Major clothing brand transforms core SAP apps, launching new era for fashion industry

A leading global fashion company is pursuing a bold growth strategy, aiming to increase brand relevance, boost revenues and expand market share. As part of this strategy, the company aspires to lead in digital, and it is with this in mind that it embarked on a mission to upgrade its core SAP ECC applications to SAP S/4HANA. Its goal was to create a future-proof technology backbone that will digitise even more business processes, enable greater use of AI, and help take its online business to the next level.

Pursuing a multi-vendor approach, the company engaged PwC and other providers for support in an ambitious project to transform its mission-critical SAP applications across sales, finance, logistics, supply chain and more. It was the most complex IT project in the company’s history, including more than 200 stores (which together hold a million inventory items), over 300 wholesale partners, several online marketplaces, plus three warehouses (which house a total of 2.8 million pieces of inventory).

PwC is responsible for supporting transformation across the sales and logistics operations and managing the programme to keep it on track. We also designed a new global SAP S/4HANA template that initially supports retail, wholesale and e-commerce operations spanning 11 countries that together represent almost €1 billion in revenue. This template will gradually be rolled out across the entire global enterprise.

To complement our strong local team from PwC Germany, we brought in ERP and operations transformation professionals from PwC Poland and PwC Middle East to provide near-shore and offshore support.

Forging closer connections across the business

The retail, wholesale and e-commerce teams now operate as a single, vertically integrated fashion business, all using the same SAP applications and the same business processes. This required significant change management, since it altered the processes and systems used by more than 1,000 employees, bringing in a fresh user interface. Most employees currently use the SAP GUI interface, but the company is gradually rolling out more innovative SAP Fiori apps that will enable staff to complete tasks using mobile devices.

Integrating with other systems and retail partners

To support operations across the diverse sales channels, we helped the client integrate the new SAP applications with its Salesforce online stores, Microsoft cloud customer relationship management (CRM) system and Oracle cash desk, plus the providers supporting the payment service, gift cards and digital stores.

In addition, the company was determined to ensure that the switch to SAP S/4HANA would not disrupt its partners – particularly those in retail and wholesale. So, we ran various testing scenarios with several large retailers. We also built comprehensive, dedicated integration tools to ensure that the new apps would work together seamlessly and verified them using automated test cases.

Brownfield vs greenfield

One of the greatest decisions to make when embarking on an SAP S/4HANA project is whether to take the more straightforward “brownfield” route of upgrading the old SAP ECC applications, or to go for a “greenfield” implementation deploying SAP S/4HANA from scratch. The key difference is that a brownfield implementation keeps the existing business processes and custom functionality, whereas a greenfield deployment modernises them.

The client opted for a “selective greenfield” implementation, sticking to standard SAP S/4HANA functionality as far as possible, because this will enable the company to take advantage of new features as SAP releases them. However, we also helped the client decide where it made sense to cherry-pick and retain the best custom functionality developed over 19 years of using the previous SAP ECC applications and integrate these established processes with the new.

Working closely with the client, we streamlined more than 700 business processes, including consolidating the systems and processes that support the retail and wholesale businesses. One of the biggest improvements is the introduction of AI-based demand-driven replenishment, which uses sophisticated algorithms to calculate the stock needed to replenish each store. This means that when consumers visit stores, they are more likely to find items they want in the right size.

Stock information is now much more accurate, too. Every garment has a Radio Frequency Identification (RFID) tag, which enables automatic stock-taking at stores. This saves many hours of staff time and gives the company better control and insight into its inventory. Furthermore, the client hopes to further improve delivery processes to drive even better customer service.

Looking to the future, the company is rolling out SAP S/4HANA across its global enterprise, starting with the downstream sales operations, then later bringing in the upstream supply operations. We are supporting by continuously enhancing the template to take advantage of emerging technologies and to meet localisation requirements as more countries are brought onto SAP S/4HANA. We are excited to be part of the client’s success for years to come.