IBM and SAP Expand Global Strategic Alliance to Drive Efficiency and Innovation in the Retail Industry

Combined Retail Software and Services Offering Will Help Retailers Improve Their Operations and Respond to Changing Market and Consumer Demands

New OrleansIBM and SAP AG (NYSE: SAP) today announced an expansion of their global strategic alliance aimed at enabling leading retailers to strategically transform their businesses to meet rapidly changing consumer demands and global competition. SAP and IBM jointly agreed to promote the end-to-end retail offering comprised of the solution set of SAP and IBM retail solutions and technologies, leveraging in particular IBM store capabilities and SAP retail business solutions. This alliance is designed to help retailers maximize business efficiency and create distinctive customer experiences. The announcement was made at SAPPHIRE® ’04, SAP’s international customer conference being held in New Orleans, Louisiana, May 11 – 13.

Retailers worldwide are faced with unprecedented challenges and opportunities driven by rapid advances in technology, heightened global competition and discerning consumers who are demanding more choices and convenience in how they interact with retailers. To capitalize on this convergence of forces, retailers need new technologies and business models that are integrated from headquarters down to the store level with a flexible, resilient, real-time operating environment. By transforming their businesses to become more integrated and responsive, retailers have the ability to act instantaneously on consumer demands and changing market opportunities.

The IBM and SAP joint offering will allow retailers to leverage existing applications and align their IT infrastructures to reduce costs and support new technologies such as radio frequency identification (RFID).

“Retailers are at a strategic crossroads in their business,” said Christian Nivoix, general manager, IBM Worldwide Distribution Sector. “The retailers who will thrive are those who choose to become an on demand business by integrating technology and new business processes to maximize growth, operational efficiency and customer service. As a result of this alliance, SAP and IBM will be combining leading solutions, technology, services, innovation and best practices and infrastructure to provide retail businesses with a unique advantage across their entire enterprise.”

The joint IBM and SAP products, platforms and services can help customers reduce their total cost of ownership for retail IT solutions and increase revenue. Customers can deploy in stages depending on their specific needs and organizational capabilities. SAP and IBM jointly agreed to leverage their combined assets and infrastructure (such as SAP for Retail, SAP NetWeaver™, IBM Store Integration Framework and IBM WebSphere) according to the needs of their joint customers in the retail industry. The effort also includes solutions and services for merchandise management, POS data management, Web-based workforce deployment, merchandise and assortment planning and advanced forecast and replenishment. IBM and SAP will also help customers improve store performance by migrating to state-of-the-art, open software solutions for master data management and RFID integration.

“Consumers today expect superb quality, selection and service, therefore retailers must strategically align business processes and enable technology to efficiently deliver on these demands,” said Léo Apotheker, member of the executive board, SAP. “As two of the strongest, most experienced vendors in the retail market, SAP and IBM will best equip companies with the technology, best practices and business processes they need to manage the end-to-end value chain effectively and profitably, surpass customer expectations and evolve with future market changes.”

In addition to combining the two IT leaders’ innovation and integration capabilities for retail, IBM and SAP will collaborate in the new agreement to share consulting knowledge and enhance offerings in areas of business process analysis and best practices. Retailers will also benefit from capabilities in supply chain, human resources, store operations, customer relationship management, finance and evolving technologies.

About IBM
IBM, the world’s largest information technology company, is the leader in providing the Retail Industry with a full range of e-business solutions, including: point-of-sale systems, automated self-checkout systems, other hardware and software technology, consulting focused on business transformation, IT strategy and planning, store operations improvement, and supply chain optimization, and with services, such as outsourcing, managed operations, systems integration, and application development and design. IBM has a list of retail customers in 100 countries worldwide that reads like a “Who’s Who” of retailing. For more information on IBM Retail Solutions, please visit www.ibm.com/industries/retail/