New enterprise resource planning (ERP) system, who dis?
Last year, Ulta Beauty concluded one of the largest IT initiatives in its history as it migrated its core business functions from its outdated ERP system to SAP S/4HANA.
Mike Maresca, Ulta’s chief technology and transformation officer, told IT Brew that the company made the decision to “rethink” its core systems after observing how omnichannel shopping, a strategy that unifies the shopping experience for consumers across various mediums, changed consumer behaviors and expectations.
“It was about aligning the technology with our overall vision at Ulta and that was really to be the destination and meet our guests where they’re at, whether it be online or in our stores,” Maresca, who joined Ulta in 2023, said.
To the salon! Ulta’s IT modernization journey, known internally as Project Strengthen, Optimize, Accelerate, and Renew (SOAR), kicked off in April 2021. The first phase of the project homed in on upgrading the company’s corporate functions. The next two portions of the transition focused on modernizing Ulta’s supply chain and “deploying inventory capabilities.” Together, the transformation allowed the beauty retailer to roll out a new inventory management platform to its stores, allowing Ulta associates to look up products and check inventory more efficiently, and automate processes such as invoice matching.
“This wasn’t necessarily just a shift in just upgrading technology, but it was really about eliminating those inefficiencies and manual workflows,” Maresca said.
On a 2021 quarterly call with investors, Ulta CFO Scott Settersten said that the cosmetics chain, which has more than 1,400 stores, would invest between $160 million and $180 million in the project.
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Project SOAR was positively received by employees when piloted in Connecticut stores, according to Maresca.
“I think the team actually broke out in applause,” he said. “It sounds kind of cheesy, but just the features they were asking for that [could help] them do their job more effectively and efficiently were there.”
The glow-up. By July 2024, Project SOAR was fully deployed across all of Ulta’s stores, and is already paying off for both the retailer and its customers.
Since deploying SOAR, Ulta has observed a “double-digit percent reduction” in manual processes, which Maresca said will allow for “thousands of hours” to be saved each year. The transformation also enabled the company to scale up to support an additional 270 stores.
“From a financial perspective, the platform really just positions us to support new categories and channels,” he said.
Maresca added that SOAR helped the company achieve an increase in its Net Promoter Score, which measures customer loyalty and satisfaction.
Overall, Maresca deemed Ulta’s execution of Project SOAR as a success. For companies looking to execute a similar overhaul, Maresca suggests doing so with a thoughtful plan and strategy in mind.
“Spend extra time on the front end so you don’t spend the extra time on the back end.”