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Arvind ditches SAP, hugs Oracle
By Saheer Karimbayil
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Saturday, 09 August 2008, 17:53 IST
Bangalore: Arvind Mills' retail venture Megamart has selected Oracle Retail to provide the software support for their growing retail business. Oracle would support Arvind by giving a platform to manage its retail processes from supply chain to stores.
Arvind Mills, a company which has been using the SAP products for over a decade, could have stuck to the same vendor, but it was quite surprising when the company decided to bet on Oracle, the arch rival of SAP. The reason for the 'defection' was not disclosed.
The retail IT market was witnessing a fierce competition between these two IT majors ever since the organized players in retail began demanding IT solutions to manage their constantly growing business. Back in 2005, to reinforce its grip on the retail space, SAP acquired the U.S. based Khimetrics, an enterprise software solution provider, which was specializing in customer demand management solutions for retail, financial services and consumer products goods (CPG) industries. Followed by this, SAP India opened a Centre of Excellence in Mumbai as part of its attempt to tap the retail market. At the launch of the facility, Alan Sedghi, President and CEO, SAP Indian sub-continent, had said, "The retail opportunity in India is expected to be $440 billion by 2010. Growth in the mid-market and retail segment is what we are looking at." Since then the company has been leading in retail vertical with almost all major retail clients in hand such as Pantaloon, Reliance Fresh, Subhiksha, RPG Retail (Spencer's), ITC and Vishal Mega Mart.
To take on SAP, Oracle in 2005 acquired a Minneapolis company Retek for $630 million by outbidding its rival. Further intensifying its competition, Oracle in 2006 set up a center of excellence in Bangalore with focus on retail segment. "Our acquisition of Retek would help us acquire clients in the booming retail segment in India. Our Center of Excellence in Bangalore is already working with Retek for developing special software designed for the retail sector. It would be an integrated IT platform with end-to-end solutions," the company's India head Krishan Dhawan had said last year. The company also added customers including, Aditya Birla, LifeKen, Homecare, and Arvind Mills to its retail business.
The Arvind' alliance with Oracle was already in the air when the former revealed its decision to choose the latter's retail solution early this year. The implementation of the solution, which comprises five modules - Merchandise management module, Pricing module, Inventory module, In-store module and Planning module-, will be carried out in three phases spanning 24 months.
Arvind is planning to increase the number of retail stores in the country from 93 to 250 by 2010 at an investment of $100 billion. And the Oracle solution, which, the company claims to be used by the top 20 retailers in the world, will help Arvind easily manage the retail chain.
"Oracle Retail's experience with retail organizations across the world and its industry-specific practices will help Arvind brands achieve its customer centricity and profitability while allowing them to compete effectively in the growing Indian market," said Ronan Gilhawley, vice president and head of Oracle Retail, Oracle Asia Pacific.
