Retail Finance Transformation to Drive Innovation

Retail Finance Transformation to Drive Innovation

Walgreens Boots Alliance, Inc.

By Susan Fisher, Story Acquisitions Lead, SAPinsider

Shifts in what and where consumers purchase are creating disruption and innovation across product development, sales channels, and supply chains. Having products consumers want, readily available and at a profitable price point has never been more challenging.

Walgreens Boots Alliance’s (WBA) ability to continue to deliver exceptional customer experiences in over 9,100 Walgreen’s stores in the US and through expanded omnichannel capabilities requires efficient processes and real-time visibility into operations. A transformation initiative is underway to modernize the company’s core business processes so access to better data in real-time empowers all levels of the organization to manage greater complexity.

SAP S/4HANA is WBA’s modern ERP digital foundation, replacing a highly customized legacy core. The phased implementation is initially focused on finance, retail, supply chain, and inventory management.

“With over 9,000 stores, we’ll have the world’s largest retail implementations of SAP S/4HANA of this scope globally,” Mark Slater, VP, Platform Information Officer, Business Services, WBA, says. SAP S/4HANA has been rolled out to all 9,000+ stores and with noticeable improvements as a result of capabilities enabled by SAP. Hosted on Microsoft Azure, which provides the infrastructure to scale with tremendous volume, SAP S/4HANA has streamlined processes, analytics, and decision-making, and is providing greater accuracy and confidence in the data due to more rigorous controls, governance, and training.

Mark Slater, VP, Platform Information Officer, Business Services, Walgreens Boots Alliance

 

The integration of SAP Customer Activity Repository’s retail applications module with SAP S/4HANA underpins innovation. The module feeds all point-of-sale (POS) transactions into SAP S/4HANA, acting as an automation engine and provides real-time visibility into inventory, reports, and dashboards. Additionally, core SAP S/4HANA reports provide analytics as well as extracts to other data lakes, allowing WBA to integrate with multiple data sources. According to Slater, leveraging other SaaS tools to achieve advanced predictive planning is on the horizon.

Transformation Shapes a Modern Customer and Employee Experience

Process automation and improved visibility into better data are shaping a modern experience for WBA customers and employees.

In retail stores, automation of inventory management and document processing is enabling WBA’s store employees to spend less time on manual tasks and more time engaging with customers and other higher-level tasks. Automation is helping with decisions around more effective labour deployment too.

Microsoft Azure delivers improved performance and data centralization, according to Slater, that helps provide better customer service. Azure also provides flexibility in scaling when WBA starts to see consumer trends, positioning the company for the future.

Procurement is experiencing greater agility from better insights to what and how consumers are purchasing which helps WBA keep pace and meet growing complexity in its customers’ needs like real time visibility into the demand for PPE, masks, and sanitizer during the peak of the pandemic. Further benefits include increased sales velocity, better return on inventory, and margin protection, as well as improved forecasting and inventory management.

Automating manual invoicing was a top priority since the 9,100-store retail chain generates between two and six million invoices monthly. This was all done manually prior to the roll-out. OpenText Vendor Invoice Management (VIM) for SAP Solutions, SAP Ariba, and electronic data interchange technology support this automation. VIM and the invoice matching capabilities of SAP Ariba have reduced errors and issues and help protect margins from a COGS standpoint.

Finance colleagues are in a much better position by month end as the close process becomes more automated with less reconciliation and data clean-up during the close, enabling them to focus on analytics and decision making. Through the in-flight implementation of BlackLine, labour-intensive processes like manual journal entries will be automated, and month end time to close will continue to improve as SAP S/4HANA has now been rolled out to all stores.

BlackLine has helped with account reconciliation, WBA’s close, and getting the balance sheet wrapped. Rolling out additional SAP S/4HANA Finance capabilities will continue to advance process automation moving WBA closer to a “lights out finance” approach enabled through SAP solutions.

Revenue leakage, margin improvement, COGS improvement, Sales General & Administrative (SG&A) expense reduction, working capital improvement, and controls/compliance improvement are key levers to drive business value at WBA, and a way to benchmark for ongoing measurement as the company continues to invest in its SAP S/4HANA ecosystem.

Ecosystem partners include GenPact and Tata Consultancy Services (TCS). GenPact is WBA’s Finance Shared Services partner and is relied on for expertise in process transformation, automation, and thought leadership

TCS is WBA’s application and technology management partner, instrumental in ongoing run operations and process improvement, including input into the SAP S/4HANA roadmap.

Accenture provided advisory, planning, and delivery support to WBA’s recent SAP S/4HANA implementation.

What Does This Mean for SAPinsiders

  • Set realistic expectations among the business user community because there is a lot of complexity. Consider if other products are compatible, the time commitment required, and what value users will receive.
  • Appreciate the need for continuous training. Slater is bullish on continuous training to support employees to best use the system which helps the organization realize its full potential. “SAP is more rigid with business rules, validation, and substantiation which provide a lot more confidence in the data. Continuous training supports the best chance of having good data.”
  • Build on the foundation and investment made in SAP S/4HANA and ask “where can we drive more value”?

Watch a short video and learn how modernizing the company’s core business processes is empowering all levels of the organization to manage greater complexity.

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