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Walmart pushes ahead with SAP rollout after Asda pilot success

Asda demonstrates improved financial reporting ability

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Walmart, the retail giant, is pushing ahead with the implementation of SAP financial tools across the world following the success of the pilot installation at Asda.

In its Q2 results, the company said that the new financial reporting system went live in the US, Canada and Puerto Rico in 1 May. The system implementation started in January 2008 in the UK and went live in June 2009, and the rollout is due to reach Japan in October. This is the first stage of a three-part, overall project called PROFIT.

The SAP system replaces Walmart’s legacy, in-house developed system, which had grown over 30 years. The new financial system runs on an IBM Mainframe hosting a DB2 database and SAP central services on a Z/OS operating system. The SAP Application Servers run on IBM AIX Unix Servers.

“The SAP implementation gave us the ability to improve our methodology for valuing inventory under the retail method of inventory accounting,” Walmart said in its financial report. “We have improved our ability to measure inventory at more granular levels.”

Walmart reported profits of $3.60 billion (£2.3 billion) in the second quarter ended July 31, up from $3.48 billion in the same period last year. Its revenue had also increased by 2.8 percent to $103.73 billion (£66.8 billion).

Meanwhile, Doug McMillon, Walmart’s international president and CEO, said: “In the United Kingdom, Asda continues to make good progress towards their strategic goals.”

David Dixon, SAP programme manager at Asda, told Computerworld UK that Asda implemented SAP’s Financials, which included functions such as general ledger, accounts payable, accounts receivable, capital procurement and asset management. Asda also installed SAP’s Business Intelligence reporting module.

“Walmart realised they needed to replace their financial systems for a more scalable and flexible one, “said Dixon.

“It selected the UK to be the pilot for the global rollout because we are a reasonable size, second to the US in terms of business size, and language wasn’t a barrier. They also felt it [Asda] was a willing business.”

“The main rationale [behind the SAP rollout] was to have a ‘one version of the truth’ approach, to standardise and gain a degree of control around the world,” said Dixon, who added that one of the biggest challenges of the implementation was connecting the system to the global business.

Asda was also aware of the possible impact on its ability to pay suppliers when replacing its financial suite, so testing the systems was crucial for mitigating the risks.

“We ensured we had really thorough testing of what we were doing,” said Dixon.

The company also conducted a “fair bit” of training internally, to make sure that its 600 users would be able to use the new systems, especially as Dixon said that a lot of people were using the Business Intelligence reporting tool for the first time.

Dixon said that the SAP system has introduced a number of benefits to Asda. “We have now reduced the time to close at the end of the month, we have got a more flexible and streamlined payment process and we have got improved reporting. We have also seen efficiency and control improvements,” he explained.

After spending the last 12 months helping the US counterparts rollout the system, and making modifications, Dixon said that the UK will be embarking on the next stage of the PROFIT project, the Advanced Base stage, early next year.

The next stage will involve Asda building on what the company has achieved in its current project, and expanding Asda’s footprint with SAP. This includes looking at SAP’s procurement systems and improving efficiency in the back office.

SAP UK & Ireland User Group Annual Conference

21-23 November 2010, Manchester

Early Bird rate now available click here

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