Fashion retailer Salvatore Ferragamo standardises on SAP

Luxury Italian fashion brand Salvatore Ferragamo has embarked on a project to centralise its IT infrastructure and standardise on SAP software.

Although  the company has been using SAP software to support its business processes for a number of years, it has now embarked on a new four-year centralisation project, called the Marlin Program.

"The main business driver for this project is the double-digit growth we're seeing in Asia Pacific," explained Walter Carmagnini, chief information officer at Salvatore Ferragamo.

"We also wanted complete insight on merchandise distribution across the business and wanted our systems to be ready for new acquisitions and new markets," he added.

So the company has begun deploying a standardised IT system across every country it currently operates in. The system comprises various SAP technologies, such as SAP for Retail, Knowledge Center for SAP BusinessObjects, SAP CRM and Netweaver. It is also integrated with Vision BeanStore, an open-source, Java point-of-sales solution, as well as its existing legacy systems.

"We're taking an incremental approach to developing this system, we've decided to start simple and stay close to SAP standards, then implement enrichments only when needed," explained Carmagnini.

Salvatore Ferragamo's systems are being standardised in China this year, followed by Japan and Korea in 2012, and then in the US, Europe, South-East Asia and Latin America through 2013 to 2014.

In terms of ascertaining a return on investment from the project, Carmagnini admitted it is difficult to measure.

"There is no choice, this type of project has to be done if we want to be flexible and take a localised approach," he said. "All that we can really do is invest in whatever helps us meet the needs of our customers locally, and the only decision to make is which software provider to invest in. The name of the game is sales volumes, so we are just trying to do everything we can to increase these."

He added that the only real alternative to SAP was to use Oracle, software that Carmagnini has used in the past to good effect, although that was before he worked in the fashion sector.

He said that the differences between SAP and Oracle are not huge, but Salvatore Ferragamo had been using SAP software for a number of years and there was no need to change, doing so would be risky, and there was no need to take such a risk.

The company has all of its software on-premise, and has elected not to use SAP's software-as-a-service (SaaS) offerings. Carmagnini said the company is not yet ready to move to SaaS.

"We want to have control over everything," he said. "We don't want to lose control, especially not just yet, at the beginning of this project. We'll monitor this project and how the solution is used, and then, maybe once we've gained confidence in the solution, we'll move to SaaS. But right now, we're still in the learning phase," he said.

The company announced the project at an SAP event in Florence, Italy, where the company was founded by Ferragamo, who began the business as a shoemaker in the early 1930s. He was soon making quality shoes for the likes of Rita Hayworth and Sophia Loren. The company is now an international fashion brand selling apparel for men and women.