Empanadas, a dozen roses, diapers, flat-screen televisions: What ties this seemingly random list of items together is Berlin-based Delivery Hero, which began as a food delivery startup in 2011.
Nine years later, the company owns subsidiaries operating in 44 countries that offer everything on demand — from kitty litter to pizza. Each quarter, €2 billion of merchandise pass through its systems and in the third quarter of 2019 it reported year-over-year growth of 117 percent.
As it expanded quickly through acquisitions, the company encountered some road bumps, according to Johannes Langguth, the senior director of Finance and head of IT: “A key challenge we confront is how to balance localized service with global service.”
Some of these challenges were not IT related. “We have a brand called foodpanda that’s big in Singapore and the whole market approach and brand is different because customers look for something different in every region and each country,” says Langguth.
In addition, as Delivery Hero grew, timely payment became challenging for the publicly traded company (Xetra: DHER) with a growing roster of partners. That’s when executives decided to put in place a robust, centralized software infrastructure that could adapt to the specific needs of each market.
Building a Global, On-Demand Ecosystem
To do this, Delivery Hero worked with SAP to deploy the cloud-based intelligent enterprise resource planning (ERP) suite SAP S/4HANA as its enterprise backbone on top of Amazon Web Services. The company now runs invoices on finance applications for SAP S/4HANA, helping to ensure that restaurants and retailers get paid on time.
“Our customers include restaurants, grocery stores, pharmacies, and flower stores. We want to create an on-demand ecosystem, but to do that we need to keep this community happy,” says Langguth. If suppliers don’t get paid quickly, they will work with another delivery service, which would mean Delivery Hero offering consumers less choices. “It used to take the whole weekend to run receipts, now [with SAP S/4HANA] we do it in just a few hours.”
With SAP S/4HANA up and running, Delivery Hero has integrated other SAP applications, including cloud-based analytics and SAP Ariba software for procurement. Langguth’s team also used SAP governance, risk, and compliance solutions to create a digital boardroom that helps executives stay on top of internal audits, comply with global reporting and accounting requirements, and identify business risks.
Intelligent ERP Helps Asia-Based foodpanda
As Delivery Hero rolls out the solution globally, it is benefiting subsidiaries like foodpanda, which operates in Europe, Canada and Asia.
Luc Andreani, managing director of the Singapore branch, explains, “One of our two main sources of revenue is the commission we charge restaurants for the services we provide, including the generation of orders, delivery, and marketing.” foodpanda processes the customer charge and then distributes payment to vendors, minus its commission.
Previously, it used a billing solution created in-house with support from an IT services provider, “but there were some stability issues, so we moved to SAP a few months ago and it’s allowed us to have a much more stable billing environment,” Andreani says.
The company currently pays vendors every two weeks, but since standardizing its financials on SAP S/4HANA, Andreani believes it can consider increasing payment frequency.
Delivery Hero works with almost 8,000 food providers ranging from Hawker Centers (the Singapore equivalent of food courts) to upscale restaurants; and aims to provide “hyper-express delivery” within 25 minutes (compared to Amazon’s same- or next-day delivery.) More seamless integration across business processes will help them get there. Andreani says, “the vision at the end of day is to move away from a collection of disconnected, or manually connected systems, to SAP as the main system that backs our processes starting with finance and potentially extending to more processes further down the road.”
For Delivery Hero, Customer Experience Is Everything
For a digital marketplace, customer experience is everything. Langguth installed Experience Management (XM) solutions from SAP (Qualtrics) to help managers understand how people feel about their experiences with Delivery Hero. “Our vision is to always deliver an amazing experience and [XM] helps us achieve that vision,” he says. “It’s the DNA of our experience management approach.”
With each delivery, customers are asked to fill out a survey. “This helps us identify whether consumers are happy, and we use the feedback to improve service,” Langguth explains.
Measuring customer experience has a direct business impact: The company uses the data to better price services, understand what drives customers, and anticipate what they may want next. After its first year using XM, Delivery Hero reported that customer service satisfaction has increased by up to 30 percent.