Bringing IT together

EMKE, the regional retail, distribution, import and export conglomerate, Lulu supermarkets and now, upmarket shopping mall developments, is centralising its IT environment to support massive expansion plans. Colin Edwards checks it out.

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By  Administrator Published  October 31, 2006

With a 30%-plus share of the GCC retail sector and plans to double the size of its regional business operations in the next couple of years, Abu Dhabi-based EMKE realised two years ago that its inhouse developed retail business systems would not be able to support its business for much longer.

While honed to support its business processes, the 10-year old custom-designed distributed client server system was not what was needed to take the 40-year old company to its next level of development, admits Madhava Rao, group IT manager, EMKE Group.

"We decided it was high time to change our systems and so started looking around in 2004 for the next step," he says.

The decision taken was to invest upwards of US$5.5 million in new core software and hardware following the global trends of migrating away from a distributed client server environment and implementing a 'big iron' centralised computing strategy. It chose to base it on a Sun Microsystems 64-bit SunSPARC IV system large enough to be able to support projected growth over the next two years, and SAP as its core enterprise solution.

With the growing enterprise becoming increasingly dependent on its IT infrastructure, the company also realised it needed to establish a robust and remote business continuity facility entailing the duplication of its Abu Dhabi-based data centre. In addition, it decided to leverage the latest Symbol-based handheld wireless technologies and the SAP deployment to enable efficiencies at its warehouses and distribution centres as well as in-store.

"Now that our retail interests have taken a major step towards doubling the size of their operations over the next couple of years, we decided it was high time we went with a standard ERP. This was when we started to look at SAP and related solutions," says Rao.

Work on the SAP deployment started in April last year and went live in a 'Big Bang' project in January this year. "We needed a single, enterprise-wide IT platform to manage our increasingly complex operations," he says. “The SAP NetWeaver platform is helping us improve our key processes, enabling us to drive competitiveness at our outlets and, ultimately, deliver better service to our customers."

EMKE considered other solutions on the market, but Rao says that while Oracle was evaluated, it was going through a considerable period of change at the time with various acquisitions and had not then added Retek retail to its portfolio.

"Oracle was in a state of flux with all its acquisitions so there was a big question mark around it. SAP, on the other hand, has been in retail since 1992. The product had matured from version 1 to version 4.7.We felt this to be the best solution available. SAP has about 26 industry solutions, but I think retail is one of the best they have.

"We required a very simple front end like SAP's and an entire applications server database with everything driven from one data centre," he adds.

The new system has not entailed changing the operation's business processes. The only difference since implementing SAP, apart from Rao himself now being able to be found at the centralised location, is that users have to carry out a few more clicks to complete a transaction input. "At the end of the day if you have very mature business processes, such as we had developed over the years, there is little need to change processes. I have not seen much difference from the end users' perspective. Where before something might have been one click there are probably a few more clicks with SAP because it's such broad suite covering so many different aspects of the business," says Rao.

"I used to travel a lot. I was never available in this building (Abu Dhabi data centre).We had so many distributed centres. Now we have gone from localised to centralised computing and that makes a big difference. All my technical core team are sitting here and we watch what's happening across the region from one place.We can see what's wrong and tell people what needs to be done."

Rao used to have a number of small IT teams throughout the region supporting different local operations, Now, everyone is located in Abu Dhabi, with the exception of Dubai, where EMKE has one IT specialist on the ground mainly involved in training on business processes. "The entire core team has shifted to SAP development with business intelligence and business warehousing being the current focus and we expect to go live with that in November," he adds.

Following the business intelligence development, which will see the creation of a 4Tb database, Rao is planning to turn his attention to the development of a remote business continuity centre entailing a hardware investment of over $500,000. The need to do so has been exacerbated by the company's new centralised IT strategy. Whereas in a distributed environment system downtime did not affect the total infrastructure, now it is a different scenario: one down all down.

EMKE's business continuity strategy is being designed to enable the back-end of business to continue in the event of a disaster rather than the customer facing operations. Rao argues there is enough redundancy built into the points of sale (POS) systems to ensure shoppers are not inconvenienced too much in the event of a till going down - they simply move to the next checkout.

The warehouse, its links to suppliers and its worldwide operations were a different matter though as far as Rao was concerned.

"Imagine if my supply chain comes down and I have delivery trucks sitting in different distributions centres and MySAP in the data centre has a problem. My entire supply chain is affected," he says.

"If there's a problem where data doesn't get things processed properly on time then all the trucks are delayed and get backed up.We felt high vulnerability and that back office is far more important than POS.We have built redundancy into the POS because if one checkout fails then the other can serve you, but in terms of the data centre, where you have a single instance affecting our entire geographic base from Aden to our latest store in Abu Dhabi. Everyone is connected to the single data centre from here to there.

So we felt that with this high vulnerability in the data centre we needed to develop a business continuity plan quickly."

One of the primary decisions was the location of the disaster recovery facility. Although EMKE's headquarters located about 500 metres from the current data centre would have been suitable, but Rao did not want the two centres to be dependent on the same exchange.

Alternative sites being considered are Dubai, Oman and Mussafah, the free zone outside Abu Dhabi where EMKE is currently developing a new logistics centre.

The business intelligence and warehouse project currently being rolled out uses SAP NetWeaver to integrate legacy data going back four years with current data now being generated by SAP. Having all the data on the one platform is expected to help the company's buyers, located around the Far East, identify sales patterns so that they can optimise order placing and ensure delivery meets demands.

"For example, our buyers will be able to see the trends of say what happened this time last year and order and ship accordingly, but obviously taking into account variables such as Ramadan, which SAP accommodates automatically.

"All our team will have access to the system here and be able to mine the information to see what they need to be focusing on - what products they should be buying. They can see the stocking situation of different products in the distribution centres. See whether they are moving or not and, knowing that it will take five to six weeks to ship to replace, order accordingly."

They also have insight into the company's long-term promotional plans, to see what they need to consider and what they need to do.

Next on its development list, probably early next year, is the development of an enterprise portal using the NetWeaver integration SOA platform.With data volumes growing at between 40 to 45Gb a month, managers will have plenty of information to mine.

However, such growth could create database problems or at least risks, which is why Rao is contemplating a 'divide and rule' database strategy whereby a second implementation of SAP could be deployed at EMKE's Saudi site.

"If our database is going to get bigger, then maybe we will go for a separate database such as when we open our Saudi operations in 2007. We're still evaluating this," he says.

“I used to travel a lot. I was never available in this building.We had so many distributed centres. Now we have gone from localised to centralised computing and that makes a big difference.”
“Imagine if my supply chain comes down and I have delivery trucks sitting in different distributions centres and MySAP in the data centre has a problem. My entire supply chain is affected.”

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