In Nova Scotia, liquor is big business – but the Nova Scotia Liquor Corp. wasn’t able to optimize customer service with its old legacy systems.
So it rolled out an enterprise resource management system along with a retail solution from SAP to reduce operational expenses – and keep customers happy by ensuring the proper product mix at each store and reducing stock outs.
“We had a system in place that wasn’t meeting our business goals,” said Mark Brown, the NSLC’s vice-president of information technology. The NSLC had an aggressive business plan, but each change meant customization to its IT system – a process that was painfully slow. In order to streamline operations and gain tighter control of its financial information, changes were required not only at a technology level, but at a business process level.
The NSLC is the fourth largest retailer of alcohol in Canada, and the largest single retail business in Nova Scotia, generating half a billion dollars of revenue every year. It employs more than 1,300 people, offering 3,000 products through 108 retail stores, 2,100 licensees and 45 agency stores.
Its previous system had a separate store for analytics, which led to inconsistencies in its data. “It caused us to not have a lot of confidence in the numbers,” said Brown. The NSLC had a lot of “workarounds,” he said, which led to point solutions, making integration difficult. The IT department spent its time and energy validating data, rather than focusing on the customer.
Because its legacy systems were not integrated, the organization was spending a large per cent of its time reconciling data to ensure management had the correct information to make decisions, said Randy Broda, senior vice-president of retail for SAP Canada.
After comparing the costs and benefits of various products on the market, the NSLC chose SAP ERP and SAP for Retail. NSLC is a Crown corporation that operates as a retailer and, as such, it’s able to take advantage of the province’s shared services model among public sector organizations.
The NSLC’s SAP environment is supported by the province’s SAP Competency Center, said Broda, which supports all government departments and agencies, 14 school boards, some 450 schools and several municipalities that also run SAP. In this case, the province is hosting the SAP hardware on behalf of the NSLC.
Because this was more than a technology change, but rather a business process change, the enormity of that change was a challenge. Though not insurmountable, said Brown, it required significant effort over 12 months to manage this process, which included ongoing training for employees. The NSLC went live with Phase 1 on April 2.
This included SAP ERP Financials for tighter financial control and insight across the enterprise, the SAP Store Management application to provide staff with up-to-date information, forecasting applications to minimize inventory, and transportation and logistics software for supply chain management.
Currently the NSLC is focused on replacing its point-of-sale system, which will be integrated into its SAP system. At the same time, the IT department is looking at how to maximize the benefits of Phase 1. The next phase is still in the works, though it could include adding modules, such as warehouse management, merchandise assortment planning and human resources.
Though Phase 1 has only been up and running for a few months, employees are now able to see the entire process involved in serving customers. “The business units are really coordinating amongst themselves,” said Brown, “where before a business unit might have done something, and we didn’t know until later if we got it right.” With tighter integration of data, processes and technologies, employees are able to see if they’re making the right decisions from the get-go.
For NSLC, going through this business process change has allowed it to focus on what it wants to accomplish, rather than how it’s going to get there. “Now that energy can go into what we do next,” said Brown.