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Revised approach aims to minimize disruption and improve efficiency after a botched SAP implementation affected operations.
Spar Group has released a new plan to change their SAP rollout strategy. Financial-related systems will be migrated separately from the distribution centres’ operations due to a Rs168.7 million lawsuit filed against them earlier this year by the Giannacopoulos (major franchisee) regarding issues associated with the original implementation of the system that they claim was poorly executed.
In their latest trading update, Spar stated, “the new approach to the SAP rollout will focus on capability enablement rather than integrating the systems at one time for warehouse, finance and purchasing”. The purpose of this new strategy is to reduce the risk of execution and disruption to operations that occurred during Jan-Feb 2023 (first rollout of the SAP S/4 HANA system) at the KZN Distribution Centre.
Within this financial year, Spar also anticipates that they will have transitioned their finance function into a cohesive SAP environment, including a common chart of accounts, which will result in establishing "one version of financial data." Ultimately, this transition is expected to enable increased efficiencies and improved governance. After transitioning their finance function, Spar will then work on improving drop shipment cost reporting, credit risk management, and pricing governance.
According to a lawsuit brought against SAP SE by the Giannacopoulos family of retailing in the Durban High Court, supply chain disruptions caused by poor implementation of an SAP-based solution resulted in empty store shelves and a large loss of revenue from customers over 46 Spar, SuperSpar and Tops stores throughout South Africa. The Giannacopoulos family is seeking compensation of Rs142.9 million in lost gross profit from financial years 2023-25, and Rs25.8 million for the failure to honor volume-based rebates caused by supply disruptions.
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