MagicOrange has been appointed to assist SPAR on their IT Financial Management journey

MagicOrange is proud to announce their first venture into the competitive food retail market. SPAR SA, one of the largest JSE-listed retailers in the country, has selected the renowned financial management solutions company to introduce end-to-end IT Financial Management (ITFM) to optimise costs at their Central Office, distribution centers and stores.

SPAR provides fresh produce and high-quality merchandise to a network of independent retailers, in both local and international territories. Their six locally based distribution centers are located in four main territories and supply the 850 stores nationwide on a voluntary basis.

Due to global disruptions in the world economy, the SA retail industry has been impacted by changing consumer behaviour such as the rapid growth of online shopping, supply chain disruptions, the worsening economic climate and growing unemployment. People have less money to spend which puts pressure on the bottom line.

According to PwC’s South African Economic Outlook 2022, global economic growth could decline and put pressure on local producer and consumer prices. According to the report, “Around 10% of the country’s wheat consumption is usually imported from Ukraine and Russia - exposing the South African market to supply shortages and 15-year high global wheat prices”. Fuel prices and interest rates are also likely to increase even further.

SPAR, despite being among the top five food retailers in the country, is not immune to these challenges. The organisation therefore decided to further optimise their costs going forward. This required a standardised approach to cost recovery, resulting in transparency and a thorough understanding of total IT costs which could be shared with their internal customers, including distribution centers and stores.

“We need to ensure full visibility into our true costs, so that we can jointly optimise individual operations as well as the running of the Group itself,” says Greg Hay, Group Technology IT Executive at SPAR SA. “In today’s volatile world, businesses must manage their costs, and we believe that MagicOrange is the tool to help us achieve this.”

The Gartner-recognised MagicOrange platform is becoming the ITFM and cost transparency tool of choice by customers across industries and geographies. It delivers real value by enabling organisations to understand total cost of ownership (TCO) as well as the relative profitability of its services and products. All of this provides actionable insights that drive business transformation and future growth.

“You can only manage what you can understand and measure,” says Blake Davidson, Head of Customer Success at MagicOrange. “Our platform assists customers through their ITFM and cost transparency journeys by helping to drive profitability and unlock value. We salute SPAR’s foresight in investing in a progressive technology solution to secure their ongoing future success in this competitive industry.”

“We are delighted that SPAR chose our platform to drive transparency and simplicity into its costing processes,” notes David Harding, Group CEO at MagicOrange. “This marks our first foray into the food retail sector, with its enormous need for effective cost management and profitability. We are confident that this win will mark the start of our penetration into this important vertical. In addition, securing business with a large client that operates in several territories promises to extend our international footprint.”

MagicOrange has now been successfully implemented in a number of different markets, from finance and mining to local government and health, and has expanded rapidly into a number of new global territories over the past few years.