Luxury goods retailer standardises global business processes to drive growth and achieve operational transparency
Luxury goods retailer standardises global business processes to drive growth and achieve operational transparency
Italian luxury-goods maker Salvatore Ferragamo is in the fortunate position of facing increased demand for its products, particularly in Asia Pacific.
However, existing IT systems – primarily designed for limited local business – are struggling to support this level of regional growth.
In order to meet customer demand and position itself for further expansion, Ferragamo selected business software from SAP to bring cohesion to the company’s information technology landscape. Ferragamo aims to streamline its global business processes over the company’s entire value chain, from back-office functions such as financials to the point of sales in its retail stores. The new system will enable Ferragamo to gain the insight to better understand its customers and business, the operational efficiency to drive profits and the adaptability to capitalize on the best opportunities to grow.
Driven by Asian growth
Founded in Florence in 1927, Ferragamo has extended its retail presence across Europe, North America and Asia with approximately 2,600 employees and more than 550 stores. Recently, the company’s strongest growth has been in emerging markets in Asia, which now represent more than 50 percent of the its annual turnover.
With Ferragamo opened 10 new boutiques in China in 2010, bringing the total number of stores across China to 45. The company was faced with the substantial challenge of creating standardised management processes for these new locations and bringing them in line with global operations. For example, without the proper insight and control, an unforeseen inconsistency in the supply chain could cause retail stores to run out of a popular item.
By harmonising its global business processes on one integrated IT platform from SAP, Salvatore Ferragamo is aiming to obtain a single source of truth, with consistent data across all business operations, from the supplier to the customer in the store. This will help the luxury goods maker to consistently make business decisions based on the latest and most accurate information, helping ensure that the right product is available at the right time and offered via multiple channels, where the need is greatest.
“In the highly competitive marketplace of international luxury goods, we are determined to distinguish ourselves with an unfailing commitment to quality and service,” said Michele Norsa, Salvatore Ferragamo chief executive. “To meet that commitment, we must have complete and dependable insight across all our business processes, from our headquarters in Italy to our boutique shops in China. SAP is a global information technology provider able to meet our needs for seamless functional capabilities, centralised architecture and multinational support. This implementation will provide us with one standardized system that brings cohesion to our global operations, and helps us ensure we continue to meet the high quality of service our customers have come to expect.”
Extensive portfolio agreement
Software from the SAP for Retail solution portfolio will provide centralised control for stock management and distribution – from standalone shops to goods available for purchase online. The SAP NetWeaver Process Integration offering will help the company connect its legacy systems with the new SAP solutions, allowing for a reliable exchange of processes and information across distributed business applications and geographies.
The SAP NetWeaver Business Warehouse component will create a consistent database of information, offering Ferragamo transparency to enable better business decisions. And these implementations will serve as the foundation of an enterprise-wide coherent business strategy for Ferragamo, providing the company with a governance model that can be used to rapidly and seamlessly enter new geographic markets as needed.
The first go-live of the new SAP system successfully took place on schedule in January 2011 at Ferragamo corporate offices in Hong Kong, and will be followed by retail stores in Hong Kong and Macau by the end of June 2011. Operations in Taiwan and in China are scheduled to go live by the end of the year.
