Presentation on theme: "ALBERTSONS INC. ERP SOLUTION IT4 Consulting Team"— Presentation transcript:
1ALBERTSONS INC. ERP SOLUTION IT4 Consulting Team Reza Edalat (Financial Analyst)Mike Darmo (Operations Analyst)Arbi Torasian (ERP Specialist)Francisco Flores (CEO)
2Preview of Main Points Introduction Brief History of Albertsons Industrial AnalysisPorter Five ModelImplementing ERPSWOT AnalysisWeighed Scoring ModelFinancial ConsiderationsConclusion
3Brief History of Albertsons Albertson was originated in Idaho, 1939Family Run Joe Albertsonby 1947 it operated six stores in IdahoCo-founder Albertson died in 1993 at age 86In 2001 Larry Johnston, former CEO , took over as chairmanOnline StoresToday Albertson is one of the biggest food stores, bought Bristol Farms
4Industrial AnalysisAlbertson’s Company is starting as the food and drug retailer worldwide.Albertson’s need to analyze the growing markets and customer behaviors to be able to competeAlbertson’s has the third rank on the Grocery markets in US
5Porter Model Porter model for Albertsons Rivalry among Competitive Industry: Costco and Wal-Mart, traders Joe’s and whole foodsThe Bargaining Power of Customer: regular American householdsThreat of New Entrance: unlikelyThreat of Substitutes: Ralph, Vons, and long drugsThe bargaining power of suppliers: fresh fruit and vegetable grower, food corporations; Johnson and Johnson
7Implementing ERP Functional Areas that would Benefit with ERP Accounting and FinanceHuman ResourcesMarketing and Sales
8Implementing ERP Cont. Connectivity requirements: Secured database that is stable and fastIntegration with other systemsSupport multiple administrators, users, accounts, banks, and organizationsMust be database independent (SQL, Oracle)Web/E-Commerce requirements:Client web browser supportMust have easy configurationSupport minimal technology requirements on clients end.Powerful software to perform manual processes
9SWOT AnalysisWEAKNESSESDrop of the company profit due strikes and company overall performance.Decline of the value of its stock price.Challenge to regain customers back after the firm went on strike.Lack of up to date information of shipping, purchases, and delivery orders.Lack of employee organizational skills.STRENGTHSSecond food-grocery Industry leader among its competitors.Growth of Albertson is based on its expansion and joint venture to similar industries.Numerous awards and recognition for product quality and great recycling process.Multiple services in one stop makes easier for customers to shop at Albertson.New software technologies such as hand held scanners and self-checkout lanes.
10SWOT Analysis Cont.THREATHSThe sell of Albertson stores in Idaho due to competitionThe economy downturn is affecting tremendously the flow of the business is some areas.The joint venture of other firms within the same industry.The location or relocation of firms in the same industry in a radius close-by to Albertson stores hurts the business.The growth competition of similar industries such as Wal-MartOPPORTUNITIESTo be able to increase the demand of regular and no regular shoppers.To follow the trend of competitors in selling variety of product to be able to attract new customers.The challenge of attracting some of the Whole Food shoppers by implementing natural and organic food products, public relations, and employment education.The implementation of online shopping, order deliveries, and scanner devices.
11Payback Analysis for ERP Project: Assume the project is completed the first year 0Discount rate10%Year 0Year 1Year 2Year 3Year 4TotalCost-$32,485,000-$1,894,500-40,063,000Discount factor0.910.830.750.680.62Discounted costs-$29,561,350-$1,572,435-$1,420,875-$1,288,260-$1,174,590-$35,017,510Benefits$0$70,000,000$70,000,0 00$280,000,000Discounted benefits$58,100,000$52,500,000$47,600,000$43,400,000$201,600,000Discounted benefits + costs$56,527,565$51,079,125$46,311,740$42,225,410$166,582,490Cumulative benefits + costs$26,966,215$78,045,340$124,357,080ROI475%PaybackPayback in year 1
12WEIGHTED SCORING MODEL FOR ASP vs. ERP CRITERIAWEIGHTASPOption 1ERPOption 2Supports key business objectives10%95Has strong internal sponsor9%7991Has strong customer support6%85Can be implemented in one year or less8%9080Provides positive NPV7%92Has low risk7589Introduces new technology5%Increased business productivityProvides greater quality assurance14%Meets budget constraintsIncreases shareholder wealth94Increases business operations93WEIGHTED SCORES100%88.7290.3
13ConclusionWe consider really important the fact buying the ERP system with the SAP R/3 software would help us accomplish our goals, such as:Organize our filing system by departments, branches and headquarterMaintain up to date information of shipping, purchases, and delivery ordersEnable us new levels of business process and technology integrationAllow us to upgrade to any of the full range of SAP Solutions, so management can:
14Conclusion Deploy the functionally for Customers Product life cycle Supply chain managementSupplier relationship management