Toy Store invests 260 million rubles in development of projects of SAP

2017: Toy Store invests 260 million rubles in development of projects of SAP

On June 1, 2017 SAP and Toy Store Group signed the memorandum of long-term strategic partnership within the St. Petersburg International Economic Forum (PIEF-2017). In the closest several years of investment of the retailer will make 260 million rubles.

The agreement includes a new stage of development by the existing ERP and an analytical system, the platform for e-commerce, centralization of deliveries through own distribution center (DC) in the Moscow region and also transfer of suppliers of RTs to electronic document management.

The joint project of SAP and Toy Store began in 2013. During this time the companies did a great job - based on the previous stage in 2016 growth of retail network and efficiency of employees increased twice, also more than twice the quantity of the lines which are daily processed in a warehouse of the company increased. The number of the serviced shops from 2014 to 2016 increased from 272 to 480. Since 2013 the share of business, general running and administrative expenses in percent from revenue was reduced from 31% to 23.7% thanks to increase in operational efficiency and cost reduction.

Earlier in Toy Store the modules SAP ERP (assortment management, finance and accounting, transactions in shops, pricing, the autoorder of goods), SAP Business Warehouse on HANA (business intelligence), SAP Extended Warehouse Management (logistics) were implemented. Productive operation of a system began in January, 2015. SAP Consulting became the partner in implementation of the IT platform.

2016: SAP for Retail helped Toy Store to save 273 million rubles

At the beginning of 2016 Toy Store completed the large-scale project on transition to a single platform of SAP, the director of the department of IT of retail network Sergey Kondarev told TAdviser. All basic processes, including warehouse logistics and finance are transferred to SAP. From the old systems at the time of project completion in Toy Store 1C for calculation of salaries remains so far. It is possible that and this process will be transferred afterwards to SAP, Kondarev says.

In September, 2016 SAP and Toy Store Group announced transition to SAP for Retail. Creation of a common information space allowed to save 273 million rubles on business, administrative and management expenses. Consolidation of information systems allowed to optimize processes of goods acceptance in shops: exchange of documents with the supplier, beginning from the price list pending notification on shipment and the consignment note, it is provided in electronic form. It helped to increase the speed of goods acceptance and to optimize the staff list of shops regarding functionality of acceptance of goods. In 2016 - 2017 Toy Store will continue implementing solutions of SAP. In the closest plans of the company centralization of deliveries through own distribution center (DC) in the Moscow region and also transfer of suppliers of RTs to electronic document management.

The updated IT landscape of Toy Store is based on the platform for automation of retail of SAP for Retail. Among the implemented modules –SAP Merchandising for assortment management, SAP Forecasting&Replenishment for forecasting and management of trade inventories and SAP EWM for management of warehouses. In addition, in Toy Store the solution of POS DataManagement for control of point-of-sale terminals,SAP HCM for personnel management is used.

In the company also the BI system of SAP based on the SAP HANA platform is implemented. It coexists with the system of a business intelligence QlikView. BI is used for the analysis of indicators of operating activities – on sales, on stocks, on purchase of goods, etc. and also for formation of the personified offers to buyers.

The director of the department of IT of Toy Store Sergey Kondarev (on a photo at the left) and the head of SAP CIS at that time - Vitaly Postolaty. A press conference in 2013

At the time of the beginning of implementation in 2013 in the company business applications of different vendors were used. So, for several years before Toy Store implemented a management system for retail network Oracle Retail. Sergey Kondarev told TAdviser earlier that it was the "old" version of the solution, and according to the estimates of the company, transition to the new version, in fact, would be its reimplementation. Toy Store about half a year compared the new version of the solution for automation of retail of Oracle and SAP, and as a result stopped the choice on the last, Kondarev said.

If earlier existing platform based on Oracle Retail was capable to service uninterruptedly 200-300 shops of Toy Store network, then the new platform based on SAP is capable to increase this indicator twice. It is very relevant against the background of dynamically upcoming business of our network, - the Chief information officer of Toy Store noted in a conversation with TAdviser.

In one and a half years at Toy Store the number of outlets grew approximately twice - almost to 400. In the company work more than 3000 people with SAP applications – the staff of all outlets of Toy Store network. Work is carried out far off with use of secure channels of communication.

One of tasks which transition to a single platform should support is increase in operating profit of business in the conditions of expansion of the company and cost reduction, including – for the cost reduction account of support of IT systems. Sergey Kondarev in 2013 told TAdviser that, according to the estimates of the company, total cost of ownership a new IT landscape based on SAP - is about 15-20% lower in comparison with previous: "Absolute prize. I can tell that support of the existing systems costs very much".

Sergey Kondarev also told TAdviser that thanks to automation the company increased operational efficiency and laid off considerable number of the employees working at goods acceptance: "Goods acceptance is performed quicker, using mobile terminals now, and at the checkout it is required to make less movements. It allows to execute all transactions with smaller number of employees".

The implemented SAP applications are based in leased virtual DPC which resources are provided to Toy Store on the IaaS model. For Toy Store of IT – non-core business therefore significant building of own resources is inexpedient, Sergey Kondarev notes. With respect thereto in the company decided to rent computing powers. The ready failsafe SAP platform allowed to unroll quickly the applied systems and to receive their qualified service without increase in own IT state, he added.

At the same time, if operation of a system can be provided on own resources and at the same time its cost is lower or is comparable to the price offered by the outsourcer, then it does not make sense to give this process on the party. By such principle, for example, we independently operate 1C, e-mail and some other systems. In other cases it is better to use services of the competent outsourcer who will undertake, including, and information security support, - the Chief information officer of Toy Store says.

SAP Toy Store completed the first stage of the project on transition from Oracle to a single platform in the middle of 2014. In its framework the distribution center of network, head office and two shops in Moscow was transferred to new solutions. Implementation was performed by SAP. At the time of the beginning of implementation of the SAP platform by users of business applications in Toy Store about 1 thousand people in total were, the director of the department of IT of Toy Store said TAdviser. He expected that upon completion of the first stage of the project, in connection with growth of shops and opening of the new centers, their number will increase approximately to 1.5 thousand, and afterwards – to 2-3-thousand employees.

In plans of Toy Store as of May, 2016 on the first place on priority - development of Internet trade and transfer of the online store on the platform of e-commerce SAP Hybris.

The online store at us exists already for a long time, however earlier it worked at the self-written platform. Toy Store is going to complete the project of migration on the SAP platform in the nearest future, - Sergey Kondarev tells.

In a priority also reservation of the IT systems used in Toy Store. According to Kondarev, with growth of number of shops it is required to secure itself on all aspects. A part of IT systems is already reserved, among them SAP, and a part of systems are not. A question of whether the company will rent computing powers under reservation or to do it on own resources, it is studied and should start in the nearest future, the Chief information officer of Toy Store reported TAdviser.