SAP to build Pepsi's ERP system

SAP AG added another Fortune 500 company to its customer list Wednesday, when PepsiCo Inc. said it will standardize its global consumer goods empire on the mySAP Business Suite.

Purchase, New York-based PepsiCo has not previously had a company-wide ERP (enterprise resource planning) system, according to spokesman Mark Dollins. Units the company built by acquisition, such as Frito-Lay, Tropicana and Gatorade, are still running the business applications they selected as independent companies.

PepsiCo decided to move to one ERP system to better integrate its operations, and began evaluating vendors several months ago. SAP won the contract because of its track record and extensive history in the consumer goods market, Dollins said.

PepsiCo is tight-lipped about its ERP plan details. The company declined to disclose the budget for the project, and Dollins said the scope and sequence of the roll-out is still being determined.

"All we can say at this point is that we expect it to be a multiyear project," Dollins said. Heading the initiative is PepsiCo's vice president of enterprise systems, George Legge.

SAP will displace some of its competitors in PepsiCo's IT infrastructure -- most notably, Oracle Corp., which counts Pepsi-Cola North America, Frito-Lay and Tropicana as customers of its ERP applications. PeopleSoft Inc.'s software runs PepsiAmericas' CRM (customer relationship management) system, while Siebel Systems Inc. powers Quaker Oats'. Also in the mix are a number of applications from smaller vendors and a profusion of custom systems.

PepsiCo rang up US$27.6 billion in sales last year, from hundreds of brands within four operating divisions. The company has tried before to streamline its systems: In 1999, it created the Plano, Texas-based PepsiCo Business Solutions Group as a central IT organization. Five years later, PepsiCo still has a fragmented technology infrastructure.

While Legge leads the SAP initiative, the Business Solutions Group will be involved in it, Dollins said, as will Chief Information Officer Tom Trainer, who joined PepsiCo last year.

Dollins declined to comment on when or if SAP software will directly replace systems from its rivals. PepsiCo's intention is to standardize around SAP, but the company hasn't yet worked out the details of the implementation's timeline and extent, he said.

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