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Loblaw Ugo Orsi, VP SAP AMS

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How Loblaw Followed SAP Best Practices

And Reduced Overall TCO by 30%

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Canada’s Largest Grocery Retailer

1 billion customer transactions per year

2,348 stores/more than 20 banners

1,797 pharmacies

#6 retailer1 in North America

$42 billion revenue

$3 billion EBITDA

$1 billion free cash flow

1.1% growth in same-store sales (2013)

1Supermaket News 2014 Top 75 food retailers and wholesalers

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One of the largest SAP Retailers in the world

1Supermaket News 2014 Top 75 food retailers and wholesalers

LCL SAP HANA SAP ECC/CRM

• SAP journey started in 2009

• Loblaw is one of the biggest if not the biggest SAP project

• 1 single instance circa 500 Stores live, all 21 Distribution

Centers live

• 98,000 named users, 8 million user interaction on a daily

average

• Database size 28 TB growing 1.6 TB a month

• Active Customers = 8.6MM (as of 01/15)

• Emails Distributed to Customers = ~2.2MM/wk

• Page Views on Website = ~5.2MM/wk

• Page Views per Offer Mailing = ~1.25MM/day

• HANA Journey started in 2012

• Production HANA system is built as 18TB production system

Today 4.86 TB

• COPA live and Store P&L reporting

• HANA CAR to go live in 2016

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 5 SAP America Inc. and Loblaw Companies Ltd Confidential – Please do not copy, print, transmit, distribute without prior approval

Metrics Loblaw Top 25% Average Bot 25%

Support Internal FTE / 100 Active Users 1 0.14 0.5 1.4 2.2

Support Incidents /100 Active Users 1 per Year 287.07 33.3 204.3 326.5

Y/Z Custom Programs 2363 515 1839.9 3152

Support Cost per Active Users 1 $3876.61 3431 5111.7 6816.9

Key Metrics

Active Users 10,4801

Internal Support Headcount 14.33

Support Incidents Full Year 30,085

2014 Total SAP Support Budget People $ 1,994,771

2014 SAP Support Budget / Overall SAP Budget $40,626,903 / $208,231,122

Note: 1 Active Users = Users with greater than 400 dialogue steps per week defined in Early Watch Reports

TCO Benchmark Data Loblaw Compared with Peer Group

Selected Peer Groups (Sample Size)

A Active Users minimum 5000 26

B Customers running SAP minimum 5 years 38

C Industry Peer (Retail) 6

D Industry Peer (Consumer Products) 25

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How Loblaw gained efficiency…

0

5

10

15

20

25

30

35

1 2 3 4 5

IT Maturity Level

Support Effectiveness

Support Maturity Gap Drives Risk & Cost

% E

ffecti

ven

ess 30%

Associated Net

Cost Reduction

Time

Solman

certification

30% TCO reduction, all the while adding 400 stores, 17 DCs and

adoption costs per user

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Solution Manager Certification

• Cornerstone of SAP control and Command Center to manage SAP

• Centralized Control on SAP Operation

• Faster Deployment comes with your license

• Pre-defined Key

• Fastest path to run efficient operation

• Guidance in one method and 1 set of tools

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How Loblaw gained efficiency…

0

5

10

15

20

25

30

35

1 2 3 4 5

IT Maturity Level

Support Effectiveness

Support Maturity Gap Drives Risk & Cost

% E

ffecti

ven

ess 30%

Associated Net

Cost Reduction

Time

Solman

certification

30% TCO reduction, all the while adding 400 stores, 17 DCs and

adoption costs per user

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Maturity Assessment

• Honest reality check

• Baseline for the road map to focus on key area

• Set achievable targets

2011

2015

2015 Goals

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How Loblaw gained efficiency…

0

5

10

15

20

25

30

35

1 2 3 4 5

IT Maturity Level

Support Effectiveness

Support Maturity Gap Drives Risk & Cost

% E

ffecti

ven

ess 30%

Associated Net

Cost Reduction

Time

Solman

certification

30% TCO reduction, all the while adding 400 stores, 17 DCs and

adoption costs per user

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Innovation Control Center / Operation Control Center

Innovation Control Center

• Build SAP like a factory

• Reduce time to value

Mission Control Center

• Faster issue resolution

Operations Control Center

Less disruption via proactive

monitoring

Shift left

SAP Solution Manager Customer

SAP

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How Loblaw gained efficiency…

0

5

10

15

20

25

30

35

1 2 3 4 5

IT Maturity Level

Support Effectiveness

Support Maturity Gap Drives Risk & Cost

% E

ffecti

ven

ess 30%

Associated Net

Cost Reduction

Time

Solman

certification

30% TCO reduction, all the while adding 400 stores, 17 DCs and

adoption costs per user

© 2015 SAP SE or an SAP affiliate company. All rights reserved. 13 Internal

BPO – What does it look like? BPMon Alerts

14 © 2014 SAP SE or an SAP affiliate company. All rights reserved.

How Loblaw gained efficiency…

0

5

10

15

20

25

30

35

1 2 3 4 5

IT Maturity Level

Support Effectiveness

Support Maturity Gap Drives Risk & Cost

% E

ffecti

ven

ess 30%

Associated Net

Cost Reduction

Time

Solman

certification

30% TCO reduction, all the while adding 400 stores, 17 DCs and

adoption costs per user

15

ONE SAP / ONE Service

STRATEGY,

INNOVATION &

THOUGHT

LEADERSHIP DELIVERY,

OPERATIONS &

SUSTAINMENT

1

Software

CDP Max

Services

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In Summary

• Select a good set of partners

• Invest in your operation and grow the maturity of OCC

• Have a strategy to build a COE

• Be ready to invest in your partnership with SAP – not necessarily $ – time

• Leverage Solman

• Be patient with your investment – 2 or 3 years will be necessary to realize the

benefits and reduction in TCO

• Be patient to go fast

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QUESTIONS?

0

5

10

15

20

25

30

35

1 2 3 4 5

IT Maturity Level

Support Effectiveness

Support Maturity Gap Drives Risk & Cost

% E

ffecti

ven

ess 30%

Associated Net

Cost Reduction

Time

Solman

certification

30% TCO reduction, all the while adding 400 stores, 17 DCs and

adoption costs per user