Beall's Turns to SAP For Retail Applications

Retailer will retire multiple legacy systems for integrated vertical package

Beall's Inc. helped SAP AG in its effort to expand its business in the retail market by agreeing last week to purchase the integrated SAP for Retail application.

The Bradenton, Fla.-based retailer, which has 600 department and outlet stores and $1.2 billion in annual revenue, plans to replace several aging packaged and homegrown systems with the SAP software.

Joe Iannello, vice president and CIO, declined to disclose the value of the contract with SAP, except to call it a multimillion-dollar deal. Beall's will start rolling out SAP for Retail in September, he said.

Iannello said Beall's plans to use most of the modules in the integrated SAP for Retail software, including the point-of-sale, back-end ERP, finance, human capital management, merchandise management, supply chain and master data management applications.

Beall's currently runs several packaged and homegrown systems, including back-end AS/400 software and 20-year-old, point-of-sale tools from IBM, Iannello said. "We've gotten a lot of mileage out of the existing systems."

Though the older applications are still functioning, they are starting to hit performance constraints as the company grows, he said. In addition, he noted that few IT workers are familiar with Beall's legacy systems. Finding technology professionals experienced in SAP, however, shouldn't be too difficult, Iannello said.

Beall's was looking to use a single, comprehensive, integrated package to modernize its IT systems, he said.

The company also considered Oracle Corp.'s retail software, but SAP proved to be more attractive because of the core ERP offerings and product road map, said Iannello.

He said the software will likely be installed in three phases over several years. SAP's payroll, human resources and point-of-sale applications will be installed in the first phase, he said.

Ultimately, SAP will help Beall's automate processes, improve its supply chain and inventory management systems, and enable improvements in merchandise planning and stock allocation and replenishment.

In recent years, SAP has been pushing hard to expand its presence in various vertical markets, as has rival Oracle, which entered the retail market with its acquisition of Retek Inc. just over a year ago. In the past two years, the number of SAP for Retail customers in the Americas has doubled to to 200, SAP claims. In the beginning of 2006, SAP Americas Inc. launched a separate retail subsidiary for North America.

SAP has been winning customers in retail by emphasizing its core ERP strengths, said Michael Barrett, an analyst at AMR Research Inc. in Boston. SAP acquires many customers in vertical markets by highlighting the integration of packages like SAP for Retail with its human resources, ERP and financials products, Barrett said.

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