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North Pole Confidential: Seeking the Mother of All ERP Systems
As our exclusive look at Santa's RFP reveals, St. Nick's legendary customer service and logistical needs are pushing vendors to the brink as they bid to replace his centuries-old systems. But who can say "no deal" to Santa?
December 20, 2007 — You think you have enterprise software headaches? Trying being Santa Claus.
CIO recently obtained a copy of an RFP (request for proposal) that Claus and his elfin management team distributed to the world's top enterprise application vendors in 2007. The RFP contains never-before-seen information that details the scope of Claus's worldwide operations and his IT needs.
The proposal process was supposed to be completed by the end of last February and the system implementation started in April, which would have provided enough time to get everything ready for this Christmas season.
But bad news, kids: So far, leading enterprise application vendors have been overwhelmed by the enormity of Claus's needs, and the process has dragged on without resolution. "Every requirement, every price consideration with [Claus] is just unheard of," says an executive at one of the ERP vendors, who requested anonymity due to the sensitivity of the ongoing negotiations and the fact that he didn't want to get coal in his stocking. "We're having to rewrite our SLAs [service-level agreements] over and over. This is out of control!"
Analysts say that Claus's operations are still using paper-based manual processes for inventory control, CRM, procurement, distribution, payroll and forecasting. "He doesn't even have a fax number," reports one exasperated vendor rep, who also requested anonymity. (Calls to Claus's media relations department weren't returned.)
Mr. Claus seeks a fully integrated enterprise suite of applications, including ERP, CRM and SCM modules, for The North Pole operations team and its suppliers and retailing partners. The logistical and technological requirements are straight out of a CIO's nightmare. Just a few of Claus's extreme system requirements taken from the RFP:
- Does the system have demand planning capability that receives and automatically processes all customer requests (Christmas wish lists via postal mail, e-mail, online forms, text messages and Facebook FunWall posts) of the 667 million children eligible to receive Christmas gifts?
- Does the proposed software track with 100 percent accuracy the location-based customer information (street address, city/town, state, ZIP code) and automatically update any address, age and/or clothing-size-based changes to each customer's record?
- Does the proposed system connect to a searchable data warehouse that stores the 10+ gift requests that those 667 million children make each year?
Indicate whether the proposed software can track children's temperaments (naughty vs. nice) on a 24/7/365 basis and link that back into the demand management application?
-Does the proposed system seamlessly enable back-end communications (receiving, fulfillment, shipping, invoicing, returns) with the enterprise systems of the more than 1,000 toy, clothing and consumer electronics manufacturers, every single retailing business (from retail chains to mom-and-pop stores) that stocks and sells Christmas presents? How about the major coal-mining companies?
- Does the proposed system have supply chain functionality to determine the optimal routes for delivering packages to approximately 156 million destinations, covering 111 million miles, and with a reindeer-powered transportation vehicle that carries 156,000 tons of cargo (roughly twice the weight of the Queen Mary) taking up 31 million cubic feet of cargo space (roughly 1,500 homes)?
- Does the proposed system have scheduling applications that can coordinate those 156 million deliveries to 24 time zones in one long night?
- Does the proposed software have the functionality to schedule, process and confirm 1,500 customer home visits per second during that 24-hour period?
Indicate whether any of your customer references have delivery vehicles that can move at approximately 3.6 million miles per hour?
- Does the proposed software work in extreme weather conditions (snow, ice, high winds) and with data feeds from RFID tags (for big-ticket presents) and GPS-enabled reindeer?
"What we keep coming back to is this sleigh," says the anonymous software executive. "We're still not sure how that's going to fit into our system. There's just too much speed and uncertainty there."
As of the week before Christmas, vendor sales reps were flying back and forth from the North Pole, but no agreement had pleased the big guy. With a sigh, the anonymous executive says: "It's going to take a Christmas Miracle to pull this one off."