NTUC FairPrice, the largest grocery retailer in Singapore, has replaced its Oracle infrastructure with SAP solutions, a move that has unlocked innovation for Fairprice and allowed the company to move towards targeted marketing for individual customers in real-time.
NTUC Fairprice Co-operative Ltd was founded by the labour movement in 1973, with a social mission to moderate the cost of living in Singapore. From one supermarket, it has grown to become Singapore’s largest retailer serving about 430,000 shoppers daily, with a network of over 120 outlets, comprising FairPrice supermarkets, FairPrice Finest and FairPrice Xtra.
Its convenience stores, FairPrice Xpress and Cheers, has a network spanning over 160 convenience stores islandwide and serves over 100,000 customers daily. In 2014, NTUC also launched a membership-only retail warehouse that encourages bulk purchases for groceries and household consumables called NTUC Warehouse Club.
FairPrice Online is a virtual supermarket that enables customers to shop from home, and have their grocery shopping delivered to their doorstep in a hassle-free shopping experience, which was further enhanced with a new service in 2015— called Click &Connect — which allows shoppers to buy items online and then collect them at the stores. NTUC FairPrice also owns a Fresh Food Distribution Centre, and a centralised warehousing and distribution company.
In need of a more robust infrastructure
“Our directive was to leverage IT to allow us to continue providing the best service to our customers,” says Zhang Yan, Deputy Director (IT) at NTUC FairPrice.
Yan shared that in the past, the company’s main business challenge was the need to improve the integration of financial and retail systems with a solid data volume management strategy, reduce data volumes to support planned growth and improve the system performance and overall business operations.
In recent years, the company realized it needed a more robust infrastructure, especially a hardware refresh to what already existed and to create a new Data Centre environment for IT infrastructure, in preparation for the new Fairprice Office Hub.
The company also needed a Business Intelligence upgrade to allow for real-time queries and analytics especially in light of our focus around online shopping with our FairPrice Online capability and our new Click & Connect offering.
“We decided on SAP as our IT partner as they had proven success documented across global peers in the retail industry. SAP also exhibited expertise and professionalism, particularly the SAP Service & Support organization,who were of a great help during and after our project implementation. SAP also provided from-the-source guidance and implementation support through their SAP Enterprise Support offerings,” noted Yan.
“The key technical challenge is minimizing the downtime of ERP as well as migrating of interfaces. However we worked with SAP services together as ONE-TEAM with clear roles and responsibilities and that helped us to move the work forward without having to “quibble” over little tasks. All with similar objective in making the project a success. The people made the difference,” said Yan.
According to Yan, they were previously using Oracle solutions before migrating out to SAP.
“We efficiently and cost-effectively moved from an Oracle financial system to a solution from SAP and migrated the SAP Business Warehouse (SAP BW) application to the SAP HANA platform. NTUC also decided to leverage the SAP Enterprise Support value maps for SAP HANA and data volume management for a systematic, cost-efficient migration, while knowledge transfer was also achieved with the SAP Enterprise Support Academy program using expert-guided implementation sessions.”
Other SAP products the company deployed include SAP FICO, SAP Process Orchestration, SAP Enterprise Portal, SAP Enterprise Support Value Maps for SAP HANA, SAP Enterprise Support Academy Program, and SAP Solution Manager.
Positive impact of SAP deployment
After the SAP implementation, there was a key positive impact to the business through a decrease in the average runtime of the daily sales reports, from 30 minutes to less than 10 seconds, greatly optimising sales process as well, which laid the foundation for further success.
Other benefits include real-time insights into merchandizing, accelerated run times for daily sales reports by more than 99%, enhanced store operations, and modernized finance processes.
Yan notes that real-time finance processes, based on SAP HANA, allows for continuation of processes, where activities are happening simultaneously, driven only by events rather than being driven by an orchestrated sequence of process steps.
“SAP HANA has established a foundation for us to move on. It unlocks the innovation for Fairprice and allows us to move towards targeted marketing for individual customers in real-time,” said Yan.
NTUC is looking at three main phases in the coming years.
In the first phase, NTUC will be looking to build a Unified Data Platform (through the SAP Customer Activity Repository and Sales Insights) foundation which will be powered by SAP HANA. This is expected to reap increased operations agility, leading to better staff productivity and improved customer engagement and analytics, as well as Basket Analysis.
In the second phase, NTUC is expecting to extend PMR on CAR and FNR; this will help to strengthen promotion effectiveness by leveraging on the master data, sales analysis and predictive algorithms which will positively impact accuracy and reactivity of fresh items forecasts.
In the third and final phase, NTUC will embark on leveraging customer analytics, and innovation is expected by harnessing Big Data so as to empower the Fairprice Personalized Shopping mobile app that harnesses NTUC LinkPoints Database
“In this upcoming era of the digital economy, NTUC expects change and digitisation to be a constant. For instance, we started a few years ago to offer shoppers with electronic shelf tables which we expect to improve. We are also looking to offer interactive screens so as to better promote to customers what’s on offer from NTUC and also to guide them around the stores
“Whether a physical or online store, NTUC believes the customer experience has to be seamless and simple.”