Adidas Heads to the Cloud to Control IT Spending

The sporting goods unit in Latin America implemented cloud-based procurement software in a multinational environment. It wasn't easy.

Adidas Latin America decided to implement cloud-based procurement software to improve internal compliance and consolidate spending management. The company is a regional subsidiary of the Adidas Group sporting goods empire, which includes brands such as Adidas, Reebok and Rockport.

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Procurement at $1.4 billion Adidas Latin America was complex--involving different currencies and languages--and disjointed. Some countries had developed homegrown procurement solutions; others had paper-based processes.

"If we were a small organization, that might have continued to work," says Adidas Latin America's head of IT Christian Bader. "But we were growing fast, and we weren't getting the visibility we needed."

Seeking to improve internal audit compliance and streamline spending, Bader evaluated several spending-management solutions and decided on Coupa for its multinational support, total cost of ownership, integration with the ERP system, and capacity for customization.

By opting for a hosted system, Bader was able to fully implement Coupa in Panama--where the company's Latin American operations are based--in six weeks earlier this year. Bader started with the country that had the most advanced procurement processes already in place and adopted an 80-20 attitude. "You will never cover all the cases you need to handle in one system," Bader says.

"We wanted to address the most common processes and keep it simple." Cash advances for travel, for example, will not be done in Coupa. "I'd rather leave it out than blow up the whole system to get it in," Bader says. Next up is Chile, where there was no software in place, so the implementation will take longer, one department at a time, starting with human resources. Later this year will come Argentina, Peru, Brazil and finally Mexico--simply because they were already deep into a massive warehouse management system implementation. IT is managing the introduction of the cloud-based system remotely from Panama City, keeping the cost of the project low. Bader opted to add on Coupa's business intelligence tool, the Spend Optimizer, so employees can see on their own how much they're spending and on what.

"We shifted the ownership and workload [associated with that] from finance, which should not have to do it, to the people actually doing the procurement," Bader says. Soon, Adidas Latin America will centralize its spending management and consolidate its business with certain vendors, leading to lower costs.

Adidas Latin America's complex account structure made integration between Coupa and SAP difficult. "It created a lot of stress, but we solved it," says Bader. "We should have addressed it before we started the project, but we were moving too fast."

But change management was the biggest challenge. "Our experience, especially in Latin America, is that you have to get the buy-in of the full organization, from the warehouses to marketing to HR to IT," says Bader, a German who joined the Latin American subsidiary in 2004. Bader held town meetings to address doubts and concerns.

"You can't just go out there and force it," he says. "Especially in Brazil--forget it! You have to do this with them and take the time to convince them, or you will fail."

Stephanie Overby is regular contributor to CIO.com's IT Outsourcing section.

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This story, "Adidas Heads to the Cloud to Control IT Spending" was originally published by CIO.

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