Technology and non-IT: how and why S / 4HANA is used in wholesale

We have already said that modern shops have a complex infrastructure . But the same can be said about the companies that are engaged in wholesale trade - it also uses sophisticated and advanced IT solutions.



SAP S / 4HANA developers in Habré have already talked about how the system works with big data. Today we will talk about how this product is introduced in the wholesale trade, what mistakes are made and what results the business can achieve.

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Why do you need S / 4HANA

S / 4HANA is a hardware-software complex that includes hardware optimized for solutions on the SAP platform and pre-installed SAP software. The system is needed to quickly obtain analytical information for making business decisions. Below we will talk in simple language about how it is used.



Frequently, the situation with data analysis is as follows in wholesale trade: when a management is interested in a specific issue, it asks subordinates for a report. They, in turn, begin to manually search for the necessary information, contacting colleagues, sometimes even in branches from different cities.



Information is downloaded from various systems, supplemented manually and compiled into a common document, usually Excel. Then the company executives analyze this report and make some important business decisions. The whole process can take from a day to weeks.



A much more effective approach here is the use of systems like S / 4HANA, which allows managers to set important metrics and see their changes in real time on the computer screen, mobile device, as well as generate various reports on the fly.

How to implement the system

As a business grows, a situation may arise in which its further development requires changes in business processes and more automation, otherwise there will be insufficient data for making important decisions, or it will not be possible to fulfill the planned plans due to inefficiency of work.



A business can deal with this on its own, but it’s rather difficult to solve the problem of choosing automation systems and introducing them to a company that is engaged in wholesale sales. Therefore, expert companies, such as Pilot, which have a department specialized in implementing SAP software solutions , are usually involved in such projects.



External analysts study the business and formulate recommendations on which business processes and how to automate, and also determine which tools should be used to do this. For this purpose, existing processes are described in detail in the format in which they are working now. Then you need to understand exactly how the process should look like in the end. This is where the most common problems arise.

Errors and solutions

Not always the introduction of complex systems like S / 4HANA leads to the desired results. Often the reason for this - the mistakes that are committed by managers and ordinary employees of companies. Below we list some of them and talk about how to avoid them.

Mistake # 1: Misuse of the System

Sometimes managers want to implement S / 4HANA, not to improve the quality of business decisions, but to accomplish tasks that they think are important to the company. Moreover, in reality this may not be so at all. As a result, a situation may arise like the one that took shape on one of the implementation projects, which was led by Pilot specialists.



The management of the customer company decided to develop about 50 reports that were used in the daily work of users in ongoing processes. In this case, it was necessary to almost double the project budget allocated for development and refinement. The opinion of consultants on the use of standard reports was not taken into account.



After a year of operation, it turned out that most of the reports were not used - this was evident from the statistics of program launch. Her analysis showed that after users got used to the system, they had enough standard reports to work. So the money for the development and introduction of new ones was wasted.

Mistake # 2: waiting for a miracle

At the other extreme, when implementing it, rely on the fact that the new system alone will solve all the problems of the business. This is not a silver bullet, S / 4HANA provides important information with which you can already make important decisions. But the system itself will not generate this decision for the head.



As a result, it may turn out that the company is implementing S / 4HANA, management is waiting for improved performance, a beautiful press release is issued about this, but key users do not understand the point of using the system. Sometimes we hear phrases of such content: “In our press release it is indicated that we have very successfully implemented a new system in the planned time and budget, but I don’t have an understanding of what exactly has changed in the business itself.”



It is important to implement not new-fangled software, but management systems suitable for the tasks of a specific company - it is not easy to choose one without the involvement of professional consultants.

Error # 3: insufficient user information

Most people do not like change. Especially if you need to retrain and move from one business process and the program used to something new and unfamiliar. This applies to both ordinary employees and managers. And in the latter case, it is even more dangerous, since such people have real powers, and they may try not to change business processes for a new solution, but to reformat the same S / 4HANA for old, not optimal, but familiar processes or force the program to create reports in the old format.



Products from large vendors like SAP can literally break familiar business processes during implementation; this is always a difficult stage. However, in the end, the company gets a solution based on best practices and global experience - after all, these ERP-systems are used by tens of thousands of companies around the world, and its developers have extensive experience.



The experience of line staff can be quite reasonable - at least, because an increased degree of automation often leads to reductions. But this is an inevitable process associated with the development of business, so it is not necessary to speak about the “uprising of machines” either.



The main task of our team at the stage of preparation for the implementation project is to explain to users the new business processes of the company, to precisely clarify the role and steps taken by each player of the team in this process. If you involve employees in the learning process even at the stage of testing the system, you can quickly transfer to them the knowledge of how the new business process will work. Also, if the user sees how the introduction of a new tool can help him in his work and further promotion, then this will be an additional motivation to learn.

What results can be expected: a few numbers

In conclusion, let's talk about what results can be achieved by the implementation of SAP ERP-systems based on the example of real companies from the retail sector.

Increase the speed of opening new points

Our experience suggests that the introduction of SAP ERP-system allows growing retail networks to significantly increase the speed of opening new points. So one of the largest online hypermarkets in one year (2013) was able to increase the number of own cybermarkets to 29 and outlets to 130, becoming the fastest growing online store in Russia.



A retail network of offline stores "at home" from the North-West region of the country was able to increase the number of opened retail outlets by almost 50%. A similar company from Udmurtia, in turn, has managed to achieve a reduction in the timing of opening new outlets by 80%.

Increase the speed of business processes

The same retail network from Udmurtia, by introducing a new system, has reduced the processing time of goods in stock by 20%. The metropolitan network of electronics stores has also achieved results, increasing the efficiency of data exchange between the parent organization and sales offices. A major retailer of alcoholic beverages has accelerated basic work operations by 20%.

Reporting Optimization

The above network of electronics stores through the use of ERP-system increased the accuracy of commercial, financial and accounting information by 30%. The timeline for the preparation of management reports from another customer who is engaged in wholesale sales of alcohol products has been reduced to the same figure, and the network of convenience stores has reduced this time by 20%. Another similar network reduced the closing period of reporting periods to 20 procedural days.

Conclusion: who needs it

In fact, the practical experience of our company suggests that not all companies should implement S / 4HANA. First of all, there is no need to strain a small business so hard - sometimes Excel can really be enough. In the case of large companies, a certain degree of readiness to introduce such a product is necessary.



Therefore, before the launch of the implementation project, our analysts study in detail the customer’s business and how everything in the company is working at the moment. It is possible that the customer will receive recommendations on what he needs to do so that the implementation of S / 4HANA could bring the greatest effect - then he will need to first carry out the preparatory work.