X5 Group prepared for standalone SAP without vendor support

2022: X5 Group prepared for standalone SAP without vendor support

X5 Group is one of the largest SAP ERP users in Russia. In May 2022, the company told TAdviser what measures they took due to the curtailment of sales and the SAP data center in Russia and the vendor's previously announced intentions to stop supporting Russian customers.

Today, SAP ERP in X5 Group works on premise and does not require deployed external support.

Possible risks are offset by our internal competencies: the expertise of the X5 Group team on SAP products is one of the strongest in Russia. We have already changed some business processes and strengthened the team in order to prevent the risks of accidents and failures on our own. IT support and support processes are adapted to ensure business continuity by their own team without involving a vendor, "X5 Group said.

SAP systems in the company have developed for more than 10 years, which allowed you to increase internal expertise. This gives the company the opportunity to work completely autonomously, added to the X5 Group.

2020: Transfer of SAP Systems to Russian Data Center

In 2020, X5 Retail Group, together with SAP, completed a project to migrate its IT systems to the Russian data center. The functional scope of the project included 11 systems, including SAP ERP, with a total data volume of 150 TB. X5 at that time became the only company that migrated SAP ERP with such a large database without stopping the company's business processes, said in November the German software vendor^[1].

Following the results of the X5 project, the Retail Group created a new IT infrastructure in Russia for SAP ERP and other IT systems. The company ceased to operate the European data center, concentrating all IT systems in Russia. Another result of the migration was an increase in the efficiency and acceleration of the company's business processes due to the technical capabilities of the new data center. It is planned that the new infrastructure will provide sufficient capacity for stable operation of information systems in high seasons. In addition, during the migration of systems to the new infrastructure, the retailer's operating systems and other enterprise software were updated.

2015: SAP HANA implementation based on SAP Data Center in Moscow

In August 2015, SAP announced a contract with X5 Retail Group to introduce a high-performance SAP HANA data storage and processing platform into the retailer's IT system in the SAP HANA Enterprise Cloud based on the SAP Moscow data center. More details here.

2011: Completion of ERP system replication

In March 2011, it was announced: X5 Retail Group N.V. completed the replication of the SAP for Retail management information system. The general contractor of the project was GMCS. The system provides management of the key business processes of X5 Retail Group - pricing, assortment management, goods movement, finances, order of goods - by uniform standards. The number of users of the system as of 2011 was more than 2500 people and in the future grew due to the opening of new stores.

Under the management of SAP for Retail, all 8 branches of the X5 Retail Group, as well as warehouse facilities located throughout the Russian Federation, are operating today. The results obtained to date have once again confirmed the correctness of the selected implementation strategy of the system, which was used during the replication, and the professionalism and coherence of the project team. We have built a unique platform that can support our company's new business growth and development plans, "said Teymur Sternlieb, Deputy Chief Executive Officer for Business Support at X5 Retail Group. - X5 Retail Group plans for the current year - automation of processes related to pricing, which, in particular, will give us the opportunity to analyze the change in retail prices, sales volume and optimize prices taking into account the elasticity of demand, as well as forecasting sales and replenishment. I am sure that all this will meet the needs of millions of our customers every day.

2010: SAP for Retail Management Information System Project Outcome

The need to switch to a new trading management information system was caused by the growing volume of the business of a retail company operating in several formats (discounter, supermarket, hypermarket), and the conditions of increasing competition. Existing IT systems to automate the business of the Pyaterochka, Perekrestok and Karuseli networks, which are part of the X5 Retail Group network, were not able to cope with the scale and tasks of the combined company. In this regard, X5 Retail Group decided to bring network management to a qualitatively new level of automation and provide appropriate IT support for the high growth rates of^[2].

The peculiarity of the upcoming project was to automate the management of functions that were previously carried out almost manually and required significant time and labor from X5 Retail Group employees. In a single system, it was necessary to automate such processes as pricing, assortment management, goods movement, finances, and order of goods.

After reviewing existing retail management solutions, X5 Retail Group preferred SAP for Retail. The selection of the system began back in 2007. And GMCS began to implement the X5 Retail Group system together with GMCS, which was involved in the competition, in March 2008.

In order to minimize risks, the GMCS and X5 Retail Group team developed a strategy for launching the system, according to which work on the project was divided into stages. The strategy involved the gradual abandonment of X5 Retail Group from part of the previously used systems.

Since June 2009, since the start of pilot operation of the new system in the Volga-Vyatka branch (Nizhny Novgorod), X5 Retail Group has been able to increase its competitive advantages by centrally managing the key business processes of 64 of its stores in this region. The functions of a centralized auto order were the first to work, the company management was provided with the opportunity to obtain the necessary management reports on the work of the branch. As of 2010, the system reflected the merchandise movements of all stores in Nizhny Novgorod - parishes, write-offs, production, inventory, sales.

The implemented system allows the X5 Retail Group to effectively manage pricing: pricing is carried out automatically in SAP for Retail, based on the price proposals of other market players. The new system supports common principles for managing the assortment of stores, so that the retail chain can implement a clearer assortment policy, optimize purchases, adjust purchase and retail prices, and when opening new stores, form their assortment and prices in the minimum time frame. The management of promotions is subject to a single logic.

For the convenience of the specialists of the financial department of the retail network, GMCS automated in the system the processes of mutual settlements with counterparties, accounting for goods movements and other accounting transactions. The Business Intelligence module ensures that the company's management receives consolidated operational corporate reports, including specialized reports for departments in the necessary analytical sections.

The duration of the main work on the project was 18 months. After that, X5 Retail Group and GMCS continued cooperation on the next stage of the project, which involves the launch of the system in the remaining branches of the retail chain until the end of 2010. The project in X5 Retail Group, implemented by GMCS, was awarded by SAP "For the highest quality project for the implementation of SAP for Retail in the CIS.

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