IBM and SAP form retail alliance

IBM and SAP have formed an alliance in the retail industry which they claim will allow retailers to make more efficient use of existing applications, while reducing ICT infrastructure costs and supporting new technologies, such as radio frequency identification (RFID).

The non-exclusive partnership, announced at SAP's Sapphire international customer conference in New Orleans, aims to bring together the ICT retailing hardware and software expertise of IBM and SAP at a time when many retailers are struggling with the rising complexity of their hardware and software systems.

The move is designed to strengthen an existing alliance between the two vendors. In addition to combining their retail product lines, IBM and SAP claim they will share consulting knowledge and enhance offerings in areas of business process analysis and best practices.

The collaboration might expand to include supply chain, human resources, store operations, customer relationship management, finance and evolving technologies, the companies said.

Maning director of SAP Africa, Claas Kuehnemann, said the deal was not about technology from one vendor and applications from the other. "It is all about helping retailers to strategically align business processes and technology, and driving costs down and revenues up," Kuehnemann said. "We have achieved some great results covering all the business processes of a retailer. We will therefore have a joint go-to-market strategy and we will operationally execute together as well."

General manager of IBM's worldwide distribution sector, Christian Nivoix, said that retailers would benefit significantly from the agreement. "On the one hand, retailers are battling a commoditisation of their products and need to find ways to operate more cost-efficiently," Nivoix said. "On the other hand, they are having to connect more systems in their stores. We can help them to reduce the complexity and increase the efficiency of their ICT retail systems by offering complete integration. We are putting all our hardware and software on the table."

The deal will focus on creating systems based on the companies' existing retail offerings, such as SAP for Retail, SAP NetWeaver, IBM Store Integration Framework and IBM WebSphere.

Retail solutions manager at SAP Africa, Brandon Shaban, said IBM infrastructure was so pervasive in the retail enterprise that having interoperability between IBM's infrastructure and SAP's applications was a big win for retailers.

RFID technology, in particular, was an area where retailers saw huge opportunities to increase store efficiency but, at the same time, they saw challenges in connecting multiple devices with their software systems, Shaban said.

"Retailers, for instance, may want to take advantage of wireless personal digital assistants (PDAs) to provide real-time support, but have difficulty integrating these devices with their enterprise resource planning (ERP) system," he said. "Under our new alliance, IBM and SAP will work closely together to help them integrate all this technology."

Shaban stressed that the deal would not affect existing partnerships.

"It is a non-exclusive deal, which means that both IBM and SAP will continue to work with their local partners," he said.

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