IBM and eFuture Information Technology Inc. announced the launch of a Software-as-a-Service (SaaS) Solution for the retail distribution industry in China. The two companies have successfully completed the deployment of the solution at select Beijing Wangfujing Department Store Group (“Wangfujing Group”) stores in Beijing, one of the largest retail groups in China.

This initiative has brought 2000 of Wangfujing Group’s suppliers onto the platform, allowing them to exchange business information, arrange payments online and access purchase orders, returns, payment status, inventory levels and analysis of sales data. When the system is fully operational throughout the Group’s stores in 17 cities across China by the end of 2009, the Group will be able to share the supply chain information real time with 20,000 suppliers.

“The ability to manage an efficient supply chain is a prerequisite for success in the retail industry,” said Mr. Changxin Liu, Director of IT Department/President Assistance, Wangfujing Group. “Wangfujing Group now serves 10 million customers per day, and we believe the new supply chain system can enhance our Group’s leadership in the China retail market.”

China’s retail market has been experiencing exponential growth in the last 20 years, and is forecasted to reach US$1.4 trillion by 2010 to become the world’s second largest market. However, practices inherited from years ago — such as manual procurement, manual verification, paper-based statements and months-long settlement cycles — can no longer meet the needs of the new era and the rapid market changes.

In the new economy, retailers are challenged with the demands of managing inventories more closely, increasing supply chain efficiencies, increasing labor productivity and controlling costs. The new SaaS Solution addresses all of these needs, and provides an effective and scalable solution for retailers to manage change in a dynamic environment.

The IBM and eFuture SaaS Solution is delivered through the Web to the authorized suppliers of the retail businesses. With just an Internet-connected terminal, an authorized supplier can log onto the system with designated username and password to handle all their business transactions from order processing to settlement, and monitor the transactions. Meanwhile, retailers can also monitor the entire process including orders, delivery, inventory and payment real time and in a completely transparent and automated manner.

IBM and eFuture, a leader in China’s supply chain management for the distribution sector, have started their collaboration since 2005 to develop software for China’s retail industry. IBM integrated its SaaS infrastructure platform, designed and developed by IBM China Research Lab, with eFuture’s industry solutions. The end-to-end SaaS Solution, running on WebSphere Application Server and DB2 database, is based on IBM’s advanced SOA technology. The solution covers supply chain execution, task tracking and performance measurement. IBM is also responsible for the post-launch operation and maintenance service.

“SaaS is one of the fastest growing segments of the IT industry because it provides companies of all sizes with access to the latest, innovative supply chain solutions delivered remotely via a subscription model,” said Mr. Adam Yan, eFuture’s chairman and chief executive officer. “Our retail software and industry expertise has been taken to the next level following our partnership with IBM’s cutting-edge technologies.”

The SaaS solution helps retailers and their suppliers better synchronize and share information and analyze business data. This will greatly improve the productivity, shorten the credit cycle, reduce risks and facilitate the growth of both demand and supply sides of the businesses. All they need to do is to pay service fees on a monthly basis, which is as convenient as paying their water and electricity bills. It can help retailers reduce its investment in IT systems which in turn will help China’s distribution sector combat the current financial crisis. In addition, the automated and IT-based settlement system expedites cash collection to provide suppliers with more working capital and investment opportunities.

“This particular solution represents China’s first Software-as-a-Service application,” said Mr. David Cheng, vice president, General Business, IBM Greater China Group. “We selected eFuture to collaborate on our retail SaaS solution because we believe eFuture has the expertise and best practices in supply chain management software that, with IBM’s integrated infrastructure and platforms, will bring the greatest flexibility, competitive competence and return on investment for our customers.”