Indigo Books & Music Inc.
Indigo Improves Supplier Relationships Using Electronic Data Interchange to Automate Purchase Orders and Invoicing
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Company Overview
Indigo Books & Music Inc. is a Canadian company committed to satisfying the booklover. The retail chain has 260 locations across Canada, and a major Web presence through one of Canada’s leading online shopping destinations, www.chapters.indigo.ca, which offers a choice of more than one million products including books, CDs, DVDs, gifts, jewellery and more. Currently, the Internet portion of Indigo’s business, which includes in-store kiosk terminals and the Web site, is key to the company’s performance. In mid-2001, Indigo merged with Chapters Inc., and following the merger, the number one priority for the Internet side of the business was to reduce overall costs.
Business Challenge
As part of its online and retail operations, Indigo deals with suppliers worldwide to obtain the wide range of products it offers to customers. “Suppliers are critical to the success of our business,” said Doug Caldwell, Chief Technology Officer, Indigo Books & Music Inc. “We clearly recognized a need to improve the process of dealing with our suppliers and to automate routine transactions.”
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Solution
To simplify the process of communicating with suppliers, Indigo recognized that it needed to upgrade its existing solution to facilitate transactions using Electronic Data Interchange (EDI), which would enable the transfer of information, such as purchase orders, to suppliers via the Internet.
The Indigo team reviewed a number of offerings, including traditional EDI vendors and those that offered a specific EDI translator. Indigo decided that it needed a product that would be able to handle more than just its immediate EDI needs. The company selected BizTalk 2002 because it could provide the EDI capabilities Indigo required, as well as the ability to scale out to meet the company’s future need for enterprise application integration (EAI). Using XML, SOAP and other core Internet transports and protocols, BizTalk Server unites EAI, B2B and business process management technology in a single product to allow companies to easily orchestrate Web services and rapidly build dynamic business processes that span applications, platforms and businesses.
In offering its suppliers the convenience of moving business processes online, Indigo needed to ensure that the system would be reliable and offer a high level of performance. BizTalk was easily integrated into the company’s existing IT infrastructure to create a truly connected business. As part of Indigo’s larger Microsoft-based infrastructure, including Windows® 2000 Server Standard Edition operating system and SQL Server™ 2000 Enterprise Edition, BizTalk fulfilled the company’s needs.
“We now are using BizTalk to facilitate connections with more than 160 suppliers to transfer critical information such as purchase orders, acknowledgments, shipping notification and invoices,” says Caldwell.
Business Benefits
Following the implementation of BizTalk 2002, Indigo has been able to streamline operations and improve performance and reliability, while creating stronger relationships with suppliers.
Streamlining Operations: Generating Cost Savings and Efficiencies
The size of Indigo’s operations and breadth of its product offering requires the company to deal with more than 160 suppliers. Prior to implementing BizTalk 2002, Indigo was still using manual processes for purchase orders and invoicing with the majority of suppliers. In fact, Indigo’s existing technology solution was used by only 26 of its suppliers, with transaction processing taking a total of eight to ten hours. With BizTalk 2002, Indigo’s ability to handle each order quickly and efficiently has made a significant impact on the bottom line. Furthermore, this implementation of Microsoft-based technology has provided Indigo with the basis for forming highly responsive relationships with suppliers, which is critical to the ongoing success of Indigo’s business.
“Since rolling out BizTalk, we have been able to streamline the process of dealing with suppliers,” says Caldwell. “We’ve nearly eliminated manual processes, with 90 per cent of our purchase orders being sent using EDI. Instead of taking eight to ten hours to process transactions, we can process them in about three to five minutes. This has created significant efficiencies and cost savings within the organization when dealing with our suppliers.”
Performance and Reliability
Supplier relationships are key to Indigo’s ongoing success and its ability to provide customers with a consistent and positive shopping experience. Through the use of Microsoft-based technology, Indigo has been able to significantly improve the overall performance and reliability of its technology infrastructure.
With BizTalk, Indigo has gained the ability to quickly communicate with suppliers. The highly reliable system can be trusted to complete transactions in a timely manner, and handle a high volume of critical business information. Ultimately, this means peace of mind for Indigo and its suppliers.
“The product has been incredibly reliable,” says Caldwell. ”We haven’t had any downtime with it at all and it’s 120 times faster than our previous platform. The end result is that we have a high level of buy-in from our suppliers for this electronic means of doing business and we are able to get products into our stores much more quickly as we aren’t waiting days to send or receive critical information.”
With the Microsoft-based platform, Indigo has created a fully integrated IT environment, including clustering and fault tolerance. 24x7 monitoring capabilities of BizTalk provide Indigo with peace of mind. If an issue occurs, the system automatically sends out alerts, so Indigo's IT team can resolve it instantly at any time during the day or night. Furthermore, the combination of BizTalk and SQL Server have significantly increased reliability as the company has been able to create a powerful cluster, resulting in greater protection against failures of these mission-critical systems.
Looking Ahead
As Indigo continues to grow and diversifies its product offering, the company will be adding new suppliers and BizTalk will enable online communication with them, thereby driving business, ensuring a consistent customer experience and continuing to build strong working relationships with their stakeholders.
For More Information
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