OK Franchise Division, SA's largest voluntary buying organisation with over 400 franchisees, has licensed and implemented the Lawson enterprise management software suite from Solit SA in a deal worth R4.2 million.
As a consequence, it is providing significantly improved service and better information to its members, and has laid the foundation for far-reaching new-generation applications. These are critical issues in a market where consumers are becoming more educated, says Sergio Martinengo, chief executive of the OK Franchise Division, which is part of Shoprite Checkers.
In a visionary move, OK Franchise Division is contemplating taking Lawson to its franchisees in an ASP (application service provision) model as part of the second phase of its implementation. This phase will be worth an estimated R4.8 million.
"Where we have typically been focused on negotiating product and price for our members, we are now refocusing our business to become a true franchisor rather than just a facilitator of product and price," says Martinengo. "As a franchisor, our mission statement is to help our franchisees improve their business, which means timeous delivery, improved processes, and standardisation of back-end processes and IT platform for extraction and provision of current information."
OK Franchise Division has total buying power support of R18.5 billion a year, while its own annual turnover is R1.3 billion. Its flagship is the OK Foods range of outlets, while other stores it services are the wholesale Mega Save, 8 Till Late convenience stores and Sentra rural supermarkets.
In considering an application to support its new business drive, OK Franchise Division decided in principle not to write its own software, but to apply observed best practice as embodied in an ERP (enterprise resource planning) suite with strong e-business features. After an extensive and rigorous evaluation process embracing 12 suites, it chose Lawson Software.
OK Franchise Division chose to implement Lawson in "vanilla" mode, as this provided fastest benefit and the most rapid return on investment. Four consultants from Solit delivered a proof of concept at OK Franchise Division's head office in Brackenfell, Cape Town, in two months. Subsequently they have automated the central warehouse with its 5 000 line items, and connected it via Diginet to Johannesburg, Durban, Bloemfontein, Port Elizabeth and Windhoek. All are online and sharing information.
Lawson has been deployed on a dual-processor Sun Solaris server - scalable to eight processors to cope with anticipated growth - running in thin client mode on the company's WAN. It was initially deployed against Microsoft's SQL Server, but OK Franchise is migrating it to Sybase, for scalability, manageability and performance issues.
Currently it supports 150 internal concurrent users, but it must cater potentially for any number of external users, and in future 800 suppliers in a potential e-procurement extranet.
Immediate benefits OK Franchise Division has enjoyed are a smooth-running supply chain; reduction of out-of-stock and highlighting of over-stock situations; and a consolidated and efficient product database.
"The success of the OK Franchise Division project, and the manner in which it has set up the company for improved business, belies some of the industry myths surrounding enterprise management software," says Gerhard Visser, director in charge of the Lawson division at Solit. "It highlights the role that quality software, deployed rapidly by skilled consultants, can play in a strategically-oriented company."
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