The deal, revealed this week, is part of a $110 million, seven-year IT outsourcing agreement with EDS; the SAP implementation includes manufacturing, supply-chain, finance, accounting, performance management, and customer-relationship management software and is expected to cost $35 million--a price tag that includes licenses, implementation services, and maintenance. The implementation will begin next month and is expected to be completed by early 2005.
"Over the last two to three years, we've been working on stabilizing our business and focusing on core brands. Making a technology change was always part of the plan," Dial CIO Evon Jones says. Jones and his team took "cursory looks" at other enterprise software vendors but went with SAP because "SAP and the processes with SAP's software are regarded as best in class and will drive operational efficiencies, particularly when you start to get greater visibility within your supply chain."
Dial will take an $8 million write-off for the Oracle software. But the maker of Dial Soap and other consumer packaged goods expects to save up to $21 million in capital and operational expenses over the term of the EDS outsourcing agreement. It also expects the SAP implementation to augment that savings and to make Dial a more competitive company.
"If you take a look at the [consumer packaged goods] space, most of our major competitors run SAP today," Jones says. Implementing SAP "allows us to gain parity."