ERP Implementation Case Studies

1. ERP IMPLEMENTATION(CASE STUDIES)-SUCCESS &
FAILURES
National Institute of Fashion Technology,
Gandhinagar
&
USE OF CRM IN APPAREL INDUSTRY
Submitted To-
Amisha Mehta
Assistant Professor
Submitted By-
Nivedita Kumari
Ravish Khan
Sunidhi Kumari
(DFTVI)

2. Enterprise resource planning (ERP) is business
management software—usually a suite of
integrated applications—that a company can use
to store and manage data from every stage of
business, including:
•Product planning, cost and development
•Manufacturing
•Marketing and sales
•Inventory management
•Shipping and payment

3. ERP Implementation
Success

4. Company Background
• Pantaloons Fashion & Retail Limited is an Indian
premium clothing retail chain.
• Pantaloons was previously controlled by the Future
Group, but has now been taken over by Aditya Birla Nuvo
Limited (ABNL).
• Headquartered in Mumbai (Maharashtra, India)
• Operates through nine million square feet of retail space,
Over 750 stores across 61 cities in India and employs over
34,000 people.
• It launched Big Bazaar, food bazaar, E-zone and other
outlets throughout the nation basically in the Retail
Sector.

5. Need For ERP In Pantaloons
• To win the customer’s in the frontline.
• The basic need was to robust transaction management system
and provide enterprise wide platform to run the operations.
• Looking for a solution that will bring businesses together.
• To improve financial tracking and reporting for all retail locations .
• Enhanced decision making by providing more granular, real-time
information

6. Solution : SAP retail solution
Implemented by : SAP team with the help of Novasoft,
Number of users : Around 1,200
Time taken : About six months
Cost of implementation : About $10 million
Implemented in three phases
• Phase one: Blueprinting
• Second phase: Development of SAP platform
• Third phase: Deployment
The Solution - SAP (Systems Applications and Products)
The project was flagged off on 15th June 2005 and took about six months to finish. It
went live at the head office on 1st January 2006. The stores went live on SAP from 1st
January 2006 to 30th June 2006.

7. SAP applications provide the capability to manage financial, asset, and
cost accounting, production operations and materials, personnel, plants,
and archived documents.
The Solution - SAP (Systems Applications and Products)
• A “perfect fit” for an enterprise-wide
implementation
• Complete data integrity and real-time
updates
• Expert support during migration effort
• Low Total Cost of Ownership
• Significantly reduced infrastructure
• Expected timely completion of the project
Why SAP
Was
Selected?

8. Phase one: Blueprinting
Second phase: Development of SAP platform
Third phase: Deployment
SAP Implemented in three phases
1st Phase: Blueprinting existing processes and mapping them
In this phase, the entire project team worked on current processes within the
structure of the organization, analyzed and drafted them. This blueprint was
later used in the formation of new states of the solution.
Sponsor Steering team Project team
Functional
experts

9. 2nd Phase: Developed SAP platform
• SAP platform was developed after evaluation of Pantaloon’s needs and
expertise in retail solutions.
3rd Phase: Deployment
• Last phase was for stores to switch over Current data to be migrated
to the new SAP application
SAP Implemented in three phases
Setups &
Configuration
Testing Walkthrough
UAT
Environment Training
Data
Migration
Verify
Gap
Identification
Migrate

10. Challenges
• The difficulties were faced during the data migration and in managing
the interim period.
• People were Not convinced about the need for ERP and did not see
why it was necessary.
• Pantaloons has not been able to see immediate benefits from this
implementation.
• Pantaloons Earlier started working on MAP (Merchandise Assortment
Planning), Auto-Replenishment and Purchase Orders.

11. Pantaloons : Benefits of ERP
Financial and Strategic Benefits
• Greater business insights
through more accurate and
timely financial information
• Lower costs via convergence of
financial accounting and
controlling
• Enhanced data quality
Operational Benefits
• Increased business
transparency via drilldown
reporting capabilities
• Real-time, continuous
reconciliation of cost elements
and expense accounts,
• 5% to 10% reduction in
accounts receivables
Organizational Benefits
• Uniform Organization Structure
• Unified single platform &
Information Architecture
• Integrated work environment
• Improved management reporting &
decision making
• Allowed integration with systems of
associates and business partners
• Helped in routine decision making
• Allowed streamlining of business
processes

12. Conclusion
• At Pantaloons ERP system made management of business a lot easier by
utilizing the computing power offered by the Information Systems (IS) in an
integrated and consistent manner.
• The ERP Information Systems facilitates faster and better management
decisions in Pantaloons by providing crucial information in a timely
manner.
• It also eliminates errors caused by multiple input of the same data required
in disparate legacy systems.
• ERP Systems have been found to deliver high ROI despite their high initial
and maintenance costs.

13. ERP Implementation Failure
Case Study

14. Background
• Overstock.com, is an American online retailer.
• Headquarter: Cottonwood Heights, near Salt Lake City, Utah, US
• CEO: Patrick M. Byrne
• Launched in: May 1999
• No. of Employees: 1500
• Overstock went public in May 2002, and after achieving significant
growth and profits in some early quarters, achieved a profit of $7.7
million in 2009
• In 2010, it reported its first billion-dollar year
• In early 2011, Overstock started rebranding as "O.co" to simplify and
unify its international operations but interrupted this effort a few
months later, citing consumer confusion over the new name.

15. • Before 2003, Overstock was using a home grown ERP package which recorded
customer transactions in batches. In 2003, Overstock decided to implement
Oracle Virtual Machine ERP to record daily transactions and avail benefits.
• Oracle VM is a platform that provides a fully equipped environment to better
leverage the benefits of virtualization technology.
Need For ERP in Overstock.com
ExpectedBenefits
Improve service, quality
Inventory and sales activities in one system
Provide responsive customer services
Increase productivity, efficiency and effectiveness
Eliminate unnecessary activities
Integrate all facets of the business
Compete against online giant’s like Amazon and e-Bay

16. Impacts
• Overstock.com's customer tracking systems were down for nearly a
week.
• Investors lost money because for five and a half years overstock had
reported false financials and led the company in 2008 to reduce its
revenue over that time period by $12.9 million and a net loss of $10.3
million.
• In October 2008,Overstock realized the new ERP system was not
reducing the amount of cash Overstock received from its credit card
processors on solve customer refunds.
• The new ERP system also failed to subtract shipping revenue for those
cancelled orders. The $2.95 charges per order eventually added up over
time and became huge loss.

17. Leader Centric—
• Byrne has a strong personality dominance and has been known to be an overly
aggressive CEO who takes on more technology projects than his team can actually
complete without regard for consequences.
• Patrick Byrne urged the implementation of the new ERP system in record time for
the holiday 2005 season.
• So, Byrne’s authority and especially strong character dominance contributed to the
failure of the new ERP System.
Lack Of Research—
• The short timeline contributed to the lack of research and development of the
Oracle ERP system.
Lack of Contingency Planning—
• There was no contingency planning to deal with changes in the business
operations.
Reasons For Failure

18. Highly Controlled Implementation
• Overstock established its tasks, timelines and executed the project like a machine,
tightly controlled.
Insufficient Testing
• Due to the rushed schedule, some modules testing was skipped. Besides, the system was
not properly tested to identify its shortcoming in handling large amounts of orders.
There was inadequate testing and insufficient time to debug the system to ensure its
functionality.
Short Timeline
• A rush to implement caused early design problems, putting the ERP package out-of-sync
with accounting software.
Reasons For Failure

19. Over-ambitious Project Scope
• The project team members and information system staff were unfamiliar with the
Oracle ERP hardware, systems software and application software.
• The project scope was large, complex and had an integrative nature. Some
technical problems of great complication were not managed well by the IS people,
so additional expenditures and time were incurred.
Poor Management Support
• Initially management were supportive and committed to the project. However,
once the implementation started, management was reluctant to acknowledge the
system problems.
Reasons For Failure

20. Conclusion
The failure of Overstock.com can be used as a lesson for companies who
plan to implement an ERP system. The following recommendations
could eliminate the incurrence of a similar failure:
• A project steering committee should possess high level of expertise,
both technical and operational in the software selection process.
• Comparison among different softwares, evaluation of their pros and
cons and identify the one which best fit the business needs.
• Seeking the advice of one or more consultants.
Software selection—

21. • An ERP project should get the involvement of all stakeholders, including end users
and customers of the company.
Stakeholders’ involvement—
Contingency plan—
• Contingency plan of how to survive in case of system failures should be developed.
Thorough testing—
• Develop an organized comprehensive testing plan, encourage user participation in
the testing, and make sure adequate testing scenarios are conducted to the new
system.
• Top management and the implementation team should have a close communication
with the software vendor, consulting firms and IT people, ensuring that the project
progress is running on the right track, and the project goals are continuously
adhered to.
Close monitoring of project status—
Conclusion

22. • Quality assurance and control programs to ensure system checks are in place should
be developed.
• Business metrics to measure project’s intended benefits versus what has actually
been achieved should be developed.
Post implementation review—
Realistic project scope—
Seek end user support—
• All employees should be well-trained in the new software. Address to the concerns
of the end users and minimize their negative feelings to the new systems. Identify
the change agents and create a high morale to meet the new challenges.
• Project scope should be clearly identified with realistic time targets. Critical
milestones should be set. If necessary, implementation can be piloted in a certain
section or rolled out in phases.
Conclusion

23. ERP Module-
Customer Relationship Management
(CRM)
And Its Use In Apparel Industry

24. Customer Relationship Management (CRM)
• CRM involves managing all aspects of a customers relationship with
an organization to increase customer loyalty, retention, and an
organization’s profitability.
• CRM is concerned with the creation, development and enhancement
of individualised customer relationships resulting in maximizing their
total customer life-time value
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25. CRM As ERP Module
• Functions within a business organization are often referred to as
‘front-office’ or ‘back-office’ depending upon whether they are
‘customer-facing’ like an inside sales group or a customer support call
centre, or are more internally- or supplier-oriented like
accounting/finance, purchasing or manufacturing.
• ERP’s Customer Relationship Management or CRM module addresses
the former, and includes capabilities that are intended to help
‘customer facing’ departments in the company like sales, marketing
and customer service/support do their day-to-day jobs.

26. • The main focus of a CRM system is to help ensure that customer needs
are met in a timely and efficient manner, so that customer satisfaction
is maintained a high levels throughout the organization and with
every customer interaction, and so that the company’s revenue and
profitability goals are able to be met or exceeded.
• By having CRM integrated with an ERP system, it is possible to gain
and maintain a ‘360 degree view’ of the company’s customers and to
support analysis which helps to identify the most important and
profitable customers, as well as the less profitable and more costly
ones.
CRM As ERP Module

27. The Elements Of CRM
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28. Features Of CRM Module
Account Management
• CRM module allows users to enter and maintain various demographic and other
information of customers, and even other organizations like business partners,
associations and competitors.
• Companies can be organized into hierarchies to track the ‘parent-child’ relationships of
parent companies and subsidiaries at multiple levels.
Contact Management –
• An unlimited number of contacts can be maintained for each company/account, with one
being designated as ‘primary’ for each Account.
• Multiple phone numbers, email addresses and physical addresses can be managed for each
contact.

29. Lead & Opportunity Management –
• Its lead and opportunity management capabilities allow sales and marketing personnel
to track interactions and interest with accounts from the very first (e.g. a trade show
‘lead’) to multiple individual sales opportunities for different products or services the
account may be interested in, with forecasting and tracking.
Quotes & Proposal Management –
• With CRM module one can quickly and easily see quotes and proposals that the
company have sent prospects and customers and turn these into sales orders when they
are sold.

30. List & Query Management –
• The CRM module of ERP allows users with the ability to build, use and reuse powerful
SQL queries via a standard Query by example query capability.
Activity & Project Management –
• CRM module lets users manage all kinds of activities like calls, appointments, ‘to-do’s as
well as build their own specialized types of activities and track them.
Problem Management –
• Tracking problems and identifying trends so that major customer service issues can be
addressed proactively is an important feature that CRM module’s problem management
feature have.

31. Benefits Of CRM
• Reduces costs by effective and efficient operation in use.
• Increased customer satisfaction, because they are getting
exactly what they want by meeting their expectations.
• Growth in numbers of customers.
• Increased level of automation through workflows.
• Ensures that the focus of the organisation is external
• Increased access to source of market and competitor
information
31

32. Continued..
• Maximisation of opportunities (e.g. increased services, referrals, etc.)
• Highlighting poor operational processes
• Long term profitability and sustainability
• CRM enables an organization to:
 Make call centers more efficient
 Cross sell products more effectively
 Help sales staff close deals faster
 Simplify marketing and sales processes

33. CRM Applications In Apparel Industry
33
Customisation for the Customer
• CRM is implied in the clothing retail shops keep customer details and their buying
habits. The organisations analyse their customer buying trends, consumer behaviour and
life style.
Loyalty Programmes
• The clothing retail companies give discounts occasionally to loyal customers.
Analysis of Results and Discussion
With increasing pressure to reduce time to market, one needs the right product at the right
time. With their forecast module apparel industry can anticipate demand at the style, color
and size level, utilizing colour and size percentages.

34. Continued..
34
Standing out from the crowd
• Keeping all the data and understanding customers and figuring out the best ways to
engage with them by information stored in CRM software apparel company
Going mobile
• Mobile CRM is being introduced and accessed while the customer is still roaming the
floor. Sales associates are able to access the customer purchase history to determine what
the customer has purchased previously and determine what inventory is available locally
or in another store

35. Continued..
35
Share & Update:
• Share the customer profile transparently with the client and ask for updates by build trust
and loyalty.
Ensure data integrity by
• Business data analysis
• Customer loyalty program setup
• Business process optimization and adjustment
• Points program and customer communication plan
• Marketing campaign planning based on data analysis, implementation, tracking,
assessment and feedback.

36. The Effects Of CRM In Retail Market
• Segmentation:
 CRM helps to gather information about each of the customers which helps to adjust the retail
strategies to better suit the customers.
• Purchases:
 A CRM system keeps records of customer purchases and customer service calls to keep a check
whether there have been any warranty or dissatisfaction issues with the purchase.
• Retention:
 The overall effect of CRM is to increase the retention of customers by serving them in a more
focused and convenient way.
• Promotions:
 The data to gather within a CRM system tells not only target a market segment with
promotions that appeal to its members, but also to target individual customers.
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37. Concluding Suggestions
• Frequent training programmes for the store managers.
• Shared values among employees by treating the employees better so that they in
turn treat the customers better.
• Retailers should attract the customers by providing better service and great
shopping experience.
• Following an effective complain management process so as to retain the
customers and there by gain loyalty.
• Use customer feedback and service audit experiences to identify the failure.
• Continuous measures and monitoring of customer satisfaction should be done
as it eases the process of setting standards thereby helps to handle competition
at a better state.
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38. Bibliography
• http://www.overstock.com/
• http://www.zdnet.com/article/overstock-com-accepts-blame-for-erp-problems/
• http://www.pcworld.com/article/152863/article.html
• http://www.computerworld.com/article/2551601/enterprise-applications/overstock-s-erp-woes-force-it-to-
restate-results.html
• http://www.ciozone.com/index.php/Tools/ERP-Errors-Lead-Overstock.com-To-Restate-Earnings.html
• http://www.zdnet.com/article/overstockcom-accepts-blame-for-erp-problems/
• http://www.cio.com/article/2373728/enterprise-software/overstock-com-s-four-year-erp-
nightmare.html?page=2
• http://investors.overstock.com/phoenix.zhtml?c=131091&p=irol-newsArticle&ID=1217030
• https://docs.oracle.com/cd/E11081_01/doc/doc.21/e10901/overview.htm
• http://www.oracle.com/us/technologies/virtualization/oracle-customers-succeed-ovm-wp-1734013.pdf

39. • http://people.stfx.ca/x2009/x2009iuo/OLD%20SHEEEEEIIIT/Operations%20Management%20Presentation/The%20impact%20
of%20ERP,%20SCM,%20CRM.pdf
• http://www.straightmarketing.com/customer_relations_management.asp
• https://domino.fov.uni-mb.si/proceedings.nsf/0/1a2a3bcf05723dd1c1257757003da781/$FILE/33_Schubert.pdf
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40. • http://www.cio.in/case-study/pantaloons-makes-it-strategic-function
• http://www.networkmagazineindia.com/200703/casestudy02.shtml
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solutions-provider-mysap-business-suite-infrastructure
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