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Entertainment UK
Entertainment UK - Past, Present and Future Vision
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The music, video, CD and DVD entertainment market is set to become one of the fastest growing UK retail markets in the coming years. The surge in growth is being driven by shifting demographic and social trends -- more people are living alone, more people are becoming familiar with new technologies and as a result more money is spent on entertainment products. |
Entertainment UK (EUK), as one of the largest wholesalers and distributors of these products with a significant share of the UK market, is looking forward to the predicted growth surge with some anticipation. However, the company also recognises that as well as increased opportunities, market growth also means increased competition.
That is why it turned to MicroStrategy to strengthen relationships with one of its existing customers, one of the country's largest supermarket chains. After using MicroStrategy technology for several years, EUK knew that further use of its business intelligence platform could not only provide its customer with the information it needed to take advantage of the shifting demographics and social trends, but also could benefit its suppliers too.
With this in mind, EUK took the groundbreaking decision to leverage the MicroStrategy Business Intelligence PlatformT to open up its supply chain downstream to the supermarket chain and upstream to its suppliers.
Richard Driver, EUK's Business Information Manager, explains: "The MicroStrategy platform has brought us some very significant benefits. Our suppliers can see what is happening in the real world and this is helping them more effectively manage their production and manufacturing processes, resulting in improved terms for us. With the technology, we're able to optimise our entertainment offerings and track product sales by location. This enables us to improve our sales strategies thereby strengthening customer relationships"
Building on a Solid Foundation
The move to implement the MicroStrategy Business Intelligence Platform began in 2002. EUK's suppliers knew how many units they had shipped to the distributor, but they had no idea which retailers they had gone to. Downstream, EUK's supermarket chain knew only that product was going through regional warehouses into stores, but did not have much idea about how much was going where or when. Furthermore, the suppliers had little insight about the speed and quantity of sales while the supermarket wasn't clear about when it might run out of stock. EUK decided to act.
The company had already been using MicroStrategy's software for more than five years to perform in-depth analyses about product sales, stock movement, cost and revenues. When the decision was taken to make this supply chain information more widely available, it was a natural step to leverage its existing technology base and expertise to keep costs down and ensure speedy provisioning. Because of its previous experience of MicroStrategy, EUK knew it could perform the tasks in mind -- the database that was going to drive the extranet was already being used internally.
Driver points out: "MicroStrategy is the most industrial-strength business intelligence platform in that you can do pretty much anything that you want to with it." Another key factor in EUK's decision-making process was the fact that MicroStrategy's latest version of its business intelligence platform, MicroStrategy 7iT, was purely Web-based. Because of EUK's already established use of MicroStrategy, the company had gradually been migrating from client server architecture with a relatively small number of users, to a mixed client server model and an increasing number of Web browser users.
The company set about extending the view of the supply chain view by building extranets -- at its own expense -- to the supermarket chain and its six main suppliers. A MicroStrategy Web ServerT was positioned in a DMZ (Demilitarised Zone) with links through to the MicroStrategy Intelligence ServerT -- the heart of the system and an enterprise-class analytical server. EUK took advantage of MicroStrategy's provisioning of SSL (Secure Sockets Layer), which encrypts all Web traffic at the cell level, ensuring secure database connectivity. Because of the intuitive HTML-only nature of MicroStrategy's Web solution, incorporating it into the extranet and intranet was quick and straightforward.
Inspired "Madness"
Driver said: "Initially it might appear crazy that we did this at our own expense, but so far the benefits have been considerable and it has been a very powerful tool both for our suppliers and customer." The company supplies electronic point-of-sale (EPOS) data to its six suppliers from all customer sales, and as a result, suppliers are able to determine exactly where their product is selling, in what quantities and the speed of sales. In turn, this has enabled EUK's suppliers to improve their manufacturing and production processes, giving them the capability to anticipate and plan for future demand.
"Prior to this system, we were producing paper-based reports; however, thanks to MicroStrategy, suppliers have direct access to information about the top line sales of their products. The popularity among suppliers is obvious -- they are producing 1,500 reports a month for themselves via the data we supply on the extranet. As a result, we are getting improved terms with our suppliers and early ROI calculations have revealed that this is translating into significant amounts of money for us," adds Driver.
Ease of Use and Cost Savings
The zero footprint of MicroStrategy's client software was considered to be a significant benefit as Driver explains: "One of the major strengths was that you don't have to install lots of software on client PCs and as such you don't have to do a lot of maintenance. It is zero-footprint because no client-side code is needed, and, providing you have set up the user on the database, all you need is a normal browser. It can be managed remotely and it is very robust too. If there are any problems you just reboot the server and it is up and running again, shrinking the cost of supporting the end user to almost nothing."
The lower total cost of ownership was an important consideration for the downstream supply chain initiative, as EUK employees were going to help the customer manage its entertainment products by providing pipeline and sales data. As such there would be lots of data analysis and lots of users accessing the Business Intelligence platform.
"Our customer was not able to manage its entertainment offering so that is now being done by our people in consultation with them. As well as generating top-level pipeline information, which helps establish what is selling where, our people also provide additional information such as chart information about top-selling music CDs and electronic games. This goes beyond the pure sales stuff and helps our customer to marry up its own sales against national trends and reveals whether certain products are favoured in certain areas," explains Driver.
Supply Chain Rewards
"Our customer has really taken to it. At first it only had one or two users, but the number is growing all the time because the information people receive ranges from top line sales, to regional and even individual store sales, as well as individual product and group product sales. In fact, the customer is requesting more and more different types of data as benefits increase," Driver said.
Because the customer has been able to gain precise insight into sales patterns, it has been able to develop very targeted advertising and marketing strategies. For example, data analysis reveals that some products sell better in certain parts of the country than others. As a result it has been able to ensure that the right products are in the right stores at the right time. Regional and local advertising can now also be targeted to reflect actual sales, rather than wasting budget on attempting to sell products with a limited demand in a given area.
Suppliers do not receive the same level of detail about individual store sales, but they do not need it. Rather, the supply chain data they view reflects national and regional sales. For example, they can measure the sales effectiveness of a particular product at the national level and drill down to see whether there are any particular hot spots. This capability allows them to save significant costs by fine-tuning their manufacturing and production processes. Instead of over-producing or under-producing a product by one million units, they can predict demand and manufacture product according to actual rather than anticipated demand.
EUK Rewards
The MicroStrategy Web browser functionality allows EUK to respond to these requests with ease. EUK is using the three available versions of MicroStrategy Web -- Web Professional, Web Analyst and Web Reporter -- in order to produce a range and wealth of reports and analysis. This ranges from top-level enterprise information, to granular level customer information about the sales of a particular product -- from summary information to detailed transaction level information.
"EUK's end users are doing a lot of ad hoc reporting because this is a fast-moving business in terms of comparing year-on-year and quarter-on-quarter sales for products," adds Driver. MicroStrategy's browser functionality and easy-to-use interface lets suppliers and customers build and design their own reports, while the OLAP (Online Analytical Processing) capability allows them to analyse the data. The XML architecture also enables the formatting of reports in a style best suited to them.
Driver is keen to point out that the project was entirely business driven. "If it was an IT driven project it would have died out -- everyone is suspicious of IT," he said. "At the end of the day, we wanted to improve our relationships and providing information was crucial to this. But what began as a trial is rapidly becoming a business standard. If we pulled it now, users certainly would not go quietly."
EUK currently has 200 people using the MicroStrategy platform but, as Driver points out, the number will increase as more customers come on board. "The MicroStrategy Business Intelligence Platform is flexible and can scale to a large and diverse user population, and that is one of reasons we chose it. The technology has certainly been a differentiator for us and we plan to expand its usage by bringing in more customers when they are ready."
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Entertainment UK needed to broaden its MicroStrategy BI platform to provide more customer and sales information to its supply chain.
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Central to Entertainment UK's MicroStrategy-based system is the MicroStrategy Intelligence Server. It stores information about database tables from the company's data warehouse in metadata format. Using a highly-tuned SQL engine (designed to work with any database) report requests are translated and an "Intelligent Cube" is populated with data to enable high-speed analysis. The Intelligent Cube has been designed to allow users to create and use cubes of information from a Web browser, without the need for IT involvement or the need to query the underlying relational database management system. The MicroStrategy Intelligence Server also maintains a consistent view of data by providing a single data dictionary, as well as providing built-in failover support.
EUK's internal users leverage the value of the MicroStrategy platform to generate a wide range of reports, and investigate data patterns using techniques ranging from ad hoc query and investigative analysis, to statistical analysis and data mining. For EUK suppliers and customers the full range of query, reporting and analysis functionality is provided via a HTML thin client, and advanced caching techniques eliminate redundant processing. Because different forms of analysis also require different distribution of computing resources, a self-tuning architecture eliminates bottlenecks by dynamically allocating resources away from overloaded components.
Furthermore, EUK has taken advantage of the MicroStrategy Narrowcast Server to deliver emails and SMS messages direct to PDAs and mobile phones, detailing monthly, weekly and daily sales figures to its directors.
"It went down a storm," said Richard Driver, EUK's Business Information Manager, adding, "The MicroStrategy platform is the most complete product compared to what else is available. Management is also very straightforward. You have two machines to look after, the Intelligence Server and the Web Server. It's easy to set up, it's easy to keep going and we haven't looked back." |
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