KFC. Import substitution: migrating from Oracle JD Edwards to 1C:ERP
Client company
UNIREST LLC (formerly Yum! Restaurants)
Industry
food production
About the company
KFC’s nationwide chain in Russia consists of a parent company, which manages the entire franchise network and 80 company-owned restaurants. Franchisees operate more than 1,000 restaurants in total. In 2021, the company’s revenue was RUB 18.3 billion (≈ $183 million), with net profit of RUB 2.4 billion (≈ $24 million). Headcount (including branches): 2,000 employees
Base solution
1C:ERP Enterprise Management
Automated areas
- Treasury
- Statutory accounting
- Inventory management
- Banking operations
- IFRS
- Procurement
- Sales
- Integration with third-party systems (8 systems)
Base solution: 1C:ERP Enterprise Management 2.5 + 1C:Catering module
This was one of those projects that had to be implemented within 3 months because of sanctions. Oracle had left Russia, and the business feared losing access to its licenses.
The client was running Oracle JD Edwards plus 8 other systems in various areas: Axapta, BOSS-Kadrovik, R-Keeper, CrunchTime, En Docs, and others. The task was to move most of these systems into ERP and set up integration with the rest.
The project consisted of several workstreams:
- Financial accounting
- Tax accounting
- IFRS go-live
- Inventory management
- Treasury
Each workstream was a separate project.
Accounting: more than 20 employees. IFRS: 2 people. IFRS sits within the accounting department but is a separate functional area with its own specifics: each accountant keeps the books for their own area in both financial and management accounting.
Warehouse: each restaurant does its own purchasing and has a restaurant manager, so 80 x 2 = 160 users.
Treasury is also intertwined with accounting and management accounting, so the out-of-the-box 1C:ERP functionality did not fit. Customization was required on our side.
Each workstream also had many challenges of its own: an unfamiliar system with its own architecture, and radically different catalogs and interfaces. For example, in the accounting area, fixed assets, IFRS reporting, and the chart of accounts differed greatly from Russian practice. The client used a flat chart of accounts, unlike the standard 1C chart with its sub-accounts, analytical dimensions, and so on. Ours has about 100 accounts; flattened out, that becomes more than a thousand accounts! We had to map everything and explain it to users, so training stretched to 4 months.
The project was run using agile methods. For large projects like this, made up of multiple workstreams and sub-workstreams, we carry out end-to-end integration testing, do more thorough modeling, and perform code reviews. These practices help avoid many errors and problems in large projects.
Results of automation with 1C:ERP Enterprise Management 2.5
- Replaced an ERP system that had exited the market
- Reduced the number of IT systems from 8 to 4. As a result:
- Fewer errors in master data
- Lower license and maintenance costs for multiple systems
- Avoided the risks of foreign systems being blocked
- Gained more functionality than the previous foreign ERP system offered
- Moved inventory and quantity accounting from different systems into 1C:ERP