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Singapore online grocer RedMart uses cloud ERP to drive growth

Online retailer RedMart turned to cloud-based enterprise resource planning (ERP) when its existing system struggled to keep up with business growth

Singapore’s RedMart, has opted for Oracle enterprise resource planning (ERP) cloud to streamline its business processes, reduce IT costs and become more agile.

The online grocer’s e-commerce platform allows customers to buy groceries and household products online – whether it is fresh or frozen food, personal care, health and wellness or pet products online.

The online grocer's business has grown and its revenues have more than doubled each year since its launch in 2011. Starting with a presence in Singapore, it has entered the Hong Kong market and is looking to move into Indonesia.

“Being a startup, business priorities tend to change quickly to respond to the competitive needs of the market. Our systems need to be flexible to match up with our priorities,” said Jim Boland, head of finance at RedMart. “Technology is at the heart of our business, and we need to constantly strengthen it in order to grow.”

Previously, RedMart ran its operations with a legacy ERP system, but it could not keep up with the company’s growth. It was unable to produce reports to provide insights for decision-making, and lacked the flexibility required for the company’s fast-changing business priorities.

Now, RedMart is using the Oracle ERP cloud financial, supplier management and procurement systems on one platform, accessible by all departments.

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Cloud ERP growth in Asia Pacific

Business insights gleaned from transaction data allows management to make timely business decisions.

Oracle's cloud ERP platform enables RedMart to collaborate with suppliers, a move expected to give RedMart the ability to further reduce costs in the long term through better negotiation and compliance processes. Internally, RedMart’s operational and management teams can use social collaboration to increase productivity and employee engagement.

Cloud ERP adoption is a growing trend in the Asia-Pacific region, said Satya Devata, research director with Gartner, covering ERP and business applications.

“The investments in cloud ERP and software as a service (SaaS) are continuing to grow each year. Emerging markets like India and Indonesia will see the investments in cloud ERP grow from US$61m to $115m from 2016 to 2020. Matured markets like Australia and South Korea investments in cloud ERP would grow from US$166m to $280m from 2016 to 2020,” said Devata.

“Many vendors such as Oracle, Netsuite, SAP, QAD are focusing more on emerging Asean markets to take advantage of buoyant economic growth in the region.”

System trends by company size

The organisations who adopt cloud-based ERP tend to be the smaller and newer companies, said Devata. The larger organisations tend to adopt a hybrid strategy to reduce the footprint of on-premise ERP applications and are also likely to adopt more specialist systems such as human capital management (HCM), and travel & expense management cloud systems.

While cloud ERP has advantages, organisations need to be mindful of challenges, said Devata. To adopt cloud ERP, organisations may face data migration challenges, the inability to remove the customisations built in existing ERP systems and integration difficulties.

“While there are many benefits of cloud adoption, IT organisations need to fully understand the implications of SaaS/cloud ERP before making such decision,” cautioned Devata.

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