Kimimpex enhances retail processes with IBM and SAP

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Kimimpex Trade & Leasing Ltd owns and operates the 2be chain of mobile phone stores, offering a one-stop shop for a wide range of mobile phones, telecommunications services, consumer electronics and accessories. As a result of organic growth and strategic acquisitions, the company has expanded rapidly. It now operates 126 stores in Bulgaria, has a subsidiary company in Macedonia with 13 stores, and employs 1,020 people.

As a result of this growth, Kimimpex found that its existing IT systems were struggling to cope. Aging HP and custom-built server hardware was causing performance and reliability issues. Moreover, legacy point of sale (POS) and back-end applications were hindering the company’s attempts to automate its processes and access timely and accurate business information.

“We work with several different mobile phone operators and manufacturers, and we have run a variety of promotions and customer loyalty programs, so our supply chain and sales activities are relatively complex,” explains Teodora Mihailova, General Manager of Kimimpex. “Our existing IT systems were capable of meeting our requirements at first, but as we opened more and more stores, we started to have problems.”

The existing POS systems were slow, causing delays for customers, and the communication between the stores and back-end systems at head office was not rapid or reliable enough. After each day’s trading, it took five or six hours to gather sales information from the POS systems, so reports were not ready until 10.30 or 11pm. As a result, it was difficult to plan the logistics quickly enough for stores to be re-stocked the following day.

“We wanted to be able to get the information more rapidly, and we also wanted better control and analysis of our sales, logistics and finances,” says Teodora Mihailova. “We realized that a centralized ERP platform would be the best option, so we began to look for a solution.”

Choosing a solution

“We wanted the best for our business, and SAP is definitely a leader in the ERP sector,” comments Teodora Mihailova. “SAP is one of the world’s largest software companies, and has a wealth of experience of providing solutions for retailers – so we were sure that SAP could meet our needs.”

Kimimpex knew that the SAP solution would need to be customized to align with the company’s specific business processes, and looked for a partner with the retail know-how to implement the software rapidly and effectively. It was important for the solution to be up and running before the busy sales period in December, which gave the company an eight-month window for the project – five months for the implementation itself, and three for optimization and user training.

“IBM Global Business Services is one of the largest and most experienced SAP Partners in the world, and has been involved in numerous implementations in the retail sector; we were convinced that the team from IBM Bulgaria could handle the project,” says Teodora Mihailova. “Moreover, we needed new hardware for the solution, and it was a logical step to ask IBM to deliver this too.”

Creating a new infrastructure

IBM Global Technology Services helped Kimimpex design, size and deploy the infrastructure for the new SAP applications and a 500GB Oracle database. An IBM Power Systems p5-570 with eight IBM POWER5+ cores is configured as the production server, linked using IBM PowerHA to a standby logical partition (LPAR) on a smaller p5-550Q. In normal operation mode, the p5-550Q runs two other LPARs – one for a test and development environment for the SAP application landscape, and another for IBM Tivoli Storage Manager, which handles backup and restore processes. In the event that the production environment must be moved to the p5-550Q, these less-critical LPARs are automatically sized down by PowerVM mechanisms so as to maintain high throughput for the production SAP system.

“Our old server hardware was quite unstable, and we saw an enormous improvement in reliability as soon as we moved to the IBM Power Systems infrastructure with PowerHA,” comments Teodora Mihailova. “Also, the performance increase has been considerable; for example, we can now obtain the daily sales reports within one hour – a process time reduction of more than 80 percent.”

Data for the SAP application environment is held in a storage area network (SAN), based on IBM System Storage DS4700 technology. This provides a highly scalable storage infrastructure, allowing Kimimpex to grow its systems as and when the business needs require. The DS4700 can hold a mixture of high-speed and high-capacity disks, helping the company to find the right balance between performance and cost-efficiency in its storage environment.

Tivoli Storage Manager backs up data from the DS4700 to an IBM System Storage TS3100 tape library for off-site storage. The data is backed up incrementally – so there is no need to move the entire database from disk to tape every night. Instead, after an initial full backup, the Tivoli software sends only the changes in the data to the tape – so backups and restores can be conducted much more rapidly.

Deploying the SAP applications

While the hardware was being implemented, IBM Global Business Services helped Kimimpex plan and install the new SAP application landscape.

“Because we were working to a tight schedule, IBM suggested leveraging the SAP Business All-in-One solution, which, combined with IBM project management methodologies, helped us accelerate the deployment and customization of the software,” explains Teodora Mihailova. “The cooperation between IBM Global Business Services and SAP was remarkable, and demonstrated the value of working with partners that have real retail ERP experience – they helped us meet our five-month deadline, which has put us in a good position for the Christmas retail period.”

Optimizing business processes

The company’s new SAP Business All-in-One solution provides financial accounting, controlling, materials management and sales and distribution functionalities, as well as the SAP NetWeaver^® Business Intelligence component for real-time reporting. In addition, IBM Global Business Services helped Kimimpex to integrate the applications with POS Info+ from Selmatik, a Bulgarian software company.

“The SAP Business All-in-One solution is helping us optimize our logistics processes,” says Teodora Mihailova. “The POS integration enables us to view sales and stock levels at the end of each day, so we can plan more accurately and send the right products to the right stores at the right time. This avoids wasting time and resources, and provides tighter control of our finances – so the business runs more efficiently. We estimate that this has enabled us to reduce operational costs by 30 percent.”

With an integrated ERP system, Kimimpex has a single repository for business data – and a single source of truth. SAP NetWeaver Business Intelligence uses this data to generate reports for procurement, sales, logistics and finance teams across the business – helping them to make rapid business decisions based on timely, accurate information. With the SAP solution, it is easier to see which products are selling best, and which promotions and loyalty schemes are most effective.

Implementing SAP Business All-in-One has also helped Kimimpex reduce workload for staff by automating processes such as procure-to-pay and order-to-cash.

IBM Global Business Services has supported Kimimpex in developing its strategic direction for HR and in optimizing its Human Capital Management processes.

Finally, IBM Global Business Services has helped Kimimpex plan for the future of its SAP application landscape and its business optimization by creating a Strategic Projects Portfolio, helping to plan and prioritize future projects that will extend the solution and support business growth at Kimimpex – for example, enhancing business analysis and introducing real-time reporting during working hours.

“With software from SAP and Selmatik, and hardware and services from IBM, Kimimpex has achieved its objectives – creating an IT platform that can grow with the business and deliver the information we need to compete effectively as Bulgaria’s leading mobile phone retailer,” concludes Teodora Mihailova. “Ultimately, the optimization of our business processes will help our employees work more productively, and will provide a better service for customers.”