completely new start (greenfield), a technical transfer of existing structures or a selective, gradual transition. In this way, the necessary steps can be clearly defined and a transformation can be implemented in a predictable, low-risk manner and without unnecessary interruptions.

Easy transition to SAP Cloud ERP

The switch to SAP Cloud ERP requires a smart, strategic approach to ensure that it runs smoothly. KPS has the methodological expertise and in-depth process knowledge to provide your company with comprehensive support from strategic alignment to technical implementation. The focus is on generating added value and a short project duration.

The most important building blocks

• Quick start with preconfigured processes and KPS boosters based on the SAP integration platform BTP
• Award-winning industry solutions for all forms of retail with predefined, coordinated process modules
• Enablement and training with SAP Enable Now for optimal change management
• Business process management with Signavio to optimize and document processes during the course of the project, based on the most comprehensive process library in retail („KPS Instant Platform“)
• ALM to control the project
• Growth-oriented setup and implementation to quickly integrate additional locations and business models.

Meet us at EuroShop

If you are currently concerned with the question of how an existing merchandise management system can be sensibly developed in the direction of SAP Cloud ERP or set up from scratch - regardless of whether you are already using SAP or want to get started in the SAP world - we cordially invite you to a personal exchange. KPS will be at EuroShop in Düsseldorf from February 22 to 26. There you can see live examples of standard core processes in Hall 6/Stand G41 and discuss with experts how you can approach the changeover. We will be showing numerous examples of how external systems and outsourced processes can be connected to an SAP Cloud ERP via BTP extensions and how integrations can also be implemented at your company.

KPS

KPS has been the leading management consultancy for the digital transformation of retail companies for more than 25 years. KPS combines in-depth industry knowledge with a strong implementation approach and market-leading platforms such as SAP and composable best-of-breed solutions. More than 70 technology partnerships, over 400 successful customer projects and over 90 awards confirm KPS' position as the leading consultancy for retail and wholesale in Europe.