In 2004 General Pants sought to improve its overall financial and operational efficiency. This improvement should not only serve its customers better, it should also expand the company’s business in the future. Therefore a transparent accounting and financial system along with efficient analytics was identified as the fundamental step to make key decisions necessary for future expansion.
Based on various internal discussions and comparisons among various products, General Pants decided to invest in an industry-specific ERP solution. The company not only choose mySAP All-in-One because the solution addressed its key business pain areas. The solution was also recognized as a highly competitive investment compared to other vendors. mySAP All-in-One’s ability to easily integrate with existing applications, including third party Point of Sale (POS) and Inventory Management systems was crucial. Moreover the solution was able to support and provide technical solutions especially build for the fashion and retail industry – data management for style, color and size, open-to-buy functionality, customer loyalty programs and customer centric category management.
In March 2005, after ten days of preparation and 15 days of blueprinting, General Pants began implementing the mySAP All-in-One solution with SAP’s partner company Supply Chain Consulting. The implementation team comprised of four dedicated consultants from Supply Chain Consulting and two employees from General Pants. The solution went live in June 2005, with the desired 10 day training in financial and management accounting, procurement and project systems provided to more than 20 employees from General Pants. The training material was customised by General Pant’s staff from templates provided by Supply Chain Consulting – an impressive proof for the value of active knowledge transfer during realisation phase.
30 percent increase in overall operational efficiency
General Pants achieved a 30 percent increase in overall operational efficiency as a result of implementing the mySAP All-in-One solution. General Pant’s financial processes have for example become more effective, because of the systematic entry of all financial data and reduction in data redundancy. This integrated system assists better and more in-depth analytics to facilitate key decision making. Furthermore, the accounting procedures have been more streamlined due to the resolution of related accounting issues, such as reconciliation of errors and reversal of journal entries. Moreover the turnaround time of reports has been reduced 9 days (from 12 to 3 days), a significant evidence of an increase in operational efficiency. The use of the integrated mySAP All-in-One solution results in the availability of accurate data at a faster rate.
The integration of various systems across locations helps General Pants to reduce data re-entry and man hours needed for manual reporting, provides easy identification of errors, higher visibility and control of inventory, and provides a strong foundation for further addition of modules such as merchandising and logistics. This lays the foundation for General Pant’s to further grow and expand.
Annual ROI: 15.8 percent
Key costs incurred were from the purchase of consulting services, software, personnel, hardware, and training. Consulting made up the largest portion and accounted for 36.2 percent of the total project cost. This includes the time spent by four consultants from Supply Chain Consulting for the implementation of the solution. The software cost including annual maintenance accounted for 29.8 percent of the total costs.
Personnel accounted for 18.2 percent of the total cost, and included the time spent by two internal General Pants’ employees to support the implementation. The initial cost incurred on the hardware purchases for the mySAP All-in-One solution implementation accounted for 11.4 percent of the total costs. The cost of training totaled about 4.4 percent of the company’s total investment in the mySAP All-in-One solution. The cost of training included both trainer cost and cost of employee time spent on training.
Frost & Sullivan has estimated that 15.0 percent of the incremental revenues and a savings of 25.0 percent ensued through the implementation of the mySAP All-in-One solution. Intangible benefits of the implementation of the mySAP All-in-One solution include a positive impact on corporate image and customer satisfaction. The payback period for this deployment is three years and five months. According to Frost & Sullivan the annual ROI will be 15.8 percent.