SAP Sapphire: Innovation, and 3 case studies to ponder

At SAP Sapphire Now, Burberry CEO Angela Ahrendts, Ace Hardware CEO Ray Griffith and Coinstar CFO Scott Di Valerio discuss how they tackled problems with a platform.
Written by Andrew Nusca, Contributor


ORLANDO, Fla. -- To close the evening keynote presentation of day one of SAP's Sapphire Now conference, co-CEO Bill McDermott welcomed three executives -- Burberry CEO Angela AhrendtsAce Hardware CEO Ray Griffith and Coinstar CFOScott Di Valerio -- to the stage to talk about what's going on in their respective corporate trenches.

(Missed the beginning of this presentation? You can read what happened right here.)

Each had their own take on their application of technology to become more nimble or innovative companies. What follows is a summary of each executive's words.

Burberry's Ahrendts:

The fashion house started using SAP about 6 years ago globally. It decided early on to set itself up as one global enterprise, eventually in 80 countries. "What we didn't want was a different platform in every country," Ahrendts said.

It just finished implementing China -- it took six months and a thousand people. About 90 percent of the enterprise resides on a single platform. "It is the backbone, the infrastructure of the business." Had it not been in place, Burberry couldn't execute on its digital innovations -- streaming runway shows, click-to-buy capability, click-to-chat capability in eight languages.

"Our customer is going to have the ultimate in service," she said. Maybe you're a customer who bought three suits. Do you need a trench coat? Shirts? Ties? Stores will leverage purchase history to serve customers better.

Burberry used to be "a federation of businesses, very disconnected," she said. From design to distribution, planning to procurement to pricing -- all elements are now touched by SAP's platform. Ahrendts said she likes that they're on a single platform because it's easy to roll out new modules, such as the one for human resources. "Every year you keep layering on," she said. "If you're a global business, the world is very complex...keep it simple."

"How do you change your company to move as fast as society?" she asked the audience. "It's not just your customers; it's your workforce." Seventy percent of Burberry's workforce is under the age of 30, she said. The company sees itself as "an innovation company," to be used as a sort of R&D.

"Society expects businesses to run differently," she said.

Ace Hardware's Griffith:

Ace turned on its SAP platform in 2011. The company positions itself as "the helpful place for most people," but it seeks to interface with the younger generation and also help retailers connect more readily with consumers in their community.

Technology was the answer -- but it wasn't just for consumer and inventory data mining. Distribution for the 83-year-old company -- its "backbone," Griffith said -- was vital. Ace has been able to maintain a 97 percent service level for its distribution centers, meaning for every 100 products, it had 97 in the warehouse. But the company didn't know how well its supply chain was delivering products to them -- were they coming in late? Were its suppliers maintaining a lower service level?

By deploying technology, "We're going to take $80 million out of a $420 million inventory" and reinvest those funds in consumer relationship, Griffith said. Now the company has transparency into its inventory, both from a corporate point-of-view and also from the perspective of individual retailers.

"How do you stay relevant to your end consumer?" Griffith asked. "How do you advance the ball up the field?"

Coinstar's Di Valerio, on its Redbox subsidiary:

Di Valerio said Redbox sees SAP as a tool to line up new businesses over next four to five years. By putting in CRM software, and using HANA to query data from the 38 million customer e-mail addresses it has, Coinstar and Redbox can better understand renting preference patterns, which improves suggested movies and informs how it stocks its kiosks.

"We have to understand not only where our customers go and rent discs but also [to] which kiosks they return them," he said.

The company had several legacy systems wired together that worked fine, but Redbox's tremendous growth required the quick scale-out capability of a uniform system. Coinstar has been an SAP shop for 10 years.

Now it's looking at even more growth. One example? A coffee kiosk that brews the real deal. Another: a gift card return machine that gives you money for those holiday cards you crack once and never look at again. Electronics also came up. And, of course, its EcoATM, which exchanges cash for old mobile phones, which it then resells in the developing world.

"It's about getting to know your consumer," Di Valerio said. "It's not so you blast them with e-mails and advertisements, it's about establishing a relationship with that consumer so they feel like they're special and they advocate for the company because the company is bringing them something they like."

Editor's note: The original version of this post incorrectly referred to Di Valerio as CEO, not CFO. We regret the error.

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