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Microsoft BizTalk Server Customer Solution Case Study

Tesco Develops Online Ordering System That Processes 5,000 Orders

Overview
Country or Region: United Kingdom Industry: Retail Customer Profile Tesco PLC is a leading retailer in the United Kingdom, with more than 1,700 stores in Europe and Asia. Based in Cheshunt, Hertfordshire, it employs more than 250,000 people. Business Situation Tesco had to quickly increase its capacity to process customer orders from multiple channels while minimizing development and maintenance costs. Solution Tesco used Microsoft® BizTalk® Server 2006 and Microsoft SQL Server™ 2005 to build a highperformance order-processing system to support its new Tesco Direct direct-retail service. Benefits  Increased order-processing capacity  Reduced hardware cost  Increased flexibility in maintaining supplier relationships  Better integration of programs

“BizTalk Server gave us, in a ready-made package, everything we needed to tie together all of the different endpoints we needed to communicate with.”
Simon Norris, Technical Specialist, Tesco PLC

Since 1996, United Kingdom retailer Tesco PLC has seen a rapid increase in the number of its customers and has added many nonfood products and services to its catalog. To accommodate this growth, Tesco created the Tesco Direct service and built a new orderprocessing system based on Microsoft® BizTalk® Server 2006 to support its operation. The new solution works better with suppliers’ warehousing software systems; is more reliable; and has increased order-processing capacity. It has achieved its intended performance benchmark of processing 5,000 orders per hour while using only 20–25 percent of processor capacity. This enhanced performance has made it possible for Tesco to add to its catalog of products and services without expanding the current hardware configuration, thereby reducing system maintenance costs.

as with the Tesco.K. clothes.” Tesco envisioned making the new product catalog as accessible to its customers as possible—through the Tesco Direct home page on the Web and though the printed catalogs available for free in most Tesco stores. Originally a chain of food stores. This new service made it possible for customers to order from the company’s extensive catalog of nonfood products and to have the orders delivered to their home or to a nearby Tesco store for pickup. and that catering to this preference could be very profitable for Tesco.6 billion) in profit. the company wanted to cater to customers’ desire for shopping convenience by helping them shop from anywhere and take delivery of their orders at home or in-store. base into Ireland. Asia. The challenge was to make Tesco Direct meet customer expectations for reliability and quality established by the Tesco.com service to that market. IVIS Group Situation Tesco is a leading retailer in the United Kingdom. and broadband Internet services.com service.3 billion (U. the company introduced the Tesco. In 1996. Web shoppers could also place their orders at home. Customers can buy a Sony television there just like they can on any other Web site. To remain competitive in the expanding retail market.com service. Since the mid-1990s. Customers who don’t have access to the Web or prefer to shop from the printed catalog would be able to place their order by phone or at an in-store Tesco Direct order desk.000 employees and more than 1.2 billion) in sales and over £1.$67. Instead of just selling the principal Tesco products we offered through the Tesco.com service. which increased by 25 percent in 2006 alone. and North America.S. it has diversified its product catalog into nonfood products such as electronics. Tesco now serves more than 15 million customers worldwide and generates over £34 billion (U. “It was a new venture for us. Tesco decided in November 2005 to create Tesco Direct. Central and Eastern Europe. the company has expanded its operations beyond its U.“I would say that without BizTalk Server and the rapid development of the business process it allowed it would have been very difficult to keep to the development timeline. a Technical Specialist with Tesco. With the Tesco Direct service.” Ayman Dabees. and its popularity sparked explosive growth in the online retail market..700 stores. According to Simon Norris. with about 250. Others could take advantage of the Web site’s search capability to quickly find their selections along with current information about availability and price. and to do this in such as way as to enhance the company’s established retail operations and make the service . financial services. we can now offer the full range through Tesco Direct. giving customers the ability to shop for groceries on the Internet.S. Technical Consultant. It was the first system of its kind in the U. It was clear that customers liked the convenience of ordering products over the Web.K.$2.

Tesco became familiar with the capabilities of Microsoft BizTalk® Server 2006 while it was still in development. means to monitor and manage the workflow process.” Tesco.” says Norris. IVIS Group expandable to accommodate future demand. the online processing work happened on the Web interface side. where all of the orders were put into a queue for processing by our OMS. The group decided to make the customer interface and the orderprocessing system loosely coupled so that the system would be as stable and manageable as possible. a Microsoft® Gold Certified Partner. That would give us the flexibility to take out the OMS when necessary to do our maintenance. A group of 10 engineers and consultants from Tesco and IVIS Group. and we knew that it could do what we needed.” says Dabees. Development of the new system began in May 2006. “We used an early beta version of BizTalk Server 2006 in the pilot version of the OMS as a proof-ofconcept. Tesco was part of the Microsoft Technology Adoption Program. “BizTalk Server’s Visual Studio®–based user interface also made the development process easier for us. through which it could access and evaluate beta software. and to give information workers within Tesco the . Tesco needed an order-processing system that would dramatically increase its capacity to process customer orders. Tesco developers used the Health and Activity Tracking (HAT) tool extensively while developing and testing the new system. Through this program. Dabees adds.” The new system had to be able to accept orders from multiple online and offline channels. and from that point we fully used BizTalk in the full version of Tesco Direct. to work with multiple warehouses within and outside of Tesco.“BizTalk Server freed us from thinking about the mechanics of the integration and helped us to focus on developing and implementing the business process itself.com’s implementation used Microsoft SQL Server™ 2005 database software for database management. According to Ayman Dabees.” Ayman Dabees. HAT provided Solution To meet these challenges. and made available to customers within six months. “We already knew of its capabilities. was formed to create the Order Management System (OMS). a consultant with IVIS Group and one of the developers of the OMS. and decided to work closely with Microsoft to make it the foundation of the pilot and production versions of the OMS.com’s implementation. tested. and then bring it back online again at any time. Technical Consultant. “The way the system was designed. At that time. and the extensive interoperability between BizTalk Server 2006 and SQL Server made it possible to reduce development time by taking advantage of aspects of Tesco. Time was of the essence—Tesco management wanted the service to be designed.

and each has its own specific requirements for data exchange and access. The OMS was delivered and integrated into the Tesco Direct service in September 2006.the ability to monitor and debug any application and process being orchestrated by the OMS. According to Dabees. Most of these applications are either proprietary to the company or third-party solutions. “I would say that without BizTalk Server and the rapid development of the business process it allowed it would have been very difficult to keep to the development timeline. Because of the success of this project.com service to a BizTalk Server–based architecture.” says Dabees. and to keep performance statistics on each element of the system. “We needed to enable a specific workflow to take place and to operate it. The solution is built on four server computers running the Windows Server® 2003 operating system. and amend these business processes if necessary. There has been no significant downtime since the system went live. We also needed to make sure that we could see how the order was going through the procurement system. . Tesco is considering moving the Tesco.” The developers incorporated BizTalk Server Business-to-Business (B2B) capabilities into the OMS to enable it to communicate with the many warehousing applications used by the company’s internal and external suppliers. Tesco developers used the HAT tool to quickly identify inefficiencies in the workflow and resolve them. with SQL Server 2005 managing the clustered server databases. only five months after development began. making the system as reliable as possible and optimizing its performance before the system was made available to customers.

Also. out-of-the-box support for communication protocols and B2B messaging systems offered by BizTalk Server makes the procurement workflow processes of the OMS work with nearly any program. the processing power of the current servers can support future expansions of the system. Increased Flexibility in Maintaining Supplier Relationships The flexibility to easily add and replace suppliers when necessary was also important. reduced maintenance costs.Benefits The decision to use BizTalk Server 2006 as the foundation of the new ordering system at Tesco has resulted in significant benefits to the company’s retail business. Reduced Hardware Cost Even more impressively.com system can provide. The company has substantially increased its order-processing capacity. and BizTalk helped us to hit that target without any big complications.000 orders an hour. “Being able to swap out. say. Before. everything we needed to tie together all of the different endpoints we needed to communicate with. made its supplier relationships more flexible. because Windows Server 2003 supports distributed processing. The flexible mapping and transport configuration capabilities built into BizTalk Server were critical success factors in this regard. Better Integration of Programs The extensive. in a readymade package. Tesco Direct can provide even more customers with reliable. the system has achieved the main performance requirement of reliably processing 5. Increased Order-Processing Capacity With BizTalk Server 2006. These processes are also easily and comprehensively monitored using standard BizTalk tools. it was hardcoded in mainframe code that wasn’t really supportable anymore. a flower or wine supplier if we decided we could get better prices or a better quality of service from another one— that’s something Tesco can do pretty easily with BizTalk Server.000 orders per hour. Because of this. “It was requested that the system support 5. around-the-clock service in the future—without additional cost in server hardware and maintenance.” “BizTalk Server gave us. “Many of our suppliers have different business processes.” Dabees adds. the OMS can achieve this order-processing capacity using only 20–25 percent of the servers’ processing capacity. a level of performance well beyond what the mainframe-based architecture of the Tesco.” says Dabees. . and made the Tesco Direct service stable and reliable. According to Norris.” says Norris. and our design of the OMS accommodates this.

This means that the OMS can be taken down for maintenance without disrupting the customer’s shopping experience. Tesco uses the BizTalk Server Business Activity Monitoring (BAM) component and HAT tool with the OMS so that support workers can monitor the orderprocessing workflow down to a single order or product. the operation of the OMS can be continuously monitored in real time. BizTalk Server technology also allows the OMS to be automatically restarted if the system goes down.” says Dabees.” Increased Reliability BizTalk Server has enhanced the reliability of the OMS in several ways. “This is something that was quite important for us.According to Dabees. we would have had to implement something ourselves to enable these features. With BizTalk Server 2006 and SQL Server 2005. or in the store are queued until the OMS can process them. With these tools. around-the-clock service. BizTalk Server freed us from thinking about the mechanics of the integration and helped us to focus on developing and implementing the business process itself. . This reduces downtime and supports the customer’s expectation of reliable. Otherwise. Because BizTalk Server can integrate with many applications. “Issues of transmission and integration with the technologies used by partners was helped by the out-of-the-box support of multiple protocols. by phone. To further reduce downtime and maintain reliability. it was possible to design the OMS in a loosely coupled fashion with the Webbased customer interface component of Tesco Direct. and it comes out-of-the-box with BizTalk Server. Any orders generated by the customers on the Web. the workers can spot problems early and manage maintenance tasks without disrupting the operation of other Tesco Direct components. Tesco had the tools to build a service that enhances the shopping experience of its customers while minimizing development and operational costs.

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