Marks & Spencer is a leading retailer with 300 stores in the UK and more than 600 stores worldwide. The company wanted to turn an already strong integration with suppliers into a flexible, responsive, and customer-oriented infrastructure that could respond quickly to customer needs. Marks & Spencer worked with a consultant from IT Workshop, to use a Rapid Economic Justification (REJ) analysis to identify business-critical success factors, and to create a value framework. The REJ analysis, independently reviewed by the Giga Information Group, confirmed Microsoft® Windows® 2000 Server and Microsoft BizTalkTM Server provide the flexibility and options needed for the project, and projected that Marks & Spencer could assess the Net Present Value of the system at £12 million.
Customer Profile
Marks & Spencer, the UK’s premier clothing and food retailer for 120 years, operates in over 680 locations worldwide. With revenues of £13.2 billion in 1999, Marks & Spencer is legendary in the retail industry for supplier relationships and innovation. In a period of intense competition, Marks & Spencer redoubled their commitment to value, quality, and service.
Executive Summary
Global retailer Marks & Spencer is the United Kingdom’s premier clothing, food, and financial services retailer. The company’s commitment to value, quality, and service began nearly 120 years ago. These days, retail in Europe is in a period of intense competition, and Marks & Spencer needed to rethink its plans to respond. The Information Technology Shared Services (ITSS) group proposed integrating customers into its well-established vendor supply chain and, to support the business needs, designed a flexible, real-time information backbone that ran on the Microsoft Windows 2000 Server operating system.
ITSS used Rapid Economic Justification, a results-based methodology, to measure the business value of the system. Marks & Spencer also worked with IT Workshop to undertake the necessary top-level business interviews, and to drive the overall business assessment process. The results, validated by the Giga Information Group, showed that Marks & Spencer would benefit from a large number of business applications. Marks & Spencer could assess Net Present Value (NPV) of the system at £12 million over three years.
Jo Lord, finance manager for Marks & Spencer, says, "The REJ analysis gave us ample evidence that the system could be a big plus for our overall business strategy, and much of the value of the system comes from the flexibility and options in Microsoft Windows 2000 Server."
Marks & Spencer Uses Microsoft Windows 2000 Server to Transform the Way it Does Business
Marks & Spencer Chief Executive Peter Salsbury, in a November 1999 presentation, says, "The [global supply chain] program we’ve got underway is going to transform the way we do business—and as we achieve the efficiencies we’re going for, we’ll free up hundreds of millions of pounds worth of margin. We’re going to reinvest those savings in our customer and in driving top line sales."
A boost to the program Salsbury refers to comes from the strategic information backbone ITSS calls New Data Transfer (NDT). It lays the foundation to bring customers and partners into the value chain. Windows 2000 Server was selected to provide a secure and reliable Internet platform for the backbone. BizTalk Server will simplify communication and transaction handling between Marks & Spencer and its suppliers.
ITSS used REJ to quantify the value of the system, and found benefits in many areas. Among many savings projected, the study found the potential for a 4 percent increase in revenue growth due to direct marketing and a 10 percent reduction in accounting and inventory costs.
