Case Study
SAP® ERP Solution
PC MALL（宏 三 ）
PC MALL is a retail company in China which mainly sells personal computers and electronics.
With 200 stores now operating in the north, northeast and southeast regions of China and an
online store, the company’s leaders decided it was time to introduce SAP® ERP to centralize the
management of all sales outlets ahead of further business expansion. ABeam was selected as the
company’s real partner for its management resources and ability to realize speedy SAP ERP
implementation.
Challenges
・PC MALL managed each of its 200 stores in China and online store separately
and had difficulty managing them real-time and in an integrated manner.
・There was a complicated management structure within the company which contained
a lot of regional variations
Solutions
・SAP® for Retail Solution to manage finance, purchasing, promotion and pricing
・SAP® POS Data Management for the real-time management of all sales outlets
・SAP NetWeaver® Process Integration (SAP NetWeaver PI) to integrate SAP and POS systems
・SAP® Best Practices for Business Warehousing (SAP Best Practices for BW)
Success Factors
・Top-down implementation – the role of the CEO and the Chairman
・The leadership of the dedicated steering committee and the company-wide commitment
to the project
・The reform of PC MALL’s business mindset through the implementation of SAP® ERP,
and ABeam’s role in bridging the conceptual gap among employees
・ABeam’s ability to gather global expertise to accomplish the project
Case Study
PC MALL（宏 三 ）
SAP® ERP Solution
Domestic SAP® ERP implementation in China
for the real-time management of all sales outlets,
utilizing ABeam’s global retail expertise
Integrating 74 legal entities
China may be growing, but it is still a difficult market to
succeed in for even domestic companies. PC MALL, a communication, computer and consumer electronics (3C) retailer,
has endeavored in such an environment to become one of the
country’s fastest growing companies. But although sales have
been strong until now, top management realized that in order
to expand even faster they would need to implement a new
ERP system using global standards.
The company used a proprietary ERP system for nearly a
decade, and was prompted to introduce SAP® ERP only after
seeing the success its main competitor (general appliance retailer) in China had after it introduced an SAP ERP system.
The system seemed to help it become much more responsive
to market trends.
PC MALL has always held one of the largest Japanese electronics retailers as a model for its expansion. This was another reason
they chose to implement an SAP-based system, and why they
chose ABeam to be their partner – it was ABeam that helped the
said Japanese retailer introduce its own SAP ERP system.
It was a purely domestic SAP ERP implementation, but given China’s range of unique legal requirements, this was not a
simple task.
PC MALL has 200 stores in different regions of China and
as many as 74 legal entities control these stores. This is due to
a law requiring that a legal entity be established for each regional branch of a company. Each of these 74 legal entities
had its own capital and issued its own financial status reports,
something which has proven to be a major burden. As different standards and systems were employed in each of the nine
regions of operation, the company’s management structure
was extremely complicated and needed to be simplified.
The sheer scale of the task meant that it required a consulting company capable of supporting global standardization.
Streamlining management
First of all, PC MALL needed a single SAP platform to integrate all of 200 stores as well as its online store.
There were two major goals. One was to enable the centralized, real-time management of all sales outlets. Another was to
standardize business procedures across the company in order
to improve internal management.
The main solution for the first goal was SAP ERP Central
Component (SAP ECC), SAP POS Data Management and
SAP NetWeaver PI. All 200 stores were interlinked and connected to the head office to optimize inventory and purchasing management. The top management of the company monitored the status of each store on a daily basis, helping PC
MALL to respond more swiftly to market trends.
This system was combined with SAP for Retail Solution to
manage finance, purchasing, promotion and pricing, and SAP
Best Practices for BW to streamline internal business procedures
and decision making. Internal productivity increased as a result.
“What was especially challenging was standardizing category
management. Up until then different rules were used by different departments,” recalls William Li, Senior Manager of
ABeam Consulting (Shanghai) who acted as project manager.
Project Plan
Preparation
Mar 22
BBP
Apr 5
Apr 30
Pre-live
preparation
Realization
May 31
Jun 30
Jul 31
Pilot
Aug 31
Sep 30
Roll out
Oct 31
Nov 30
Kick off
DEV setup
Training
Configuration & Add on development
AS-IS analysis
Unit testing
To-Be analysis
POS development
Integration testing
Gap analysis
NetWeaver development
PRD installation
Training
BBP
Stress testing
Data preparation
8
Data migration
Pilot (Nov 1)
Roll out
Go live (Dec 1)
Case Study
Mr. Bing Wei
Vice President,
PC MALL
Senior General
Manager of Information
Management Division,
PC MALL
Top-down implementation
The project started in March 2010, and the system went live on
December 1, 2010. Swift implementation was made possible
thanks to the commitment of the top management of PC MALL.
The CEO fully supported the project, making sure that the
entire company was involved by assigning senior managers in
charge of operations, accounting, and other sections to the
project. The CEO also attended some of the steering committee meetings, which were held every two to four weeks, especially during the project’s early stages.
Enthusiastic support was also obtained from the Chairman,
who issued a message to employees at the start of the project
saying: “Be open-minded to change.”
Gathering ABeam’s global resources
Another success factor was communication. Having a common goal is always essential for this kind of project. Fortunately, there was consensus among the system engineers of PC
MALL about the project. Everyone acknowledged the need
for a new system and had basic knowledge about SAP ERP.
What they lacked was a vision of the whole picture regarding
what they could do with SAP ERP to change their business
procedures. This is what ABeam shed light on as it worked to
bridge the conceptual gap among employees.
“At the beginning, most people in the workplace saw the
project as simply another IT implementation, and did not realize that it would affect the entirety of business operations,”
reflects Junhai Zhong, Director of ABeam Consulting (Shang-
System Architecture
NetWeaver
Headquarters
Member Management
SAP® Retail System
【MM】
・Maintenance of commodity master data
・Replenishment orders
・Order balance management
・Supplier management / evaluation
【SD】
【Promotional
Enhancement】
・Promotion rules
・Price limit management
・Combined sales
【FI/CO】
・Financial accounting (entry processing, general ledger, payables /
receivables)
・Fixed assets management
・Management accounting
SAP NetWeaver® Process Integration
SAP® Best Practices for Business Warehousing
(Database)
・Sales analysis
・Customer analysis
・Stock analysis
・Financial planning
SAP NetWeaver® Process Integration
・Price modification management /
marketing management
・Customer management
・Sales order management
Member master data,
Quantities of bonus points
and discount coupons
・Management of
member master data
・Bonus points
management
・Discount coupon
management
・Management of
secondary shopping
vouchers
Stores
Product master data,
Price adjustment,
Inventory
Store POS System
・Sales
・Cashier
・Delivery
・Services
Sales, Cashier
Online Sales
EC (Website)
Sales
Online order acceptance
Front Office
System
SAP® ERP Solution
However, SAP ERP implementation was carried out with
excellent strategy and planning. As PC MALL already had a
solid IT system as a base, it did not need to change its core
system. This meant that most of the implementation could be
done without affecting daily business operations.
Also, thanks to intensive training prior to and during implementation, the people in PC MALL got used to the new system within a few weeks.
Among the aforementioned solutions, there are not many
successful SAP POS Data Management installation examples
in the world, and so it is significant that ABeam was able to
utilize this system for PC MALL.
Moving forward, PC MALL is eager to use the SAP platform to upgrade management even further with such tools as
SAP BusinessObjects Planning and Consolidation, SAP Merchandise & Assortment Planning, and SAP ERP HCM, which
are planned to be introduced during Phase 2. The company
eventually wants to integrate a whole range of operations including its supply chain, customer relations, sales planning,
and category management, as well as to put total budget management in place. In doing so, it hopes to shift away from
running budget data management routines on a yearly, quarterly, and monthly basis toward running them on a daily basis.
Having completed Phase 1, in which the focus was mainly
on internal management, PC MALL expects that the new system will help them improve the quality of service for customers. Currently, PC MALL has one million members (membership card holders), and ensuring the brand loyalty of these
customers is a key concern for the company.
Mr. Liu Ningyuan
Case Study
SAP® ERP Solution
hai) who coordinated the project. “This is what ABeam is
good at – explaining the impact each change will have on the
whole of business procedures, so that everyone is thoroughly
aware of what the objective of the project is.”
ABeam was also quick to respond to the client’s special
needs. For example, PC MALL wanted to have a centralized
system for purchasing and wanted to have it integrated with
localized systems used for certain kinds of products. The system had to accommodate the two different schemes.
There was one more thing which PC MALL sought from
ABeam: management expertise. They wanted above all to learn
from ABeam’s experience working with Japanese companies as
well as some of the most successful retail companies of China,
namely Nepstar and RedBaby.
“ABeam is not just an SAP ERP implementation company.
From ABeam we wanted to learn the best practices of Japanese
companies,” reflects Mr. Bing Wei, Senior General Manager of
the Information Management Division and the main person
in charge of SAP ERP implementation at PC MALL. “We
wanted ABeam’s management skills.”
In the end, ABeam more than met the client’s expectations.
ABeam Japan gave timely and appropriate advice throughout
the project based on the experience gained through implementation support to one of the largest electronics retailers in Japan. “By sharing our experiences from the past, we helped PC
MALL make decisions and speeded up the implementation
process itself,” comments Li of ABeam.
“The success of this project was a result of our ability to
gather expertise from inside and outside of China to accomplish it, something which PC MALL truly appreciated,” says
Hunglin Tang, Managing Director of ABeam Consulting China and Taiwan, as he reflects back about the project.
True professionalism
PC MALL seeks to increase the number of stores it operates
Core Members of ABeam
Hunglin Tang
Junhai Zhong
William Li
Managing Director,
China and Taiwan,
ABeam Consulting
(Shanghai) Co., Ltd.
Director,
ABeam Consulting
(Shanghai) Co., Ltd.
Senior Manager,
ABeam Consulting
(Shanghai) Co., Ltd.
from 200 to 300 by 2012 in order to multiply its revenue accordingly.
But the company’s ambitions do not end there.
“We want to be seen as professional,” says Mr. Wei. “We
had our own ERP system, but not all orders were managed by
this system, in particular endpoint sales. Some customers try
to negotiate prices, and that process had been largely left to
individual staff members, who recorded figures by hand on
paper. With the new planning system, we wanted to make
pricing more transparent for consumers.”
Professionalism is also emphasized by the top management.
Mr. Liu Ningyuan, Vice President of PC MALL, who supervised the later stages of the project, also said that PC MALL
seeks to become a company that does more than sell products.
“China is a growing market. For the majority of people who
come to the stores and whose incomes are still low, what matters most are the prices. They usually tour several stores to
compare prices. What I want to do eventually is to educate
consumers and help them see that price is not everything. We
want our customers to see the whole picture of PC MALL –
that it offers not only products, but good service.”
For Phases 2 and 3, the company seeks to streamline the collection of consumer information. ABeam will continue to act
as PC MALL’s real partner, helping it to achieve all its goals.
● Voice – Customer Evaluation
“We are satisfied with the outcome of Phase 1. The business process was
improved across the company. Improved data accessibility has streamlined
the way we make decisions.”
Mr. Liu Ningyuan
Vice President, PC MALL
“With ABeam taking care of the ERP system, we can focus on our own
business. We learned a lot from their experience working with Japanese
retailers as well as their excellent management skills.”
Mr. Bing Wei
Senior General Manager of Information Management Division, PC MALL
● Client Data
Company overview
Company name:
PC MALL（宏 三 ）
HQ Location:
Hongtu Mansion, 219 North
Zhongshan Road, Nanjing,
P.R.China 210009
Estd.:
October 2000
Business:
A 3C retailer focusing on
categories such as computers,
office appliances, cameras,
communication equipment, etc.
5 billion RMB (2009)
Total sales:
Employees:
About 20,000
(as of the end of 2010)
Project overview
Summary:
Timeframe:
Member count:
Software:
2011. 5 Copyright©2011 by ABeam Consulting Ltd., All rights reserved.
A domestic business improvement
project within China centering on
the implementation of SAP® ERP
Central Component (SAP ECC)
Phase 1: March 2010 to
December 2010
PC Mall: 35; ABeam: 14
SAP® ECC, SAP NetWeaver® PI,
SAP® POS Data Management,
etc.
ABeam Consulting (Shanghai) Co., Ltd.
Tel : +86.21.3303.9510 Fax : +86.21.6093.3201
ABeam Consulting Ltd. (HQ, Japan) Marketing
Tel : +81-3-3501-8355
www.abeam.com