4-page Case Study - Posted 8/23/2007

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RedTail Solutions

Supply Chain Service Provider Boosts Profits, Cuts Costs by Rapidly Onboarding Customers

RedTail Solutions, Inc. needed an efficient way to scale its business as it provided Electronic Data Interchange and other hosted electronic trading services to a growing number of suppliers. The Massachusetts-based company, which facilitates electronic relationships for hundreds of suppliers and their trading partners, considered several technology approaches to meet the needs of its expanding customer base. With the help of Microsoft® Gold Certified Partner Greystone Solutions, RedTail is consolidating all its offerings onto Microsoft BizTalk® Server 2006 using a service-oriented architecture. This solution offers RedTail both the scalability and flexibility it needs to offer new, cutting-edge services as the global supply chain market rapidly evolves. It also cuts in half the time it takes to onboard new suppliers, and reduces error processing costs by two-thirds.

Situation

Implementing new customers is really the most labor-intensive and expensive part of our business, and to cut that time in half is significant. It dramatically reduces our costs.  Patricia Meisner CEO RedTail Solutions

RedTail has 40 employees and works with several hundred mid-market suppliers. Using the RedTail Transaction Manager™ along with the company’s hosted suite of Web-based services, these suppliers electronically exchange purchase orders, invoices, shipping notices, and other information with more than 300 large customers in the retail, grocery, and industrial segments.

When RedTail first started, in 2000, it worked with several data transformation tools including a standard EDI translation software package and several internal automation tools to serve its customers. But as the company grew, it became harder to scale this technology to meet the needs of its customers.

First, handling different operations with separate software applications made it difficult to manage the company’s growing number of customer transactions. Second, RedTail technology specifically focused on EDI, failing to give RedTail a single platform from which to expand its customer offerings as demand grew for GDS, RFID, and other cutting-edge supply chain technologies. The multiple solutions made it difficult to integrate and automate RedTail’s own business processes. Specifically, the onboarding of new suppliers, resolving transaction errors and other customer issues, and invoicing customers for the services used presented challenges. 

As RedTail grew, executives realized they needed a single, unified-messaging environment that could easily scale upward to handle its growing volume of customer transactions. In addition, a central development environment would make it easier to quickly add new services in response to customer demand.

“Trying to cobble together the functionality we needed to drive our internal operations and proprietary algorithms only gets you so far in terms of scalability,” says Patricia Meisner, CEO of RedTail. “We needed an application that was going to allow us to bring many more customers on at a rapid rate.”

Solution

RedTail considered a few standard EDI translation packages, but none offered a unified-messaging environment that could scale to meet the needs of its growing business. Then RedTail found Microsoft® BizTalk® Server, which it chose because of the single operating environment it offered, its ability to scale, and its capacity to reduce costs by integrating and automating processes the company had been handling manually.

[SOA] basically gives us a lot more flexibility in coupling and decoupling applications when we need to so we can quickly introduce new applications in the marketplace.  Patricia Meisner CEO RedTail Solutions

RedTail eventually decided to phase out its EDI software package and put its EDI functionality entirely under the BizTalk umbrella by adopting Microsoft BizTalk Server 2006 as a single messaging environment to handle all of its needs. In January 2007, the company began working with Greystone Solutions, a Microsoft Gold Certified Partner, to move a percentage of its customers to BizTalk Server 2006. The company is planning to move all of its customers to this new solution by the end of 2007.

“The enhanced EDI capabilities of BizTalk 2006 R2 made it the obvious selection to support the architectural design of this project,” says Michael Litchfield, Greystone Principal Consultant and Microsoft Virtual Technical Specialist. 

Using the Business Activity Monitoring (BAM) component of BizTalk Server, RedTail employees will be able to easily keep track of data moving through the system, monitoring all of these transactions from within a single portal. Employees use BAM to track both the status and content of messages, so they can quickly resolve customer issues, such as when a supplier says it didn’t receive a purchase order or its trading partner says it didn’t receive an invoice. 

Using built-in EDI and Applicability Statement 2 (AS2) capabilities, RedTail will be able to reduce the lag times that occur as transactions are sent back and forth between suppliers and their trading partners. With the Trading Partner Management (TPM) component, RedTail will be able to maintain all information about trading relationships using a single user interface, enabling employees to add new customers more quickly and allowing customers to use self-service tools to complete some of the setup themselves.

“BizTalk gives us all of the base functionality on one, common platform as well as the flexibility to add anything else on top of that, whether it’s new services or additional requirements from customers and their trading partners,” says Sean Kelley, Vice President of Operations and Technical Support for RedTail.

As it deploys BizTalk Server 2006, RedTail, with assistance from Greystone Solutions, is basing its design on a service-oriented architecture (SOA) that treats services as components that work together to accomplish specific processes for its customers. By basing its messaging solution on SOA, RedTail eliminates duplicate work by taking specific components that define the ways suppliers work with their trading partners and reusing these components as it onboards other customers. Using SOA as the basis of its solution also gives RedTail the flexibility to quickly add new services in response to customer demand.

“In the global supply chain space, new data standards are developing very rapidly,” Meisner says. “SOA allows us to adapt to these changes quickly, and deliver back to our customers. It basically gives us a lot more flexibility in coupling and decoupling applications when we need to so we can quickly introduce new applications in the marketplace.”

Benefits

With BizTalk Server at the core of its hosted service environment, RedTail is increasing revenue and reducing costs at the same time that it improves customer service. BizTalk Server also provides RedTail with greater flexibility and scalability, as the company adds new customers to the system and expands the business to offer new, cutting-edge services.

BizTalk gives us all of the base functionality on one, common platform as well as the flexibility to add anything else on top of that.  Sean Kelley Vice President of Operations and Technical Support RedTail Solutions

Increases Revenue

In the past, onboarding new suppliers was a difficult, tedious process. Each supplier had to tell RedTail whom it wanted to trade with and describe the exact parameters of working with each trading partner, so that RedTail could manually configure each trading arrangement, test it, and implement it. BizTalk Server 2006 automates much of this implementation process, so customers are able to use self-service tools to complete a portion of the setup themselves. “By taking advantage of the built-in BizTalk features and implementing a standardized process for onboarding customers, the onboard cycle times and staff power needed to support those customers were significantly reduced,” says Litchfield. 

These improvements are expected to cut in half the time it takes to onboard new customers, from an average of four to two weeks. “The faster we can implement customers, the faster they can start to generate revenue,” says Meisner. “So not only does it reduce our costs associated with implementation, but it also gets us to break even on a customer a month or two ahead of schedule. These savings are multiplied as the installed base grows.”

Reduces Costs

Automating a larger part of the customer implementation process also reduces labor costs. With the company’s old solution, the entire process of onboarding a customer had to be completed by experienced EDI specialists. Increased automation will make it possible for customer service representatives to coordinate most of the process; RedTail specialists will only be brought in to manage the most complex parts.

“Adding new customers is really the most labor-intensive and expensive part of our business, and to cut that time in half is significant,” Meisner says. “It dramatically reduces our costs.”

BizTalk Server will also create a 66 percent reduction in the labor required to resolve transaction errors and other customer issues. In the past, support staff had to search manually through a large number of files and folders to compile a transaction audit trail. With BizTalk Server 2006, support staff can easily obtain a complete record of the entire transaction from a single location, helping them to resolve customer issues far more rapidly.

“We’ll be able to reduce the number of full-time staff that handle error resolution from three to one, basically tripling our throughput with our current staff,” says Kelley.

Using the new solution, RedTail also cuts costs by integrating and automating more of its internal processes. For example, the company charges its customers by the number of transactions they complete each month. With a unified transaction system, RedTail can now more easily link this system to its accounting system, so it is able to completely automate its customer invoicing system.

“Right now, we have a semi-automated system where we automatically capture transactions, but then pass them manually into our billing system,” Meisner says. “With a few hundred customers, we can manage that. But with several thousand customers, it becomes a lot more labor-intensive. BizTalk really helps us to scale all aspects of the business.”

Improves Customer Service

By incorporating its EDI hosted services into the BizTalk Server solution, RedTail will be able to process transactions in near real time, significantly improving customer service. With EDI, messages are typically accumulated and then sent back and forth in batches. Depending on the transaction, the lag times this creates can be problematic.

For example, if a supplier is trading with a large car manufacturer that uses just-in-time manufacturing, it only has a small window to meet the automobile company’s demands for providing advance shipping notices. If the transaction doesn’t go through within the time allotted, the car manufacturer may cancel the order, reducing the supplier’s profits.

“The whole vision of RedTail is to provide complete supply chain visibility to our suppliers,” says Meisner. “By automating everything entirely on BizTalk, we’re truly offering real-time transactions, so our customers can better serve their trading partners.”

Provides Greater Scalability and Flexibility

The scalability BizTalk Server offers has made it possible for RedTail to rapidly add customers as demand grows for its services. In addition, with BizTalk Server, RedTail has moved beyond EDI and now provides its customers support for other emerging technologies including global data synchronization, which reduces data inaccuracies, and radio frequency identification, which suppliers use to track products and information as they move through the supply chain.

“The RedTail vision is not only to offer EDI, but also to have a platform on which we can build additional applications,” Meisner says. “The BizTalk solution supports all of that, as opposed to some of the big competitive packages that would have kept us squarely in the EDI world.”

Over the long run, RedTail executives predict BizTalk Server will be a key factor in helping the company stand apart from its competitors as it continues to provide an ever-higher level of service.

“We primarily looked at BizTalk as an internal, cost-saving, scalability move for RedTail,” says Kelley. “But we’ll also be able to use it to make our transactions happen more in real time, automate error processing, and increase customer self-service. With time, all of those things will increase our visibility in the market and differentiate us from the competition.”  

For More Information

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Greystone Solutions, Inc., is a technology and business consulting firm based in Boston, Massachusetts. A Microsoft Gold Certified Partner, Greystone is known for technical skill, solid partnerships, and reliable results, and is dedicated to helping organizations of all sizes integrate and process information to maximize business performance. For more information about Greystone Solutions, Inc. products and services, call (617) 832-9200 or visit the Web site at:
www.greystone.com

For more information about RedTail Solutions products and services, call (508) 983-1900 or visit the Web site at:
www.redtailsolutions.net

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Document published August 2007