The Foschini Group (TFG) is one of the leading retailers in South Africa and counts on SAP to manage its financial operations that include over 1,600 retail stores. TFG needed to upgrade from 4.7 to ERP 6.0 but the allocated budget was lower than their calculated needs.
Using Panaya, TFG upgraded to ERP 6.0 while saving 85% of the allocated budget, saving 100% on outsourcing costs, reducing code corrections by 60%, unit testing by 50%, and ending up with a project 50% shorter than planned.
Read this brand new case study to find out:
- What the main upgrade challenges were
- Which solution was chosen
- How the implementation went
- What were the upgrade implementation results
- What is TFG's advice for other companies upgrading to ERP 6.0
The Foschini Group (TFG) opened for trading in 1924 and has been listed in the South African stock exchange since January 1941. Today, TFG is one of the leading retailers in South Africa, with recent expansions into Zambia expanding its footprint. Now comprised of 14 trading brands such as Donna-Claire and Markham, TFG specializes in lifestyle products, from fashion to cosmetics to sporting apparel. Since 2006, TFG has counted on SAP to manage its ?nancial operations that include over 1,600 retail stores. TFG's SAP systems are supported by Foschinidata, TFG's internal IT services division.
In 2008, TFG's Gerhard Mitton was feeling the heat. As a Senior Department Manager at Foschinidata, Mitton was charged with creating the project plan for the ERP 6.0 upgrade. Although the upgrade was originally motivated by SAP's extended maintenance deadlines for 4.7, SAP ended up pushing back the end of maintenance date. But there was no looking back: Foschini Group's business users were now excited about what ERP 6.0 could do for them. One way or the other, Mitton had to make the upgrade happen.
The allocated budget was lower than Mitton's calculated needs. There was also a hard stop deadline to contend with: Foschinidata had to complete the upgrade by the end of June 2010. New store openings in Zambia were planned for September 2010, and con?guration changes such as cross-border currency adjustments would take the rest of the summer. If they didn't ?nish the upgrade by the end of June, they would have to push it back until November/December, resulting in a year-long code freeze from the environment ?rst being worked on – an unacceptable scenario.
Mitton needed a way to hit his deadlines and mitigate the risks. During his upgrade research, Mitton downloaded a white paper from Panaya on avoiding SAP upgrade pitfalls. Soon after, he got a phone call from a Panaya account manager. "Initially, I was very skeptical," recalls Mitton. "It was just the beginning of Software as a Service as a concept. I remember thinking, 'What are you going to do with our code - we're just going to send it off to you? How do we know how accurate your information is?'"
Mitton gave Panaya's demo a shot. "After Panaya ran the analysis on our data, they came back with a result that was very close to the picture I had in my mind, but with much more detail," says Mitton. "Panaya told us how long it should take to do the upgrade and provided a list of the objects we needed to change." Mitton had seen enough: he presented Panaya to his CIO. "The way I sold it to my CIO is: they are bringing us much closer to the end result, much quicker than working through all these issues for ourselves," says Mitton. "Plus, Panaya's price was right – a tenth of what I expected to pay." TFG selected Panaya.
Mitton designed the implementation to work around the business users' schedules: code corrections in late 2009, then the new system would go on ice until the users could pitch in with unit testing during May 2010. Code correction with Panaya went quickly. Mitton's team was prepared for at least three months of code corrections, but with Panaya to pinpoint the results, they were ?nished by the end of 2009 – in just six weeks. With the complexity and uncertainty removed from the application development side, the upgrade was reduced to being mostly a technical exercise on the Basis side. When it became time for unit testing and user acceptance testing, the process was equally smooth: another six week period.
A week before go-live, TFG had Panaya run their reports one more time. "When Panaya's analysis came back clean, that gave us the con?dence to go ahead with the update of our production system over a single weekend," recalls Mitton. Weekends are a crucial time for TFG, with intense retail activity in 1,500 stores. "The risk was huge, to ?ddle with the company's ?nancial systems on a crucial weekend," says Mitton. "But we did it, and there were no problems. By Saturday evening at nine o'clock, we all went home. Sunday, everybody relaxed. It was such a non-event in the end."
Mitton knew the project was a success before he ran the numbers, but they were still eye-opening. Panaya allowed TFG to cut their estimated project time in half, saving 50 percent of the testing time, 60 percent of code corrections and signi?cant savings in cost. As for the limited budget Mitton was nervous about? Only 15% of the allocated budget was spent - an 85% savings. Aside from a short stint with one on-site Basis consultant, there were no consulting or outsourcing costs. "You simply don't need consulting with Panaya telling you exactly where you need to go," says Mitton.
Even with rock solid numbers, Mitton points to an even bigger Panaya bene?t: risk reduction. "If it wasn't for Panaya, I can categorically say we wouldn't have had the sense of comfort to be able to go ahead with the upgrade," says Mitton. "This was a major success story."
Mitton has advice for others moving to ERP 6.0, and he doesn't mince words: "Stop wasting time and get on with using Panaya, you can't go wrong," he jokes. "And you haven't even asked me about their customer service, which is excellent!" Next up for Mitton? TFG is once again teaming with Panaya, this time to get their support packs under control.
But there's a difference this time: the project was a lot easier to sell internally. As Mitton tells it: "The moment we were done with our upgrade project, I went to the CIO and said, 'We're planning the support pack install, can I go ahead and engage with Panaya, as I can't see doing this without them?' The CIO's response? "Go for it!"