Case Study: Office Depot Gets Intelligent with MicroStrategy

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When you’re running a chain of 982 office supply stores in nine countries and operating two e-commerce Web sites, the influx of sales data can be staggering. In fact, Delray Beach, Fla.-based Office Depot Inc. found itself managing a database of 74 million line items just for its Contract Sales Division alone.

Making sense of that mountain of data can be critical and often is the key to increasing profits. Nearly a third of the company’s sales come from its business services group, which offers contract services and delivery.

“We were having extreme difficulties in finding a system that could handle the amount of transactions we wanted to report on,” says Linda Belanger, senior manager for decision support at Office Depot. “In particular we were having problems reporting to the customer and order level.”

With a customer base of more than 1.2 million in its Contract Sales Division, and customers placing more than 12 million orders per year, times the number of items on each order and “you have a lot of data, more than 74 million line items per year to be more specific,” Belanger says.

Office Depot found a solution for making sense of it all with help from McLean, Va.-based MicroStrategy Inc. , which markets a variety of business intelligence software products to customers that include K-mart, AT&T, Belk Inc., Big Lots Inc., Circuit City, CVS Corp., Hallmark Cards Inc., The Limited and others.

MicroStrategy develops and sells software for analyzing information – lots of information, including supply chain data, CRM stats, sales analysis figures, financial analysis and data mining, among other things.

“We are currently using MicroStrategy Agent for our corporate analysts and MicroStrategy Web for our field sales force,” Belanger said, adding that Office Depot is “in the process of upgrading to version 7 of the MicroStrategy Business Intelligence Platform.”

Belanger says corporate analysts use Microstrategy Agent to create sales and bonus compensation reports for Office Depot’s sales force, while the sales force uses MicrosStrategy Web to access reports.

The search for a solution
The search for a more intelligent enterprise began when the Office Depot MIS department was tasked with finding a way to solve the company’s sales reporting needs. Before selecting a platform they evaluated a number of competing products, Belanger says, including products from Hyperion (formerly Arbor), Essbase, Business Objects and Cognos.

“The MicroStrategy tools were easy to use and we knew we could teach our 1,500 sales people quickly,” Belanger says, adding that the implementation was “very smooth and fast.”

“We had two MicroStrategy developers come to our office to help two analysts in the department create the six original reports we had on our Plan-it Sales Management Web site,” she said. “We started the project off in November of 1999 and by the end of March, five months later, we had 1,331 users up and running. We only had 10 reports in the Plan-it at that time. We now have 150 different reports.”

She adds, “It was quite a remarkable implementation considering we had to develop a sales database, create reports, set up secured log-in IDs and train our salespeople on how to use the software.”

MicroStrategy Web “is so easy to use the only training we did was to create a short custom Web help document,” Belanger says.

Office Depot has about 15 MicroStrategy Agent users — 10 at the corporate office and others in various locations around the country.

“We average 460 Web users per day, Belanger said, “and we are averaging 17,626 reports run per month and 9.5 million rows of data returned per month. Our heaviest day was on July 2 when 2,001 reports were run.”

Investment pays off
Just how well has this implementation worked out?

“The value we have gained from the use of the MicroStrategy products has been incredible at least and we plan on gaining even more value in 2002 with Web version 7.0,” Belanger said. “We have analyzed portions of our business that we never had the ability to analyze before and we have made some major improvements in the profitability of our division as a result.”

MicroStrategy Web Office Depot created a tool that the sales force can use to see their sales performance, whenever and wherever they want. They can also view activity of their customers. Belanger says a highlight of the software is that its easy even for users with little computer experience to use and create their own reports with Web tools.

MicroStrategy, founded in 1989, says it “gives businesses solutions to all of their query, reporting, and advanced analytical needs, and distributes insight to users via Web, wireless and voice.”

As for the cost for the technology, MicroStrategy says retailers, typically looking to deploy MicroStrategy as their enterprisewide solution, spend approximately $250,000 to $2 million on its software. But the software also handles merchandise buying, marketing analysis, management of inventory levels and assortments, tracking of consumer purchasing trends and forecasting of sales.

“Business intelligence software increasingly appears to be a prerequisite — a missing link — to a fuller, richer use of information technology as a multifaceted business tool,” says MicroStrategy’s vice chairman and COO, Sanju Bansal.

Beth F. Cox is a freelance writer.