The retail industry is facing sweeping and unprecedented change.

Customers’ expectations grow higher, economic pressures require

them to do more with less, and each day new competitors appear.

Responding to that rapid pace of change, retailers tell us, is both

their biggest challenge and their biggest opportunity. Retailers who

can adapt to change can make intelligent, fast decisions; find new

markets to exploit; and constantly improve their products, services,

and operations.

But retailers don’t have a switch to flip that turns them into super-

smart, super-adaptable businesses. Hoping to find that switch, they

often turn to technology, looking for some magic to help them

navigate a changing business environment. However, technology

by itself is not the solution. Any discussion about generating a

positive impact for the business should first center on how to

empower people with effective solutions that deliver results. A

“connected retailer” not only leverages a flexible, economical

technology platform that drives results, but also focuses primarily

on its greatest asset: people empowered by the right solutions to

act on the right information at the right time.

To enable your organization’s people assets to extend their

potential through the use of software, Microsoft delivers agile and

adaptive solutions for business process automation (BPA). BPA

solutions provide the tools, technologies, and infrastructure to

automate complex business processes end to end in order to help

increase competitive advantage and deliver tremendous value and

visibility to your business, customers, and trading partners. This

enables you to:

• Increase personal and organizational productivity. By

automating business policies and best practices, removing

manual tasks, and eliminating error-prone reentry of information,

BPA boosts individual and team efficiency, which enables

retail organizations to deliver results faster and with greater

predictability.

• Make better decisions. By providing real-time insight into key

business metrics and providing proactive alerts and notifications,

BPA gives broader insight into essential business processes

that are critical to your business (across both the store and

headquarters) and provides real-time analytics that enable you

to make better decisions faster.

• Enhance operational excellence. Ensuring a continuous,

high-quality customer experience requires support for mission-

critical business processes with the utmost levels of reliability.

BPA provides a rock-solid foundation that delivers the security,

performance, scalability, and reliability demanded by the

distributed, mission-critical systems of modern retail enterprises.

Three key areas of retail business process innovation that can

be transformed through business process automation are the

“point of service,” “supply chain management,” and “multichannel

integration” priority solution scenarios. These scenarios, or strategic

areas of focus, are examined in more detail on the following pages.

BUSINESS PROCESS AUTOMATION IN RETAIL

For more information, please visit www.microsoft.com/biztalk

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SCENARIO: SUPPLY CHAIN MANAGEMENT

Overview

The majority of retail systems (67 percent) are home-grown legacy systems that are not equipped to

enable efficient collaboration with business partners. Increasingly, retailers with a closely connected supply

chain (such as Wal-Mart) have a strategic competitive advantage against those that don’t. Supply chain

management solutions from Microsoft deliver an integrated approach to merchandise management that

allows retailers to deploy state-of-the-art technologies at a low total cost of ownership (TCO) to meet

the increasingly demanding business needs of merchandise management and demand planning (using

standards like UCCnet Global Data Synchronization and EDI/AS2).

Benefits

Effective, demand-driven replenishment; integration with legacy environments; full integration for

multiple channels; agility to implement and integrate emerging technologies like RFID and GDS/UCCnet

Case Study

London Drugs, a leading Canadian retail chain serving customers across Alberta

and British Columbia, had historically performed virtually all of its mission-critical

processes—human resources, general ledger, inventory, and merchandising—on

legacy applications that were running on an AS/400 computer. The company was missing business

opportunities because these applications were outdated, expensive to support, and didn’t offer the

flexibility necessary for creating a much-needed automated supply chain process. London Drugs

implemented a new business process automation infrastructure based on best-of-breed enterprise

resource planning and supply chain applications and real-time integration. London Drugs has now

linked its enterprise systems with automated supply chain handling and automatic replenishment and

order generation. The solution reduces manual processing and errors, lowers holding costs by speeding

inventory movement and reducing standing inventory, and increases revenue by ensuring more

dependable inventory stocking.

For more information, please visit www.microsoft.com/biztalk

“BizTalk Server is definitely a

technology that will provide a lot

of value as we integrate more

functionality into the system.”

—Ole Andersen,

Manager, Strategic Innovation,

London Drugs

KIOSK

SECUR

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PORTAL/DASHBOARDSTORE MANAGER

WORKBENCH

AS/400

ADAPTER

ORCHESTRATIONENGINE

ADAPTER ADAPTER

BUSINESS RULE ENGINE

B2B

SAP

MULTICHANNEL FRAMEWORK

DATA WAREHOUSE

SUPPLIERSDISTRIBUTORS

BAM

STOREDATA BUS

BUSINESS RULESMETA DATA

REPORTINGSERVICES

XML AS2

RFID READERS

PDA

INTERNET

RETAILER

RETAILER

$850.00$850.00

POS

$850.00

POS

$850.00

POS

SMART CART

CATALOGCALL CENTERE-COMMERCE SITE

STORE STORE STORE

“Our close partnership with

Microsoft helped us implement a

scalable and robust commerce site.”

—Carmella Cassetta,

Vice President, Engineering

and Product Development

Barnesandnoble.com.

SCENARIO: POINT OF SERVICE (POS)

Overview

Retailers are facing increasing competitive pressure to implement innovative in-store solutions (for example,

self-checkout, kiosks, RFID) that differentiate through an enhanced customer experience. However, due to

razor-thin margins, they also face a need to extend the value of legacy systems and minimize the technology

infrastructure investment required within the store. Point-of-service solutions from Microsoft enable the next

generation of in-store retail innovation by enabling retailers to take advantage of new technologies that

provide better customer connection through a point-of-service offering, all at a lower TCO.

Benefits

Real-time information flow across the critical systems that perform traditional transaction functions,

such as POS, inventory control, etc.; enhanced customer interactions, like self-checkout; efficient store

management with loss prevention, out-of-stock control, etc.

Case Study

Virgin Entertainment Group wanted to reduce the significant losses it was experiencing

due to employee theft in its music and entertainment stores, but that effort was hampered

by long lag times in data reporting that made it hard to identify suspicious activity. The

multichannel entertainment retailer automated its point-of-sale processes and enabled flexible data

access and information sharing across stores and systems in headquarters. This new solution enables

reporting that provides real-time data monitoring, suspicious activity alerts, and long-term trend analysis

to help the loss prevention team at Virgin Entertainment Group identify and prevent employee theft.

This has improved reporting capabilities and has boosted fraud detection by 50 percent.

SCENARIO: MULTICHANNEL INTEGRATION

Overview

Today’s retailers are under pressure to provide a more seamless customer experience across multiple

channels (store, Web, call center, etc.). Burdened by aging legacy systems and processes, their current

retail channel silos and fragmented customer interactions result in a high cost of sales and service,

poor employee productivity, limited flexibility, duplication in maintenance of processes and systems,

and, ultimately, presentation of an undifferentiated value proposition to customers. Multichannel

integration solutions from Microsoft enable retailers to achieve a competitive advantage in today’s

customer economy. By providing a unification of the customer experience across channels, the

Microsoft solutions enable retailers to attract and retain customers and meet customers’ expectations

whenever, wherever, and however the customer chooses.

Benefits

Increased customer acquisition and retention; improved customer analytics; improved direct marketing

efforts; new revenue streams through effective cross-sell and upsell strategies; reduced cycle time

between order and delivery; lower fulfillment costs; real-time inventory visibility

Case Study

With more than 1,000 superstores, Barnes & Noble has a significant retail

presence across the United States, selling almost 445 million books per

year. The company had the challenge of linking its disparate operations (store, Internet, publishing)

into a smoothly functioning infrastructure. Barnes & Noble implemented a new multichannel process

automation solution that enables customers to easily browse and purchase books across either in-

store or Internet-based channels, and allows the company to manage distribution and fulfillment in

an integrated fashion. The solution has provided improved insight into customer shopping behavior,

improved customer satisfaction, greater efficiency, and improved scalability and reliability.

The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication.

This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT.

© 2006 Microsoft Corporation. All rights reserved. Microsoft, BizTalk, InfoPath, SharePoint, the Windows logo, Windows Server, and Windows Server System are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Microsoft Corporation • One Microsoft Way • Redmond, WA 98052-6399 • USAMicrosoft Canada Inc. • 320 Matheson Blvd. West • Mississauga, ON L5R 3R1 • Canada0106 Part No. 098-104547

MICROSOFT SOLUTIONS FOR RETAIL BUSINESS PROCESS AUTOMATION

Sysrepublic Real Time Integrator: Enabling Real-Time Action on Store Events

Sysrepublic Real Time Integrator for Microsoft® BizTalk® Server provides

a robust and scalable real-time integration backbone that links events

in the store with headquarters operations. It enables retail customers

to integrate legacy, current, and future applications and systems

together in an efficient manner. Real Time Integrator provides a flexible

framework that operates alongside your current technology systems

and can be readily extended and changed as your business changes.

Out-of-the-box POS Adapters provide access to your multivendor POS

transactions as they occur, and also provide visibility into this critical

business information. This enables the analysis of immediate store

performance metrics and provides a foundation for implementing

real-time analytical applications (including out-of-stock analysis, labor

monitoring, fraud detection, inventory management, etc.).

Integrated components include Microsoft BizTalk Server, SQL Server™,

Windows Server™, SharePoint® Portal Server, and Microsoft Office

InfoPath®.

Cactus Global Data Synchronization (GDS) Accelerator: Enabling Efficient Supply Chains

The Cactus GDS Accelerator leverages the robust integration

capabilities of BizTalk Server and overlays data pool–specific

configurations and functionality to provide a global data

synchronization solution for reducing the costs and business

impact associated with trading-partner integration for retail and

manufacturing supply chains.

The Cactus GDS Accelerator lowers administration costs by practically

eliminating the need for rekeying information and documents,

resulting in fewer errors and invoice disputes—all of which reduces

product introduction and promotion lead time. It improves logistics

by enhancing the rate of accurate orders, which results in fewer return

shipments, fewer emergency orders, and more efficient short-term

planning to help avoid issues such as back-ordering.

Cactus GDS Accelerator provides a cost-effective way to quickly

connect to multiple data pools (like 1SYNC and the WWRE) to manage

communications with trading partners and integrate real-time data

through product information management (PIM). This lays the

groundwork for future RFID initiatives with minimal investment and

impact on existing systems, processes, and infrastructures.

Integrated components include BizTalk Server, SQL Server, Windows

Server, SharePoint Portal Server, Microsoft Commerce Server, and

Microsoft Office InfoPath.

For more information on these solutions and the set of Microsoft business process automation technologies, please visit www.microsoft.com/biztalk.