Expert Group needed a more efficient way to manage updates for the thousands of consumer electronics items it sells through its network of 180 franchise stores. For more than a decade, the company used an IBM AS/400 system with custom-developed software to manage everything from product specifications to corporate accounting. This system was not easy to use and was costly to extend to support new business processes. As Expert Group continued to grow, executives decided to replace the company’s aging technology. Working with Microsoft® Gold Certified Partner ReBuS, the company implemented Microsoft Dynamics® AX, along with Retail Chain Manager for Microsoft Dynamics AX. By using the new solution to improve supply-chain management and automate product management tasks, Expert Group has increased efficiency by 70 percent and improved the quality of the information it delivers to franchises.
|The workflows in Retail Chain Manager for Microsoft Dynamics AX have improved the speed, accuracy, and quality of our product management processes.|
|Gabri Martel, General Director, Expert Group|
Expert Group oversees management of a large chain of Netherlands-based retail stores that sell a wide range of consumer electronics goods and accessories. The company has grown from a small collection of stores to a thriving network of 180 retail locations.
Although each individual franchise manages its own inventory, employees at the company’s headquarters are responsible for calculating pricing and maintaining product specifications. Employees at the corporate office are also responsible for devising category management and product-mix strategies. The corporate office continuously updates and distributes this information to franchise personnel, enabling the stores to maximize margins and provide a consistent and satisfying customer experience.
For more than a decade, Expert Group relied on custom-developed software running on an IBM AS/400 mainframe to manage corporate accounting, track chain-wide inventory and sales data, and update product information. However, this system lacked the functionality to automate product management tasks, requiring purchasing staff to manually enter updates to pricing and product specifications. This caused substantial processing delays and frequently led to data-entry errors, which were then propagated in the system and passed on to the franchises. The addition of new stores, which coincided with the expansion of the company’s inventory mix, only compounded these problems.
In addition to inefficiencies caused by the need for double entry, Expert Group found that it was not cost effective to develop new functionality for its custom-built system. For example, the company estimated that creating an electronic data interchange interface to streamline transactions with suppliers would require at least two years of development work. “We just couldn’t wait that long,” says Gabri Martel, General Director of Expert Group. “Plus, we only had one person on staff who really knew how our old system worked and he was fast approaching retirement, so that amplified the risk of not making a change.”
To gain new functionality and reduce the cost and risk of running its operations on aging technology, the company decided it was time to replace its former system with a new enterprise resource planning (ERP) system.
Expert Group opted to implement Microsoft Dynamics® AX with Retail Chain Manager for Microsoft Dynamics AX, a fully integrated ERP solution tailored to meet the needs of retail operations. In addition to providing comprehensive accounting, financial analysis, and supply-chain automation functionality, the solution offers category management, price calculation tools, and straightforward integration with point-of-sale solutions. Expert Group worked with Microsoft® Gold Certified Partner ReBuS to implement the solution at its headquarters.
A Better Fit
In evaluating a new ERP system, Expert Group initially considered a retail solution from SAP. In fact, the SAP solution was the presumptive choice throughout the early stages of the company’s planning process. But as executives more closely compared SAP with Retail Chain Manager for Microsoft Dynamics AX, they decided that the solution from Microsoft was a better fit for the company’s immediate and long-term needs.
|With our Microsoft solution, we’re able to be much more ambitious about growth than we could before because we now have the tools and the flexibility to achieve the targets we set.|
|Gabri Martel, General Director, Expert Group|
One major factor in the decision was maintenance and development costs over time. In terms of modifying the solution to align with company initiatives or to meet changing business requirements, executives saw that the Microsoft® solution was the more cost-effective option. Says Bert Lubbers, Senior Project Manager for ReBuS, “From the company’s perspective, one big advantage is that the interface to connect the business system with the registers at all 180 of their stores is already built into the solution.”
In addition to a favorable cost comparison, Expert Group appreciated the ease of use of the solution and seamless integration with other Microsoft software and technologies, such as Microsoft Office Outlook® and Microsoft Office SharePoint® Server. In concert with its decision to deploy Microsoft Dynamics AX with Retail Chain Manager for Microsoft Dynamics AX, Expert Group opted to implement Office SharePoint Server and migrate from Lotus Notes to Microsoft Exchange Server. “After a long period of research and deliberation, we are embracing the value of standardizing our operations on the Microsoft platform based on the high degree of scalability it offers,” says Martel.
Supplier Contract and Product Management Workflows
Expert Group’s purchasing department has 10 staff members, which consist of category managers, buyers, and several employees dedicated to continuously updating product specifications, including maintaining current pricing. For the company to maximize profitability in its stores, these employees need to work together efficiently. Once a category manager defines the product mix, a purchasing agent can establish contracts with suppliers to obtain those products—pending review and approval of the contract terms. Employees can then adjust prices and product specifications obtained from suppliers in the company’s business system to complete the process.
Previously, purchasing staff relied almost exclusively on stand-alone spreadsheets and paper-based systems to transfer this information. By deploying workflows in the solution to automate this process, Expert Group has significantly reduced the amount of time required to obtain approvals on contracts, execute purchases, and complete updates in the product management subsystem. Moreover, the use of workflows has reduced errors caused by storing and transferring information outside of a centrally managed system. This means that the company is able to communicate more accurate product information to its stores. “The workflows in Retail Chain Manager for Microsoft Dynamics AX have improved the speed, accuracy, and quality of our product management processes,” says Martel.
Expert Group takes advantage of sophisticated category management tools in the solution to streamline its buying process, ensuring that its stores are carrying the right products at the right time. These tools give the company the flexibility to define assortments across a range of dimensions, including store location and season. In addition, the company uses these tools to track the performance of product categories, enabling its stores to increase sales volume and minimize inventory-holding costs. Furthermore, Expert Group takes advantage of the solution’s built-in category and supply-chain management functionality to monitor transaction history with its suppliers, gaining insight into which vendors offer the best value in terms of cost and overall reliability. “With these tools, we not only know what to buy but also the best sources to buy from,” says Martel.
Communication and Collaboration Framework
With help from ReBuS, Expert Group is pursuing an initiative to more closely connect all of its store locations to its central office by using Office SharePoint Server 2007. The goal is to provide all store employees with easy access to marketing updates, internal sales trends, industry news, and other important pieces of information through a portal. In addition, ReBuS is helping Expert Group link Office SharePoint Server 2007 with Office Outlook 2007 to enable employees to view business information from their e-mail client. In the long term, the company plans to extend access to Retail Chain Manager for Microsoft Dynamics AX to authorized personnel at each franchise by using Office SharePoint Server sites.
|By turning a process that was 80 percent manual into one that is now 90 percent automated, we’ve achieved a complete transformation in this area of our business.|
|Gabri Martel, General Director, Expert Group|
Expert Group has streamlined its purchasing and product management processes, and improved its capacity for communication with its stores. Moreover, by standardizing on the Microsoft solution platform, the company has significantly increased the scalability of its operations. Says Martel, “With our Microsoft solution, we’re able to be much more ambitious about growth than we could before because we now have the tools and the flexibility to achieve the targets we set.”
Increased Supply-Chain Efficiency by 70 Percent
By streamlining contract and product management tasks by using automated workflows, Expert Group has converted a manually driven process into one of the company’s most efficient functions. “By turning a process that was 80 percent manual into one that is now 90 percent automated, we’ve achieved a complete transformation in this area of our business,” says Martel. Because Expert Group can complete its purchasing and product update processes in less time, employees can focus more time on strategic business tasks, such as market analysis, category management, and seasonal planning.
Improved Communication with Franchises
Efficiencies gained in the area of supply-chain management and access to powerful analysis tools have helped Expert Group significantly improve the quality of the information it provides to its stores. This benefit is enhanced by the company’s communication and collaboration infrastructure. By deploying and linking Exchange Server 2007 and Office SharePoint Server 2007 alongside Retail Chain Manager for Microsoft Dynamics AX, Expert Group can now quickly and reliably distribute consolidated business information to its entire franchise network. “We’ve definitely improved the trust between the central office and our stores by delivering more accurate information and by opening up new channels of communication,” says Martel.
Greater Flexibility and Growth Potential
Expert Group has set an ambitious course, deploying several systems simultaneously, but this hasn’t stopped executives from looking ahead to the next major deployment. In a subsequent phase of the project, Expert Group is considering replacing its current point-of-sale system with Microsoft Dynamics Retail Management System. In addition, the company is evaluating an upgrade to Microsoft Dynamics AX 2009 in the near future to take advantage of its Role Centers and enhanced reporting functionality. Says Martel, “The Microsoft solution matches our needs now and gives us a stable platform that lets us scale out our operations at our own pace.”
Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems that your company already has implemented. By automating and streamlining financial, customer relationship, and supply chain processes, Microsoft Dynamics brings together people, processes, and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
For more information about Microsoft Dynamics, go to:
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