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North Pole Confidential: Seeking the Mother of All ERP Systems

As our exclusive look at Santa's RFP reveals, St. Nick's legendary customer service and logistical needs are pushing vendors to the brink as they bid to replace his centuries-old systems. But who can say "no deal" to Santa?

December 20, 2007 — CIO — You think you have enterprise software headaches? Trying being Santa Claus.

CIO recently obtained a copy of an RFP (request for proposal) that Claus and his elfin management team distributed to the world's top enterprise application vendors in 2007. The RFP contains never-before-seen information that details the scope of Claus's worldwide operations and his IT needs.

The proposal process was supposed to be completed by the end of last February and the system implementation started in April, which would have provided enough time to get everything ready for this Christmas season.

But bad news, kids: So far, leading enterprise application vendors have been overwhelmed by the enormity of Claus's needs, and the process has dragged on without resolution. "Every requirement, every price consideration with [Claus] is just unheard of," says an executive at one of the ERP vendors, who requested anonymity due to the sensitivity of the ongoing negotiations and the fact that he didn't want to get coal in his stocking. "We're having to rewrite our SLAs [service-level agreements] over and over. This is out of control!"

Analysts say that Claus's operations are still using paper-based manual processes for inventory control, CRM, procurement, distribution, payroll and forecasting. "He doesn't even have a fax number," reports one exasperated vendor rep, who also requested anonymity. (Calls to Claus's media relations department weren't returned.)

Mr. Claus seeks a fully integrated enterprise suite of applications, including ERP, CRM and SCM modules, for The North Pole operations team and its suppliers and retailing partners. The logistical and technological requirements are straight out of a CIO's nightmare. Just a few of Claus's extreme system requirements taken from the RFP:

Does the system have demand planning capability that receives and automatically processes all customer requests (Christmas wish lists via postal mail, e-mail, online forms, text messages and Facebook FunWall posts) of the 667 million children eligible to receive Christmas gifts?

Does the proposed software track with 100 percent accuracy the location-based customer information (street address, city/town, state, ZIP code) and automatically update any address, age and/or clothing-size-based changes to each customer's record?

Does the proposed system connect to a searchable data warehouse that stores the 10+ gift requests that those 667 million children make each year?

Indicate whether the proposed software can track children's temperaments (naughty vs. nice) on a 24/7/365 basis and link that back into the demand management application?

Does the proposed system seamlessly enable back-end communications (receiving, fulfillment, shipping, invoicing, returns) with the enterprise systems of the more than 1,000 toy, clothing and consumer electronics manufacturers, every single retailing business (from retail chains to mom-and-pop stores) that stocks and sells Christmas presents? How about the major coal-mining companies?