Retail Pro product sales have not in fact been declining over the past several years, nor have their annual maintenance renewals.  Further review of the of the documents filed with the United States Bankruptcy Court in the District of Delaware, reveals that Retail Pro revenues have in fact increased over the recent past.

Also disclosed in public filings the Retail Pro source code is owned by Intuit and is not released to any third party for development or maintenance of the product. Retail Pro continues to develop, support and maintain its products exclusively.

To elaborate on the SEC filing on September 5, 2008 the Settlement resolves the SEC investigation into the Company’s financial condition, results of operations, accounting policies and procedures, internal controls, and internal revenue recognition investigation relating to the timing of revenue recognition for certain transactions during the fiscal years ended March 31, 2003, 2004 and 2005. “The Company settled the Lawsuit by consenting to entry of a permanent injunction in the United States District Court for the Southern District of California against future violations of the antifraud, reporting, recordkeeping, and internal control provisions of the Securities Exchange Act of 1934 (the “Settlement”). The Company entered into the Settlement without admitting or denying the allegations, and was not required to pay any civil penalty, fine, or monetary damages as part of the Settlement.”

Additionally, an Asset Purchase Agreement was submitted to the courts at the time of filing for protection under Chapter 11 of the United States Bankruptcy Code, demonstrating that Retail Pro will regroup.  In these tough economic times we hope that Retail Pro’s restructuring under the protection of Chapter 11 will allow them to emerge stronger and better than ever.

Paul Sobota is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at www.fcbco.com

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At every step in the product and promotion life cycle, these three departments’ needs are different—but at the same time they all revolve around gross demand planning and results.  (By “life cycle” I’m talking about the Marketing side of planning a campaign, re-forecasting results once the initial demand is in, and then potentially re-projecting after half the campaign when the majority of sales are in.)

Merchandising’s needs are about the pre-season merchandise plan or the continual planning for the e-commerce site; the forecasting by catalog drop; and the end of the season.  What quantity of each product is needed across all promotions—print, e-commerce and store?

The thing that ties these three departments’ planning and results efforts together is gross demand data.  Marketing arrives at the catalog gross demand plan based on their circulation plans by drop, by house file, and by outside list segment.  They also must think through all the “electronic” media in which specific products are featured—website home pages, e-mail, affiliate campaigns, etc.—and give some direction to Merchandising and Inventory Control.

Ideally, Merchandising’s catalog pre-season plans are built top-down by merchandise category, and bottom-up by product.  But they should come close to tying together with Marketing’s demand plans at the demand level.

Then we have Inventory Control.  It’s their job to interpret the plans and selling results and purchase product far enough in advance to be in stock when customers order.  From an inventory perspective, the Inventory Control plans aren’t going to tie back to the others’ plans exactly.  Management allows Inventory Control to purchase more product than the demand plans indicate, based on vendor lead time, vendor discounts offered, etc.

Week-for-week, one of the hardest things to do is read selling trends and interpret them in a way that allows you to make the right decisions—which ultimately provide the base line projections for yet other departments, such as Call Center and Fulfillment.  Yet from an uninitiated perspective, it looks like a free-for-all, with many different versions of plans and results.

How can BI, dashboard and executive analytic tools help with this critical decision-making?  They can provide a consistent view of all the data, so that whether they’re analyzing demand or sales, all departments are utilizing a standardized view of the same data.  This allows each department to look at the segment of data that is meaningful to them.  Business Intelligence solutions allow users to take cuts of the data and compare them in multiple ways, whether it be this year to last year or actual to plan, as well as to reassemble the data and analyze it from one department to another.  Each department needs to maintain their own way of analyzing data, but also be able to bring their plans and results together in a consistent, uniform way.

The more we talked, the more the client’s managers got back inside their skins. And they realized how important having a single version of the truth, through BI tools and executive analytics, would be to planning and reconciling results—day-for-day, week-to-week, and throughout the year.

Brian Barry is a Senior Consultant with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

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Recently, one of our clients outsourced 300,000 phone calls off shore, resulting in a substantial reduction in costs. How substantial? This client’s fully loaded internal cost per minute was $0.72, while a fully loaded off-shore cost per minute for this client is $0.42—and most of the customer service remains in house. Additionally, the client’s 90,000 mail/fax orders cost only $0.15 per order: scanned, transmitted to Asia, keyed overnight and available on-line for picking and customer service the next morning.

Clearly, you need to look at the potential savings of offshore outsourcing. How should you approach doing this type of study?

Know your internal costs. In order to compare your internal costs to outsourcing, you need to identify your fully loaded internal costs. “Fully loaded” includes direct and indirect labor, occupancy and telecom costs.  This needs to be converted to a cost-per-minute basis, which is how outsourcing will generally be proposed and invoiced. You may say that you can’t control occupancy costs, however, there may be other uses for that space, if call center is outsourced.

Competitively bid out to multiple vendors. It goes without saying that you need to competitively bid the potential project to a short list of qualified bidders. This is the only way to get the lowest costs.

Formalize an ROI (Request For Proposal). This should include:

• A pro forma for your business, meaning the types and volumes of transactions (actual and multi-year forward projections)
• Required services
• Service level standards for total call length, abandonment rate, and average call service level standards
• Request references and boilerplate contract
• Details about order management systems needed, systems integrations including e-commerce site, etc.

Decide what to keep in house. In my opinion, you should keep your custom service internal. This gives you a way to monitor the service levels of the outsource company.

Ask other critical questions. Among the things you’ll want to know:

• How will training be conducted about your product(s) and company policies?
• Is the provider PCI credit compliant and certified?
• How will you monitor your customers’ calls?
• Who are the company’s references? Come up with standardized questions to ask each of the references so you can compare their responses.

Domestic outsourcing has some advantages over off shore. Here are a few that I think are important:

• There may be an advantage in the area of English speech. However, I am greatly impressed with how well the Philippines has performed for some of our clients.
• Shorter travel distance means you can visit centers more often.
• Understands US culture.
• Keeps jobs in the USA. This may or may not be as much of a factor for you.

Of course, domestic outsource providers’ costs will be higher than off shore, but that is not necessarily a dead end. We have one client, a major non-profit with a high average order, that outsourced 100% of its direct orders domestically while keeping customer service in house. They were able to successfully renegotiate with their domestic outsource provider so that the costs were not so widely different.

Tocky Lawrence is Vice President of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at www.fcbco.com.

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Our team understands the issues and challenges facing multichannel businesses and provides insight on the following topics:

• Business Management – including “Developing Your Corporate Dashboard Of Key Performance Metrics”
• Contact Centers & Call Centers – including “Managing Your Cost Per Call”
• Forecasting & Inventory Management – including “10 Ways To Improve Vendor Quality Control”
• Direct Commerce Systems – including “How to Select Any Business System: Four Steps To Take Now”
• Warehouse & Distribution -including “Rising Transportation Costs – And What To Do About Them”

With over 45 articles filled with data, results and in-the-trenches experience, we compiled this information to provide a how-to and best practices resource to our clients and others in the industry. The articles in this book reflect the type of in-depth knowledge that a consulting firm with 250+ published articles in US and European trade publications should have – the type of knowledge and experience that F. Curtis Barry & Company brings to every client engagement. Each article was reviewed by our team and edited with timely updates.

Best Practices in Multichannel Operations & Fulfillment provides quick tips and thoughtful answers to companies working to increase their profitability, improve efficiency & productivity and reduce costs.

To order visit: http://www.fcbco.com/book.asp.

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The president authorizes a project to investigate replacing the system. Immediately a turf battle ensues. IT is already researching the Internet for the most technically up-to-date IT platform. The users’ comments are predictable: “They’ll pick the most expensive, technology-driven system out there regardless of whether it fits our business.” There is a proverbial glass wall between the two groups in many companies.

The outcome: After months of no progress, the president shrinks from his responsibility and says, “We’ll keep the current system.”

Unfortunately, this scene is played out on a daily basis in many companies both large and small. In defense of the IT department, they are often given responsibility for everything from telephone systems, to help desk, to advanced WMS systems, e-commerce systems and e-mail systems. Most often they are under budgeted. Management backs into a percent to net sales that the company can afford to spend. Additionally, the technology is diverse, complex and represents generations of different languages, databases and standards.

But in defense of the users, IT more and more takes a technological point of view rather than a business perspective. By a “business perspective” I mean that, in many cases, IT no longer knows the company’s business—not the mechanical things like how to enter an order. They lack knowledge of the industry overall. And they lack the understanding of how to help you grow and manage your business. Examples include details about what will make your marketing more effective; what do the merchants need to plan, grow and evaluate their merchandise selection; and how to help operations become more efficient. In many companies, IT often looks at application function as secondary to technology. Additionally, they hide behind a lot of technical jargon that pushes users away from them.

And systems software vendor salesmen are no better off. Gone is the day when talented sales and support people really understood the industry. Many barely know their company’s system, and many can’t even demonstrate their system without the aid of a support analyst.

The result of all this is a collection of negatives.

A technically advanced system or a system that fits the IT standard is selected. It may be a weak system from a business perspective. Technology by itself rarely gives an ROI.

The IT department’s lack of a business focus means that users don’t ever make high-level use of the systems in place, because they don’t know what applications and capabilities exist in commercial systems or in previous generations of in-house developed systems.

Another result is that there isn’t a partnership between the user departments and IT, which optimizes the full, untapped potential of IT. The company suffers because the rather large investments in critical applications don’t materialize or they are years off of the projection.

Tear down the wall
You will have to start thinking differently in order to change things.

• Is there failure to recognize problems with IT? This amounts to costly neglect. Ask, is IT an expensive utility or a necessity in your company? Your management team and IT need to have a clear understanding of the mission and charter of IT, to provide information systems that assist in company profit and growth.
• Is there failure to get IT to realize its role in the future of the business? Put IT management in place that understands the bigger picture of your business and the information that is required to manage and grow it.
• Is there failure to make your IT director an equal partner in your strategic planning process? There must be exposure to the company’s direction and an understanding of where IT plays the crucial role. Get IT buy-in early rather than just handing them a list of requests after many months of meetings.
• Is there failure to fully utilize IT resources? Develop internally, or hire, business analysts who are interested and dedicated to maximizing the user community’s use of the systems.
• Is there failure to hold users accountable? Don’t let the users hide behind IT flaws and shortcomings. They should know the business and they need to take responsibility for understanding the applications with which they’ve been provided.

Outside resources can help your company make this transition. In our consulting assignments, we have successfully assisted companies in making these types of sea changes.

We believe that IT—for good or bad (and ineffectiveness is certainly bad)—governs the productivity and profitability of this industry. How well is your company tapping its potential?

Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and warehouse consulting company. Helping you understand how to reduce freight costs is just one of the ways we can help your multichannel business.

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Here’s what the e-mail said:

“There are still many opportunities to receive great wildlife and nature-themed merchandise when you support National Wildlife Federation!

Previously the National Wildlife Federation’s name and logo was licensed to National Wildlife Direct, a separate, unrelated company that offered nature-themed products and gifts. Unfortunately, National Wildlife Direct recently closed its doors and is no longer in operation.

However, we know how much you love helping wildlife and our environment while you shop. Watch your email in-box to find out about new offers coming directly from the National Wildlife Federation such as:

• Carry-all Bags: Handy totes, field bags, backpacks and more
• Outdoor Gear: Umbrellas, windbreakers, fleece jackets, beach towels and blankets
• Animal Adoption Gifts: A special Wildlife Adoption Center with many items to choose from. Receive an adorable plush with each symbolic adoption
• Products just for Bird Lovers: Unique bird feeders, bird-watching kits and binoculars
• Gardening Gifts: Gardening totes, how-to books and tools
• Educational Gifts for your Favorite Children: Magazines that help connect children with nature
• And more!

And the best part is, your gifts directly fund the vital conservation programs of National Wildlife Federation.

We appreciate your love of wildlife, the environment and outdoors.”

As you can see, NWF mentions that BlueSky Brands had licensed their name and is no longer in business. Here is the scoop that I got from the head of Customer Service at NWF:

The catalog, of course, is closed down indefinitely. If existing customers of the catalog/website have outstanding orders, they can call 800-822-9919 or e-mail info@nwf.org. NWF will talk them through what they need to do to resolve the situation. They will not receive the product they ordered. If they ordered via credit card, they will be told to dispute the charge through the bank or credit card company. If payment was via check, they will not receive a refund until the issue with BSB is resolved.

The products mentioned in the e-mail are already sent out to people who sign up for memberships in NWF. These products are distributed via a 3PF vendor that they have been using for some time.

We applaud NWF for stepping up to help these customers, even though it was not their actions that caused the disaster. Such a possibility is always present when you license your name and don’t have direct control over others’ actions.

Jeff Barry is marketing manager of F. Curtis Barry & Co. – we are catalog consultants working with multichannel businesses to improve warehouse operations through the assessment and implementation of warehouse management systems and careful benchmarking of strategic metrics.

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Peter now owns Chimney Corner, Inc., which has two direct businesses—GiftCollector.com and BoxInBoxOut.com. Both are in the Charlottesville, VA area where these folks live.

Gift Collector.com has a wide range of gifts, china, crystal, tableware, home and garden, jewelry and collectibles from many leading resources, including Royal Doulton, Kirk Stieff, Swarovski Crystal and the like. Internet Retailer ranked GiftCollector.com among its Top 500 Internet businesses.

BoxInBoxOut.com is an outsource provider to both direct and brick and mortar merchants. They have a wide range of logistics, kitting, preparation and distribution services.

We wish Peter and his team the best in their new ventures!

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E-commerce has just received another kudo. “Customer satisfaction with the e-commerce sector hits an all time high” begins a February 19 press release from the University of Michigan regarding its latest American Customer Satisfaction Index (ACSI).

On a 100-point scale, Amazon ranks #2 at an all time high of 88, in the survey of 200 companies across different sectors. Newegg debuts at 87 and Netflix at 84. Amazon is ahead of consumer pleasing companies Apple and Southwest Airlines.

“The improvement in e-commerce is impressive, given the downward trend in the national ACSI” ratings, said the head of the ACSI at University of Michigan.

I think they are right on in some of their observations.

• Amazon’s efforts are paying off—and not only in its high ranking in this survey. Amazon recorded its biggest fourth quarter revenue ever. Are there very many brick and mortar stores or catalog businesses that can say that about 2007?

• Against the backdrop of the weakening economy and the transition that catalog must go through because of paper and postage price escalation, e-commerce is a channel we must find the appropriate strategies to grow.

Customers find the convenience of Web shopping, the product and service research capabilities, the ability to price compare, and the order tracking capabilities a good fit to their business lifestyles.

Curt Barry is president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.

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Here are the 10 major mistakes that we see companies make:

- Not having the right team in place to select and implement the system;
- Failure to write requirements and develop a gap analysis between vendor applications;
- Limiting the search to a few vendors too early in the process;
- Not conducting a competitive bid process;
- Picking technology over application function;
- Planning too many modifications versus adopting the application’s business process;
- Superficial demos that aren’t scripted to critical functionality;
- Incomplete reference checks;
- Signing vendor contracts before the total investment for hardware, software, services and maintenance are identified;
- Not having an intellectual property lawyer review the agreements before signing.

After 23 years of helping clients select and implement order management and warehouse management systems, we have put together a seminar to help shut down these potential problems. The seminar – “Selecting the Right Order Management and Warehouse Management System For Your Business” will be held in Richmond, VA on May 5 and 6, 2008. The seminar will be conducted by Paul Sobota and Brian Barry – two guys who have selected and implemented more order management systems than any other consultants.

Call Jeff Barry at 804-740-8743 or email him at jbarry@fcbco.com for details.

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Like CommercialWare being acquired by MICROS Systems/DataVantage (now known as MICROS-Retail) and Ecometry being acquired by Golden Gate and merged with GERS and Blue Martini to form Escalate Retail, this is one more major software provider that has sought venture capital. The order management marketplace has become really competitive, between acquisitions and the enterprise wide system vendors attempting to penetrate the multichannel market.

Dydacomp has been around a long time, and they have thousands of customers, which are largely startups and small companies. We hope that this new capital will lead to Dydacomp redesigning its system to be more effective for moderate sized companies. The multichannel business world needs some new effective competitors.

Check back on this blog for more updates on this topic, as we plan to get an interview with Berkery Noyes.

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