SAP to Build Home Depot’s IT Foundation

Colin C.

Updated · May 18, 2005

BOSTON — Home Depot , which until recently ran on a “stack
'em high and let 'em fly” mentality, will reshape its IT operations with
the help of SAP .

The pact between the world's third-largest retailer and third-largest
software vendor was announced here this morning at SAP's annual customer

Home Depot will use SAP's software for retailers, which utilizes service-oriented architecture , to help manage its supply chain and
inventory. Terms of the deal were not disclosed.

“[This agreement] makes sense because we are such a fast-growing company,”
Robert DeRodes, Home Depot executive vice president and CIO, said during a
panel discussion.

Home Depot opens a new store every 48 hours and is increasingly looking at
new channels and international markets, including Mexico and China, to
continue its torrid growth.

The Atlanta-based company has come a long way in its use of technology. Just
a few years ago, its new CEO wanted to send an e-mail message to the
company's employees and was dismayed to learn that there was no way to do

Stores operated almost autonomously and under a strategy DeRodes described
as “stack 'em high and let 'em fly.”

But now, in addition to its expanded relationship with SAP, Home Depot is also
bringing self-checkout, price scanners and other technology to the store
floor. That creates a host of new data that can be used if properly managed
and analyzed.

The Home Depot partnership was announced by SAP CEO Henning Kagermann who
said he's optimistic that large corporations, especially in the United
States, are prepared to invest in software that integrates with other
applications and improves efficiency.

“IT cannot be viewed as a cost center in the future,” Kagermann said. “It
has to be viewed as a strategic lever for business.”

SAP is on track to ship its business process platform, a complete suite of
SAP business applications, including offerings customized for specific
industry sectors, in 2007, he said.

The offering is designed to be easily integrated with software and equipment
from other vendors, Kagermann said. That's a continuation of SAP's recent
partnering efforts.

Late last year, SAP and HP announced a joint bundled service. And just last month, the German company and
Microsoft said they will tie together SAP business applications with Microsoft Office.

SAP also announced a new deal with JPMorgan Chase. The financial services
giant will use mySAP ERP as part of the bank's long-term
plan to improve its finance platform, the companies said.

The Sapphire show continues tomorrow when SAP and Intel
are expected to announce a new effort to improve RFID-powered
supply chains.

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