Natuzzi: Collaborating on SAP and Enterprise Resource Planning for High Performance

Accenture’s ongoing High Performance Business research initiative has identified a number of trends that are influencing how consumer goods and services companies operate. The most significant is the emergence of “global-local” operating models that enable companies to penetrate new markets and tap the huge revenue potential of 1 billion new consumers in the developing world. In addition to optimizing their business models, consumer goods and services companies will need to respond to other emerging multi-polar world realities. Capital flows will be multidirectional. Natural resources and raw materials for many products will grow ever scarcer. Top talent will be harder to find and retain. Customers, with greater buying power than ever before, will demand new forms of engagement and satisfying experiences at every turn. These consumers will need to be segmented—and then reached—in new ways.

All these trends present significant challenges. They also represent the main growth drivers that will shape the future consumer goods and services landscape. Accenture is establishing a number of new services, specifically designed to help consumer goods and services clients profit from the fast-changing business and consumer environment. These new services, captured within Accenture’s new Consumer Goods industry service model, include offerings such as lean/agile operations, trade promotion management, distributor network management, consumer and supplier analytics, and digital marketing. The company anticipates that these (and other) services, delivered at scale, will position Accenture to lead the next wave of business transformation in the multi-polar world. Importantly, these services are also expected to contribute significantly to Accenture’s goal of generating $3 billion from consumer goods and services clients by 2015.

Breakthrough growth via new service areas, while critically important, will not be sufficient to drive the growth and margin improvements Accenture desires. For that reason, the company is simultaneously focused on strengthening the core management consulting, systems integration and outsourcing solutions upon which Accenture has built its reputation.

The research has also looked specifically at the factors influencing high performance among consumer goods and services companies. While the practices exhibited by high-performance businesses differ by industry segment, the research suggests that all consumer goods and services high performers are realistic about the pressures of today and optimistic about the opportunities of tomorrow. Accenture Sales and Marketing Transformation, Accenture Customer-Centric Supply Chain, Accenture Talent Planning and Management, and Accenture Global Operations are just a few of the solutions Accenture has recently industrialized to deliver value more quickly and more effectively to consumer goods and services clients.

Another is the Accenture Enterprise Resource Planning Transformation Solution. This solution—which helps businesses refine operating models, scale operations and drive down costs—is particularly appealing to more than half of Accenture clients who still operate locally or without the benefit of a robust, globally integrated technology platform.

While Natuzzi Group enjoyed an enviable market position and worldwide reputation for innovation, craftsmanship and style, its financial losses were mounting. Net sales had fallen by roughly 31 percent in the seven years since 2004. Competition from low-cost manufacturers in developing countries, higher prices of raw materials and unfavorable currency conditions all contributed to the financial declines. But, it was the recent worldwide economic downturn that had the greatest impact on sales and earnings.

In 2008, the company recognized that its future profitability and ongoing financial health would depend on its ability to restructure operations around a new business strategy. The success of these strategic guidelines rested on two fundamental pillars: a robust ERP system that could integrate Natuzzi Group’s global organization and the ability of the company’s workforce to use that system for optimal advantage.

When it came to replacing its aging system, Natuzzi selected SAP ECC (Enterprise Core Component) as the ERP system best suited to harmonize multiple information systems, provide a platform for a common way of working, and unify a diverse workforce that spanned Europe, the Americas, the Middle East and the Far East.

For help in designing and implementing the SAP system, Natuzzi turned to Accenture. Several factors influenced this decision, including Accenture’s deep industry insights, extensive experience, global delivery capabilities and market- leading SAP skills. As Pasquale Natuzzi, President and CEO, explained, Accenture’s collaborative approach was also important. “Accenture listened to us and really understood what we wanted and where we wanted to go. We knew they would work closely with us to minimize the complexity of the ERP solution and, at the same time, deliver a tailored solution that would pave the way for more efficient business processes.”

The prospect of working with Natuzzi was equally appealing to Accenture. For one thing, Natuzzi operated in the consumer goods and services Furnishing segment—a relatively small market segment for its fragmentation, but with great growth perspectives given the trends for global operating models and direct flagship retail operations.

Accenture and Natuzzi kicked off the SAP project in September 2007. Within just a few months, 200 end users from Natuzzi’s Italian business were managing finance and purchasing activities through the SAP solution. The team also rolled out SAP’s accounting and finance functionality to Natuzzi’s operations in Spain, the United States, Romania and China.

For Release 2—which covered core processes for the entire order cycle—Accenture and Natuzzi extended the SAP solution to include sales, distribution and production planning processes. By the end of 2009, 700 employees were using SAP to manage these common processes around the world. Natuzzi’s operations in China will complete the rollout of manufacturing capabilities in June 2010.

Successfully deploying the SAP system was a complex undertaking—and a major investment for Natuzzi. Given the economic climate, it was especially important that Natuzzi would be able to realize as much value as possible from its ERP investment.

As Pasquale Natuzzi, president and CEO, summed up: “Accenture proved itself during the SAP implementation. With its global footprint and experience of managing some of the world’s largest SAP deployments, we were confident that Accenture could also help us realize the full benefits of the ERP solution.”