Microsoft BizTalk ServerCustomer Solution Case Study

HDS Retail North America Streamlines Financial Operations with BizTalk Server2006 R2

OverviewCountry or Region: CanadaIndustry: Retail

Customer ProfileHDS RNA is the North American retail subsidiary for Lagardère Services and operates prominent retail banners like Relay, USA Today, and Virgin Books & Entertainment.

Business SituationWith high profile brands such as Relay, USA Today, and Virgin Books & Entertainment, the company sought to improve its supply chain and procurement processes.

SolutionHDS Retail North America deployed a systems integration solution based on Microsoft BizTalk Server 2006 R2 to create an automated and centralized supply chain process.

Benefits Enhanced level of automation Simplified management Foundation for future growth

“We’re looking to build on the BizTalk platform to drive a significant business advantage. It will definitely help us provide a better point of service and deliver more consistency in responding to our vendor base.”

Vadim Motlik, CFO and CAO at HDS Retail North America

HDS RNA is the North American retail subsidiary for Lagardère Services and operates prominent retail banners like Relay, USA Today, and Virgin Books & Entertainment. With high profile brands such as Relay, USA Today, and Virgin Books & Entertainment, the company sought to improve its supply chain and procurement processes. HDS Retail North America deployed a systems integration solution based on Microsoft BizTalk Server 2006 R2 to create a centralized standardize infrastructure, improve efficiencies and streamline IT operations. Today, the retail giant is benefiting from more consolidated, synchronized and automated systems, which has helped boost overall operational efficiency.

SituationIf you’ve ever bought something from a store located in selected airports in the U.S. or any major airport in Canada, chances are you were visiting a retail outlet owned by HDS Retail North America (HDS RNA). With high profile brands such as Relay, USA Today, and Virgin Books & Entertainment, the company’s brands and concepts focus on delivering a strong travel retail experience for customers. HDS RNA is the North American retail subsidiary of Lagardère Services, the world’s largest culture and entertainment retailer with over 3,600 stores in 19 countries covering four continents. Lagardère Services generates US$5.5 billion in sales, with over 3,000 employees.

As a large organization, ensuring a smooth and efficient procurement cycle is a key challenge. The product range is large and includes anything from news and gifts, to specialty retail. HDS RNA needed to reduce integration complexity within its core internal systems, including its accounting, inventory and merchandise systems. The previous IT environment couldn’t scale to provide HDS RNA the flexibility needed to ensure the supply chain was meeting business needs. HDS RNA needed a more effective method of automating its manual-based processes; with the bulk of the company’s procurement cycle activities happening at the store level, there was a major opportunity to improve visibility and efficiencies in core supply chain processes.

Staff previously entered invoice and purchasing data manually, which had the potential to create data accuracy and duplication errors. With most procurement cycle activities happening at the store level,

and with very little automation, there was a major opportunity to improve visibility and efficiencies in core supply chain processes. The company determined that adopting a more centralized supply chain data management environment would be mission-critical moving forward.

“The challenge was dealing with paper, which really slowed down our processes. We had also gotten to a point where our EDI engine was getting old and needed to be replaced. Our customers demand the most up-to-date information and lifestyle products and we couldn't sustain the current procurement process, either from a business or technology standpoint,” says Vadim Motlik, CFO and CAO at HDS RNA. “We have a really diverse product line, from magazines, gifts, souvenirs and apparel. A lot of our product line comes from very diverse manufacturers and vendors and we needed stronger electronic management of our procurement processes to provide better service to our vendors.”

SolutionTo simplify the process of communicating with approximately 350 suppliers, HDS RNA determined that upgrading its existing IT infrastructure would help facilitate more automated transactions and enable the transfer of information, such as purchase orders, to suppliers via the Internet.

After reviewing various options, HDS RNA worked with Microsoft® Gold Certified Partner QLogitek, to develop a new Enterprise Service Bus (ESB) platform based on Microsoft® BizTalk Server 2006 R2. HDS RNA deployed BizTalk Server 2006 R2 to

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help create a centralized standardize infrastructure, improve efficiencies and streamline IT operations.

HDS RNA operates within a diverse IT environment and worked with QLogitek to ensure that the BizTalk platform would be integrated with its existing environment and QLogitek’s Software-as-a-Service (SaaS) Hosted EDI System and Supplier Order Management System (SOMS). These cloud computing systems ensured more rapid and effective supply chain automation and trading partner integration.

“HDS RNA is using QLogitek’s SaaS and BizTalk Server to give staff more real-time access to accurate, up-to-date data. The platform is designed to help orchestrate and control the overall business process flow for B2B-EDI collaboration with a vast and disparate trading partner community,” says Isa Qureshi, Executive Vice President and Chief Operating Officer at QLogitek.

The company recently migrated to Microsoft® BizTalk Server 2009 to extend its IT capabilities and is now using BizTalk as part of a larger Microsoft-based infrastructure, including Windows Server® 2008 R2, SQL Server™ 2008 R2 and Windows 7. The supply chain automation solution involves a number of key HDS RNA internal systems and includes collaborating with trading partners working to fully automate the business process from end-to-end. This includes a business rules engine for data and content validation of supplier invoices.

“We were really impressed with the ability to organize the rules to deliver more timely,

complete and accurate data from suppliers. It makes a whole lot of sense and helps us create a truly connected business,” says Mario Bartolozzi, Vice President of Information Technology at HDS RNA.

BenefitsWith BizTalk in place, HDS RNA is realizing a host of benefits. The transition increased transaction-processing speed by more than 80 per cent, simplified integration with other systems, and added flexibility for future development.

“BizTalk is viewed as the strategic element to our core infrastructure allowing us to simplify integration and transaction processing. Using BizTalk helped us migrate from an environment that had become unsustainable and was costing us a fair amount of money to run,” says Bartolozzi.

Enhanced level of automationThe travel retail industry is a competitive one, and moving away from using manual processes for purchase orders and invoicing with suppliers helps the company be more productive and cost-efficient. The tighter integration with HDS RNA’s financialERP system for invoice processing has led to more consolidated, synchronized, and automated systems, which helps boost operational efficiency.

“We’re now using the BizTalk platform to minimize our manual process and manage the vendor invoicing processes more effectively,” says Motlik.

Simplified managementThe size of HDS RNA’s operations and breadth of its product offering requires the

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company to deal with over 350 suppliers. The company is taking advantage of the BizTalk platform to eliminate paper-based processes to communicate more effectively with suppliers electronically – facilitating a timelier and efficient supply chain.

“Having a single enterprise architecture makes life easier for staff. We’ve been able to streamline and improve the accuracy of the payment process, which makes my people more efficient. I don't need as many specialized people – they can work across the infrastructure versus working in silos around products, which is great from a productivity perspective,” says Bartolozzi.

“This fully integrated system ensures that all data is routed in real time and reduces integration complexity throughout the entire supply chain. Suppliers have a more flexible interface and HDS RNA is also using the platform for greater visibility, better control and significant efficiency improvements in its retail supply chain operation,” adds Qureshi.

Foundation for future growthToday, HDS RNA has a more flexible platform to further develop its business-to-business requirements. As a result, the company can deliver more seamless trading partner integration services through QLogitek’s proprietary supply chain product suite in conjunction with the Microsoft BizTalk Server platform.

Currently, the company is working closely with its vendors to ensure stronger compliance with the new system moving forward. Its overall goal is to deliver an enhanced travel retail experience for

customers; improving the supply chain and procurement processes using BizTalk is designed to be a key component in the process, notes Motlik.

“We’re looking to build on the BizTalk platform to drive a significant business advantage. Our vendors are pleased with the new system and are working with us to adapt to the new automated system as we speak. It will definitely help us increase the visibility into our supply chain, provide a better point of service and deliver more consistency in responding to our vendor base,” says Bartolozzi.

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Microsoft Server Product PortfolioFor more information about the Microsoft server product portfolio, go to:www.microsoft.com/servers/default.mspx

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about QLogitek products and services, visit the website at: www.qlogitek.com

For more information about HDS Retail North America (HDS RNA) products and services, visit the website at: www.hdsrna.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published October 2010

Software and Services Microsoft BizTalk Server 2006 R2

Partner QLogitek