Home Depot has signed a major contract with SAP AG, the German software developer, to upgrade and refine its software system. According to several published reports, the Atlanta-based Home Depot wants to improve its inventory management, supply chain and merchandising capabilities with the new software.

A May 18 Reuters article said the deal was the largest contract for SAP in a year, and that it was a major win against Retek Inc., which had also bid on the installation. Retek was recently purchased by arch-rival Oracle Corp.

The Reuters report said Home Depot has spent $1 billion on new technology in the past three years, and plans to continue to invest at that rate. The installation of self-checkout kiosks have been one of the company's major IT investments, and more than 1,000 of its stores now have “do-it-yourself” checkout stands. During the last two years, Home Depot installed hundreds of thousands of new devices in its stores, including cordless scan guns and point-of-sale (POS) terminals, and completely revamped its store network and wireless capabilities.

In 2004, Home Depot implemented SAP's Financial Solutions, improving the company's analytical capabilities by streamlining its financial operations.

“By leveraging the expertise and global leadership of SAP, we will accelerate our ability to bring new solutions to our associates, and provide better choices and services for our customers,” said Bob DeRodes, Home Depot's executive vice president and CIO. “We want the best technology available to enhance our overall performance and provide a flexible platform to support expansion in a variety of new formats.”

Home Depot had 2004 sales of $73.1 billion. The company employs approximately 325,000 associates and has 1,913 stores in 50 states, Puerto Rico, Canada and Mexico.