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A challenging rollout of SAP’s enterprise resource planning software at hardware chain Mitre 10 NZ is progressing with the software now being used in the cooperative’s Ponsonby store, with more to follow.
Accounts filed with the Companies Office for the year ended 30 June 2024 say $38.6 million was charged to the company’s income statement during the year, down from $64.7 million in 2023.
For that 2023 year, Mitre 10 NZ reported a pre-tax loss of $69.4 million, up from $27.7 million in 2022, due to the costs of the software rollout. For 2024, that dropped to a loss of $62.1 million.
The ERP system was implemented at the company’s headquarters in the 2023 financial year, with the exception of national payments and rebates processes. A rollout to a single store in Ponsonby, Auckland, occurred during the 2024 financial year.
“The remaining Mitre 10 stores are yet to adopt the new system,” the 2024 accounts say.
Asked for comment, Mitre 10 CEO Andrea Scown told Reseller News the cooperative was proud of the capability it now had in the business.
“The planned investment of this programme has been ambitious and enables us to deliver for our customers and on our future strategic ambitions,” she said.
“The programme is no longer a stand-alone initiative but an integral part of the co-operative’s operating model, underpinning continuous innovation and excellence in service delivery.”
Key intellectual property now resided within the company’s teams, allowing internal talent to be used for sustainable growth and future strategic development, Scown said.
“Our proof-of-concept retail solution is fully rolled out at Mitre 10 Ponsonby showcasing the gains that can be made with new retail technology and processes,” she said.
A new “digital wayfinding” feature on the retailer’s website and available in all stores was an example of new functionality the software was bringing to the customer experience.
“This feature displays the in-store location of the product by aisle and bay to help customers find what they’re looking for,” Scown told Reseller News.
However, the migration of suppliers to an new, interim national payments system had presented challenges.
“We are grateful to our supply partners and members for working with us through that transition,” Scown said.
“We are pleased to have been current with our payments to suppliers for the past quarter as greater automation has been achieved, and believe we are now largely through this issue with a very small backlog of reconciliations to complete.”
The store rollout and national payment processes parts of the project were not interconnected but Mitre 10 was deliberately moving at a pace that allowed our stores to successfully implement changes before moving to the next phase of deployment, Scown said.
Before the rollout, in the year to 30 June 2021, Mitre 10 recorded a $1.3 million pre-tax profit.
The rollout coincided with a change in accounting rules that require certain cloud software costs to be expensed rather than capitalised and depreciated over time.