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March 7, 2006 4:38 pm

Life after death of a supplier

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Not everyone is pleased when the trusted provider of their business applications gets swallowed by another company.

With Oracle on an acquisition spree over the past two years, some industry watchers expected clients of the bought-up companies to jump ship. Fewer than expected have, but Hugo Boss, the German fashion company is one that did.

It was formerly a client of Retek, a retail software systems supplier bought by Oracle in March 2005.

Hugo Boss took advantage of the “Safe passage” incentive programme set up by SAP to woo disgruntled customers of recent Oracle purchases.

SAP started the project in December 2005, and the first part of the pilot is due to be switched on in Germany and Switzerland in October. The company plans to have the system running in 70 stores around Europe within two years.

Hugo Boss already uses SAP software for parts of its business, so it decided to use the company’s SAP for Retail software for the point-of-sale cash till systems and other operations in its stores.

“We already decided to use SAP Apparel and Footwear Solution (AFS) to run our supply chain. Therefore, using SAP for Retail allows us to integrate and extend our supply chain using a single system that handles everything from the planning and development of our products to the point of sale systems,” says Dr Werner Lackas, a member of the managing board.

For Hugo Boss, the vendor who supplies the software is not the most important factor. Having a single supplier is more crucial.

“The software itself is not the competitive advantage,” he says.

“Among the key success factors are: using just one central Enterprise Resource Planning system; using the same processes throughout the organisation; and reducing the extent to which you rely on systems from third parties, or that you have developed yourself.”

Using software supplied by a single vendor makes it much easier to integrate different business software systems.

In this case, Hugo Boss will be using SAP’s own middleware integration system, NetWeaver, to tie the new SAP for Retail system in to its existing supply chain system.

Hugo Boss is being careful to make the smallest possible number of adaptations to the system, as a highly customised ERP system can be expensive and difficult to maintain or upgrade.

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