Customer Solution Case Study
/ / Home Entertainment Buying Group Streamlines Business Processes and Communication
Overview
Country or Region:United States
Industry: Home Entertainment Retailing
Customer Profile
Home Theater Specialists of America(HTSA) is a buying group of 54 high-end audio/video retail businesses across the United Stateswith combined annual sales over U.S.$400 million.
Business Situation
Sales reporting, forecasting, and other business processes relied on cumbersome communication tools that failed to provide the growing association with needed functionality and information security.
Solution
HTSA deployed an innovative collaboration solution with role-based content and messaging capabilities, reporting templates, and wizard-based administration.
Benefits
Accelerated communication
Streamlined sales reporting
More accurate sales forecasts
Easier administration
Higher data security / “This communications tool provides excellent visibility into our business processes, and our retailers and vendors recognize its value.”
Leon SooHoo, Member of the Board of Directors, Home Theater Specialists of America
Home Theater Specialists of America (HTSA) is a buying group of 54 high-end audio/video retail businesses with combined annual sales over U.S.$400 million. As HTSA grew, traditional communication tools failed to provide needed functionality and security for business processes such as vendor sales reporting, forecasting, and technical support. HTSA deployed an innovative communication solution with role-based content and messaging capabilities based on Microsoft® collaboration technologies. Employees are assigned job roles that establish access privileges and define targeted content on a home page. Wizards streamline new site creation and administration and provide targeted communication according to company type and job role. Benefits of the new solution include faster, more accurate sales reporting and forecasting, higher information security, and new data analysis capabilities.
Situation
Home Theater Specialists of America (HTSA) is a prestigious group of 54 high-end audio/video retail businesses with combined annual sales over U.S.$400 million. HTSA negotiates buying agreements with 45 major manufacturers—Sharp, Mitsubishi, Marantz, and LG Electronics, among others—in which rebates and favorable terms are achieved when the buying group reaches aggregated sales volumes negotiated with each vendor. By banding together, these specialty retailers realize buying power comparable to national chains, enabling them to offer clients a unique combination of competitive prices and excellent service.
Reaching sales quotas requires cooperation and coordinated effort. Leon SooHoo, a member of the HTSA Board of Directors, is also CEO and President of Paradyme, an HTSA retail member with 50 employees based in Sacramento, California. He explains, “To achieve our common objectives and maintain customer satisfaction, we have to work together to sell and support our manufacturers’ products. Close communication and sharing best practices are critical to our success.”
As the association grew, it faced challenges in a number of specific business processes.
Financial Reporting
Acquiring and distributing aggregated financial data were cumbersome tasks. Vendors provided monthly sales reports to the executive director of HTSA. These reports came in different formats that required time-consuming manual conversion and consolidation. As a result, only preliminary reports were sent to the HTSA board of directors. The association needed a more automated tool for generating and disseminating financial reports to all retailers.
Forecasting
Matching production to customer demand is a big challenge. Vendors and retailers want to satisfy their customers, but oversupply can lead to decreasing prices and higher inventory costs. Most of HTSA’s vendors are “just in time” manufacturers, so they do not warehouse inventory. Because of the association’s high aggregated volume, members’ forecasts can substantially affect vendors’ production planning. HTSA needed a more uniform and user-friendly system to help retailers provide sales forecasts.
Information Sharing
HTSA’s retail members are distributed throughout the United States and rarely compete directly in local markets. This encourages them to share technical knowledge and to address product supply issues without losing their competitive edge. However, direct communication among members was the exception. Issues were usually sent to HTSA’s executive director first, who would in turn broadcast the information to the broader membership. Similar communication inefficiencies arose between vendors and retail staff professionals. More direct ways were needed to exchange installation tips, service bulletins, FAQs, and inventory data among vendor and retail employees.
Data Security
HTSA retail members make critical business decisions based on shared financial data gathered from vendors. Members communicated by e-mail with a number of vendors as well as with one another. Because the vendors are global competitors, there was the risk of distributing confidential vendor information to a competitor through unsecured e-mail. Responsibility to handle proprietary information fell primarily on individuals and relied on diligent distribution list management—a challenge in most companies. The association needed better tools for secure data exchange, automated processing, and distribution.
Solution
After election to HTSA’s board of directors, SooHoo was asked to develop an improved collaboration solution for HTSA. Several years earlier, a Microsoft webcast describing Microsoft®SharePoint® Team Services(a forerunner of Microsoft Windows® SharePoint Services) had caught SooHoo’s attention. “At the time, I didn’t know how we could apply it, but I thought it was very promising,” he says. That introduction guided his thinking when it was time to resource the current project. Knowing it would need help, HTSA selected Hunt Interactive to help design and deploy a solution. While other providers recommended standalone Web applications, Hunt Interactive proposed a solution based on the latest Microsoft collaboration technologies, with a customized user interface designed specifically for HTSA’s unique organizational structure. (Hunt Interactive recently merged with Resolute to become Resolute Solutions Corporation, a Microsoft Gold Certified Partner based in Bellevue, Washington.)
Connecting People and Organizations
SooHoo, HTSA Executive Director Richard Glikes, Hunt Interactive’s Bryan Price, and a team of six developers and programmers quickly went to work. The team took less than six months to develop an HTSA home page, role-based communications channels, administrative wizards, and collaborative team sites for all HTSA members.
In addition to having a corporate workspace, each company manages how data may be exchanged with other HTSA members. Companies administer their own employees’ information access rights by assigning them predefined job roles. For example, retail company roles can include president, general manager, buyer, and installer—while vendors may have regional sales manager, product specialist, and technician. At the association level, roles include board member, director, and executive director. Individuals may have more than one role, but each employee must be classified in at least one role to gain access to information.
Each retail and vendor company has one person assigned as a primary contact responsible for administering employee accounts within their company. Once assigned a role, an individual’s information access and communication privileges are determined by globally defined permissions set for that role throughout HTSA. “We wanted to keep information rights management centrally defined through roles but bring functional assignments and administration down to the local level,” says SooHoo. “This really cuts the administrative load on board members.”
A home or “landing page” (Figure 1) provides HTSA member employees targeted content according to role-based permissions. Communications are directed by recipient roles and content type. A three-tiered menu system (Figure 2) defines information flow by company type, company name, and recipient job roles. For example, a vendor’s national sales manager may send product information to one buyer in a single retail company, to buyers in several selected retail companies, or to all buyers throughout the association. A targeting wizard selects the content type and format. The message may also be sent as an e-mail. Before messages or data are released for delivery, a content approver previews the content and roles to which it is to be sent. Content approval may be automatically granted for highly trusted information sources. Says Price, “The ways you can direct the content is phenomenal. We hadn’t developed anything like this before on Windows SharePoint Services, but we’re doing similar things now for other clients.”
Retail-to-Retail Messaging
Direct messaging between specific roles streamlines communications when quick response is needed. For example, if an installation manager faces a technical problem at a customer’s location, he or she can quickly send a request for help to peers at other retail companies. With the appropriate roles enabled, a link on the home page opens a message box into which the manager types the request, which is directly routed to all other individuals with the same roles. Responses may be sent directly back to the message originator, or an e-mail thread may be created.
Flexible Sales Reports
A standardized Microsoft Office Excel® 2003 spreadsheet software template accelerates acquisition of monthly sales data. Vendors’ accounting or sales managers paste data from their company’s records into the template, which is published to the Windows SharePoint Services site using a wizard. The data is then parsed with a custom application and uploaded to a Microsoft SQL Server™ 2000 database, part of Microsoft Windows Server System™ integrated server software. A user-friendly application with pull-down menus performs calculations on the data and enables output filtering as needed to create flexibly formatted sales reports with any level of granularity: by vendor, retailer, year to date, same month last year, or various subtotals. Vendors can quickly create reports showing progress toward sales quotas.
Sales Forecasting
Vendors typically ask for six-month sales forecasts, so they can adjust their manufacturing schedules to meet anticipated product demand. The solution streamlines producing and aggregating sales forecasts. Using a wizard, retail buyers post their company’s forecasts by product name or number. These data are uploaded to the database where they may be aggregated and displayed for vendors in flexible ways—for example, subtotals by retailer, or totals for all of HTSA.
Wizard-based Site and Account Administration
Each HTSA member company receives a team site, document library, and other features that come with Windows SharePoint Services. Setup and administration are managed with the help of standardized forms and wizards. To add a new member, an administration wizard presents forms for company information and the primary contact (Figure 3). A new Windows SharePoint Services site is automatically created when the form is completed.
Role-based Content and Communication
To centrally manage permissions for all 100 organizations would have required an administrator to keep track of 2,500 employees across a diverse set of vendor and retail companies. “That was not realistic,” says SooHoo. Two innovations solved this issue: first, defining information access and communication channels by job roles rather than by individuals; and second, local site administration.
Benefits
HTSA’s new communication solution increases efficiency of business processes ranging from sales analysis and production planning to sales and technical support. Secure role-based communication accelerates information exchange among vendors, retailers, and HTSA officials. Local site administration eliminates overhead that would otherwise be incurred by the central HTSA organization. These time- and cost-saving benefits help HTSA members achieve the high customer satisfaction typical of Hi-Fi boutiques while realizing financial advantages of a large buying group.
Enhanced Communication
Retailer-vendor communication has been streamlined and is more secure. Retail sales and technical professionals can consume information in product brochures, installation guides, and technical specifications without having to search individual vendor public Web sites. Vendors also have a full-featured Windows SharePoint Services team site they can customize as needed. “This opens up new collaboration channels among vendors and retailers which did not exist before,” says Price.
Streamlined Sales Reporting
The new sales reporting tool saves substantial time. Once the vendor finishes populating the sales template, a wizard automatically publishes the information to a central SQL Server 2000 database where it can be consumed by retailers and HTSA management in flexible formats. Progress toward sales quotas can be tracked more accurately, whether by retailer or the buying group as a whole. Time previously required compiling and displaying data from HTSA’s 50 vendors can be redirected to financial analysis and decisionmaking.
More Accurate Forecasting
The combined volume of HTSA members can have a substantial effect on a vendor’s manufacturing schedule. By providing sales forecasts that are easily updated and analyzed, retailers can now provide more reliable predictions of customer demand up to six months in advance. Data that was previously difficult to obtain and timeconsuming to aggregate is now available in a central database. Vendors can access the information through the HTSA team site. User-friendly analytical tools and display options can produce updated sales forecasts faster and more accurately than with previous methods.
SooHoo received major accolades when he first unveiled the solution to a semiannual meeting of HTSA retailers and vendors. Six months later, leading adopters are evangelizing the solution, business benefits are being realized, and feedback continues to be positive. “This communications tool provides excellent visibility into our business processes, and our retailers and vendors recognize its value,” says SooHoo. “We have some enhancements to make, but our members recognize this will greatly improve the way our members do business.”
Microsoft Office System
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Microsoft Windows SharePoint Services
Windows SharePoint Services allows teams to create Web sites for information sharing and document collaboration, benefits that help increase individual and team productivity. Windows SharePoint Services is a component of the Microsoft Windows Server™ 2003 information worker infrastructure and provides team services and sites to the
Microsoft Office System and other desktop programs. It also serves as a platform for application development. Windows SharePoint Services enables users to locate distributed information quickly and efficiently, as well as connect to and work with others more productively.
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