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7-Eleven Stores Pty Ltd SAP Forum Retail & CPG Dennis Lewis April 2009 CIO
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Page 1: 7 Eleven Overview

7-Eleven Stores Pty Ltd

SAP Forum Retail & CPG

Dennis Lewis April 2009CIO

Page 2: 7 Eleven Overview

7-Eleven Stores Pty Ltd

• Privately owned Australian company• 7-Eleven brand under license from 7-Eleven

International• Revenues in excess of AUS$1.3b• Approximately 380 stores on the Australian

eastern seaboard• Approximately half of the stores sell fuel• Compliant franchise model• In operation in Australia for 31 years• Approx 225 corporate employees• Approx 3,500 franchise store staff

Page 3: 7 Eleven Overview

7-Eleven IT Landscape

ERPIntegration

Business Intelligence

PortalPoint of Sale

eService IntegrationPayroll

Store network

SAP ECC6SAP PISAP BI7SAP POSDMSAP BIASAP Portal 7Radiant SystemsTouch SystemsMicropayBroadband - ADSL

Page 4: 7 Eleven Overview

Technical System Landscape

Converter

SAP NetWeaver PI 7.0

PIPE

SAP NetWeaver BI 7.0 SAP ERP Central Component 6.0

POS System (Radiant)

File Adapter

Master Data

Transaction Data

POS Data

IX Retail Content

POS DM

SAP NetWeaver Portal 7.0 SAP NetWeaver Portal 7.0BI Reporting

BIA

Flat Files

Page 5: 7 Eleven Overview

7-Eleven’s Current IT Status and Strategy• 7-Eleven selected SAP as its core system in 1998 and went live with release 4.0 in 1999.

The system was upgraded in 2003 and extended during 2004 to support the changes in thesupply chain processes when 7-Eleven changed from mainly Direct-Store-Deliveries (DSD) tocross-docking using Metcash as the main distributor. A store portal was rolled out inparallel to provide stores with ordering and inventory management functionality. RetailInterchange, the original middleware solution, was replaced with SAP PI in 2007. In 2008SAP was upgraded to Ecc6 and BI was implemented.

• Radiant is 7-Eleven’s POS system for all stores, it was implemented and rolled out duringthe 2d and 3rth quarter of 2004

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

SAP4.0

• SAP is the core system for 7-Eleven, and leveraging the investments made so far is one ofthe guiding principles for 7-Eleven’s IT. Other solutions are considered where SAP does notprovide sufficient functionality or where it cannot be used in a cost-effective way. 7-Elevenhas also chosen a ‘vanilla’ approach for any system implementation, i.e. implementingstandard functionality wherever possible and minimising systems modifications.

• Another guiding principle is to stay on supported versions of the software products.

Technical Upgradeto SAP 4.6 C

Radiant Roll-out

Store Portal

Supply ChainEnhancements

PI

2008 2009

ECC6 BI

Page 6: 7 Eleven Overview

Idea Development Solution Definition

Define ProjectDefine Project

ProjectCharterProjectCharter

UnderstandCorporate

Strategies andTargets

UnderstandCorporate

Strategies andTargets

Define KeyRequirementsand Drivers

Define KeyRequirementsand Drivers

AssessBusinessImpact

AssessBusinessImpact

Define ProcessRequirements

Define ProcessRequirements

DetermineBenefit AreasDetermine

Benefit Areas

Define ITRequirements

Define ITRequirements

Evaluate SAPEvaluate SAP

DevelopBusiness Case

DevelopBusiness Case

Develop ITRoadmap

Develop ITRoadmap

Outline KeyRequirementsOutline Key

RequirementsBusiness

CaseBusiness

CaseIT RoadmapIT Roadmap

Key Deliverables

IT Roadmap: ApproachProjectPlanning

DetermineRequirements

Analyse Impactand AgreePriority

DevelopRoadmap

DevelopBusiness Case

UpdatedKey

Requirements

UpdatedKey

Requirements

Page 7: 7 Eleven Overview

Prioritisation

During the Steering Committee meeting on the 14th of August 2007, the findings were presentedand discusses for prioritisation.

The following requirements were rated High:

HighG023 Collaborative, Flexible Forecasting

HighG028 Improve Franchisee Communication

HighG003 End-to-End Promotions Management

HighG005 Integrated Space Management

HighG002 Effective Price Management

HighG001 End-to-End Category Management

HighG013 Efficient, Integrated Enterprise-wide Reporting

PriorityGrouped Requirement

Page 8: 7 Eleven Overview

Roadmap: Summary

2007/2008 2008/2009 2009/2010

Phase 1: Upgrade to SAP ECC 6

Phase 2: Implementation of BIand POS DM

Phase 3: Portal Upgrade andRoll-out

Phase 4: Extendedfunctionality

The decision to upgrade first and then to implement BI and POS DM was driven by the arguments listed abovebut also by 7-Eleven’s desire to guarantee IT readiness for the significant growth strategy it has chosen. Thisequally determines the scope for the functional upgrade to ECC6. In order to reduce the risk of the upgradeand to meet the requirement G013 to provide ‘Efficient, Integrated Enterprise-wide Reporting’ as quickly aspossible only requirements with a high cost/benefit analyses and relatively low risk profile have beenincluded into the scope.

A fourth phase has been designed in order to address the requirements with a higher risk profile such as theswitch to the new GL functionality.

It is also important to note that the phases of the IT roadmap have significant process and changeimplications. The benefits can only be achieved if the identified process changes will be implementedtogether with the IT changes. Each of the requirements have been analysed with regards to their process andIT implications, for further detail please refer to Appendix 1.

Page 9: 7 Eleven Overview

BI System Business CasePrioritised benefits were classified into three

categories:• Hard, annualised cost savings which are

quantifiable and directly attributable toprocess/systems changes; typically includingreduced staff costs and improvements in the useof working capital.

• Benefits that are quantifiable, but are moresubjective in their association withprocess/systems changes, typically includingrevenue and margin improvements.

• Benefits that are hard to quantify, butrecognised as valuable or strategic to theorganisation or are seen as a risk mitigationbenefit.

Page 10: 7 Eleven Overview

Reduced out of stocks due to capacity planning

Reduced data management cost, reduced marketing dept costdue to effective price management

Reduced supply chain cost due to improved order management

Cost reduction due to reduced shrinkage/improved lossprevention

Cost reduction due to efficient, integrated enterprise-widereporting

Type A: Cost savings OPEX

Increase sales and profit through more better and customerfocussed layouts and better execution

More effective basket building promotions, increased customertransactions, increase revenue from suppliers through end toend promotions management

Increase sales and profit through effective price management

Increase sales and profit through enhanced categorymanagement and better reporting

Type B: Revenue increases

Benefitfirst

realised

PhaseProposedbenefit

SAP fitOriginalestimate

(workshops)

Income/savings

Page 11: 7 Eleven Overview

Deliverables• Article Sales Analysis• Sales Basket Analysis• Sales Price Analysis• Promotional Analysis• Store and Category

Analysis• Article Sales, Purchase

and Stock Analysis• Vendor Scorecard• Orders and Purchases

Analysis• Stock Availability

Analysis• Forecast Analysis

• Supply Chain Scorecard• POS Statistics• Store Matrix• Audit Variation Analysis• "Store Surveys"• Article Movements

Analysis• General Ledger Analysis• Accounts Payable

Analysis• Cash Flow Analysis• Balanced Scorecard

Page 12: 7 Eleven Overview

Project Stakeholders

© SAP 2007 / Page 1

7-Eleven BI Project Organisation

Project ManagementTam Mc Quinlan

Charmaine Steward (SAP)

Project SponsorDavid Ginsberg (COO)

Steering Committee- David Ginsberg (COO)- Dennis Lewis (CIO)- Andrew Manning (CFO)- Julie Laycock (Marketing)- Jim den Ouden (S-Chain)- Tam Mc Quinlan (PM)- Brian Molloy (PM, SAP)- Mona Da Gama (SAP)- Mark Giles (SAP)- Michaela Wagner (PWC)

Training & ChangeManagement

- Cathy Brancatisano- Kasey Edwards (SAP)- 7-Eleven Trainer (TBD)- Training Analyst (SAP)

BI Functional- Evan Michailidis (BA Team Lead)- Cathy Brancatisano (BA)- Adam Mills (SAP Solution Specialist)- Ramon Wong (BI Solution Specialist)- Bella De Freitas (BI Team Lead, SAP)- Elangovan Subbiah (BI, SAP)- Thomas Schleiter (PosDM, SAP)- Rahul Pradhan – (PosDM, SAP)- Bjorn Goller – (Solution Architect, SAP)

BI Technical/Development- Chitra Ashok (ABAP, XI Lead)- Archana Baxi (ABAP, XI)- Nilusha Perera (ABAP, XI)- Alex Tambellini (Basis/Author Lead)- Wi Tanto (Basis/Authorisations)- Joe Zooeff (Infrastructure)- Rahul Pradhan (PIPE, SAP)- Thomas Schleiter (PIPE/Basis, SAP)

Business Stakeholders- Bernie Hallam- Tracy Hammon- Michael Cullen- Johni Hii- Andrew Banard- Jacqui Cain- Sue Owen- Natalie Dalbo- John Pettit- Linda Chia- Gary Tocknell- Greg Neave- Chris Centra

Page 13: 7 Eleven Overview

BI System OverviewThe current 7-Eleven BI system landscapeconsists of:

20 MultiProviders19 InfoCubes8 Data Store Objects26 Queries106 Users

Number of transaction records: 528.2 million

Number of Database tables: 21211

Total size of Database: 730.31 GB

Page 14: 7 Eleven Overview

Data Retention StrategyTransaction data for the following cubes are retained for 15months:

Article MovementsCustomer (Billing)Merchandise Procurement

Data older than 15 months is moved to a correspondingMonth level detail cube for each of the cubes above

The Month level cubes will hold data between 15 – 36months old

Data older than 36 months is deleted from the systempermanently

This strategy allows for better management of data volumesand yet provide an avenue for historical data up to 3 yearsprior to be available for analysis at Month level detail

Page 15: 7 Eleven Overview

POS Data Volume ManagementCurrently, the average number of POS transaction data loadedinto BI is approximately 32 - 33 million records per month (~ 1.1million per day)

To manage this kind of data volume and maintain an optimumlevel of performance for reporting (i.e. to avoid reading fromhuge database tables), the POS Receipts data is logicallypartitioned into Quarterly POS Receipts cubes (i.e. POS ReceiptsQ4 2008, POS Receipts Q1 2009)

Each POS Receipts Quarter cube holds close to 100 million records

A POS Receipts Last 3 Months cube has been implemented toalways store the most current 3 months worth of data. This cubeis the most commonly used POS cube for performing Sales Basketanalysis and is accelerated with the BIA.

Page 16: 7 Eleven Overview

The following are the runtimes for the data loads that have beenscheduled to run daily to extract data from ECC6 to BI:

Master Data: ~ 1 hour

Transaction Data:

Total Daily load time: ~ 3 hours 25 minutes

Data Loading Timings

~ 14 minutesPrior to loading the POS data to cubes, data isactually extracted from POS DM 7 timesthroughout the day to the Persistent Storage Areain BI. Each extraction takes ~ 2 minutes

~ 18 minutesMerchandise Procurement

~ 6 minutesProfit Center Accounting

~ 1 hour 30 minutesPOS (including POS Receipts Last 3 Month cube,POS Receipts Quarter cubes, POS ReceiptsCancellation cubes)

~ 12 minutesArticle Movements and Stock

~ 5 minutesCustomer (Billing)

~ 2 hours 25 minutesTotal

RuntimeArea

Page 17: 7 Eleven Overview

BI Accelerator PerformanceBI Accelerator indexes are created on 12 InfoCubes containing a total of352.8 million records – the indexes take up 10.66 GB in memory and 13.75GB on diskThe runtimes for retrieving the data out of the BI InfoCube source tablesduring execution of the 10 most used 7-Eleven queries are:

~ 69x faster0.7 sec48.1 secArticle Movements Analysis

~ 19x faster8.2 sec158.2 secArticle Sales Analysis - Month

~ 66x faster2.4 sec157.3 secStore Franchisee Matrix

~ 64x faster1.49 sec96.0 secPurchases, Sales and Stock Analysis

~ 14x faster2.4 sec33.9 secStore and Category Analysis - Day

~ 10x faster31.5 sec322.3 secStore and Category Analysis - Month

~ 34x faster2.8 sec96.3 secArticle Sales Analysis

~ 118x faster0.4 sec47.1 secOrders and Purchases Analysis

1.3 sec

0.6 sec

With BIA

~ 56x faster

~ 105x faster

Improvement

62.7 secSales Basket Transaction Analysis Last 3 Month

72.8 secProduct Movements Analysis (PMA) Report

Without BIAQuery

On average, there is a reduction of 96.7% in data retrieval runtime

Note: All the queries were run with default selection values

Page 18: 7 Eleven Overview

Benefits Realisation• Pre-defined Benefits

• Business owner• KPIs• Target value• Business changes• Enablers

• Unplanned Benefits• Monthly capture by business area• What is the new capability• Business value

Page 19: 7 Eleven Overview

Analysing 7-Eleven at High Speed -Short focused project

• Leverage investment in SAP technology• Minimise integration issues• Utilise Business Content as much as

possible• Leverage SAP Consulting skills & experience

• International team• Deliver business benefits quickly:

• Initial delivery in 5 months

Page 20: 7 Eleven Overview

Analysing 7-Eleven at High Speed –Business Benefits

• Provide reporting we could not do before:• Promotions, out of stocks, affinity analysis• Merge our data and market data

• Provide useful information at speed• Up to date at start of each day

• Put analytical capability in the hands of theend users• Power users in each business area

• Embraced business wide• ROI of less than 2 years• Just the beginning of our BI journey

Page 21: 7 Eleven Overview

7-Eleven IT Focus 2009 - SAP

• Store Portal Functionality Upgrade• Use our BI capability to drive store retail

performance:• Business focussed store level reporting• Online communication – All Retail Activity• Store KPIs & performance reporting• Store cluster benchmarking• Store layouts• Local range tailoring• Fresh food in-stock position