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Office Depot

“We’re a young company, our doors first opened in 1986. As a $12 billion company,
our goal is to be the most compelling place to work and shop, and on that basis I’m
convinced we’ll be a compelling place to invest.”

— Bruce Nelson, CEO Office Depot

sales, and the Internet. Its national
Background
business-to-business delivery network
Office Depot is a gorilla in its
EXECUTIVE SUMMARY includes over 2,000 trucks, 25 domestic
market space. Today the world’s
delivery centers, more than 60 local sales
largest seller of office products, the BACKGROUND
Founded in 1986, Office Depot is the offices, eight regional call centers, a state-
company opened its first store in world’s largest seller of office products of the-art public Internet site and a
Fort Lauderdale, Florida in October and an industry leader in every
distribution channel, including stores, customized Internet site for corporate
1986. Within five years another
direct mail, contract delivery, the Internet, customers.
173 stores were open for business. and business-to-business electronic
commerce. While most would consider it primarily a
In January 1998, the company
CHALLENGE retail company, Office Depot is actually a
launched its first public Web site,
With business growing exponentially very complex business model that employs
and in August of that same year across multiple sales channels, Office
an equally complex IT infrastructure.
completed its acquisition of Viking Depot needed a technology strategy to
help manage its growing business Given the high tech methods Office Depot
Office Products, securing Office
efficiently, effectively, and profitably.
uses to service its customers and manage
Depot’s position as the leading
SOLUTION inventories, the company has been
provider of office products and Through its strategic relationship with
Cisco, Office Depot has begun to uniquely innovative in the development of
services worldwide. By the end of
implement a robust, enterprise-wide its densely interwoven sales channels.
2000, there were 1,020 stores in the network infrastructure to power an e-
United States, Canada, and nine business model that will enable cross- Office Depot’s company-wide philosophy
functional collaboration and 24/7 access mandates that customer satisfaction is
other countries as well as eleven
to real-time information.
Web sites established in nine inherent in everything it does. The
RESULTS
countries. Office Depot is reaping rewards in company fosters an environment where
reduced cycle time, more scalable, cost recognition, innovation, communication,
Office Depot takes orders through
effective business processes, and
and the entrepreneurial spirit of each
virtually every channel including improved accountability across its
enterprise – the latter yielding more employee are encouraged and rewarded.
stores, catalogs, phone, fax, direct
effective capital spending while still Strongly committed to maintaining its
providing for strong business growth.

Copyright © 2001 Cisco Systems, Inc. All Rights Reserved.

Vice President of Corporate Finance. with Cisco gear from a network perspective. business model. access to more comprehensive information more quickly than From a finance perspective. The new network quickly and cost effectively by eliminating the steps and solution would also greatly enable cross-functional collaboration reducing the errors that are inevitable with all paper-based. pertinent business while at the same time increasing accountability and ownership. By moving to an Intranet manual processes. In “The real economic value of a virtual close comes from seeking a technology strategy to support its rapidly expanding transforming operating processes such that there is continuous business. . processes of what Cisco calls the “virtual close” – the ability to close the books on a company within 48 hours.” said Charlie power of the Internet. “Now we've everything we possibly can to create efficiencies and raised that relationship up a notch. intelligence across departments.” Results Solution Today.” said Bob Conklin. Tracking all its inventories. CFO.” explained Bill Seltzer. To accomplish Cisco was simply that they were our business partner. And we can deliver it at a lower cost. financial and business integration and a more accountable outstanding bills.” disseminate timely and accurate information globally to its more According to Rob Koch. Executive Vice President. Office Depot’s first initiative after meeting with Cisco was to The company wanted a means to truly empower its workforce pursue real time access to reliable. The third step As Bruce Nelson. who manages helping balance the additional traffic. Office Depot expected an increase in efficiency. Office Depot is focused on the future with the Building that relationship began with Cisco visiting Office goal of becoming a totally integrated. as well. intuitive electronic process for integrating controls and capturing departmental collaboration and allow for the development of metrics within the Finance Department. continued e-commerce dominance. Office Depot began looking for ways to internalize the interaction across a company's business processes. the company’s mainframes have taken on an expanded role infrastructure components that enabled us to grow our company as servers fueling Internet-based applications. “The Internet-enabled The first challenge was simply keeping up with ever increasing processes we’re putting in place create an increased level of transaction volumes. executives. Depot and sharing with senior management the advantages and completely connected via networked systems. Chief Executive Officer of Office Depot. Office Depot needed a way to valuable. and custom sales arrangements is a tedious but culture within the company. “The idea is to reengineer Office Depot’s entire technology infrastructure. and the sharing of ideas and analyses. providing this. Inc. rededicate the savings to improve customer service. It was this Challenge unique application that caught the attention of Office Depot On the Web since 1995.com. Office Depot chose Cisco to provide the bandwidth and entire enterprise. Next was to set up a simple. They are engaged with us at accountability across the business.000 employees worldwide. “Our initial relationship with Internet-enabled processes internally.leadership edge. and accessibility. Brown. invoices.” Copyright © 2001 Cisco Systems. accurate and timely data. It needed an efficient network that would inspire cross. from multiple sources to generate key reports. than 48. global IT organization. both executive and operating levels applying techniques and best Executive Vice President and Chief Information Officer. the company began applying 24/7 enterprise-wide infrastructure. the Internet is a value-added enabler for Office Depot’s Initially. “Our ultimate goal is to streamline our entire business and accuracy. practice solutions. Office Depot has carved an e. commerce presence now second only to Amazon. In addition. Office Depot wanted to ensure more we could in the past. It's the linkage that’s truly critical task. was to implement methods to enable front line accountability explained: “Through technology we can give our employees and ownership. In addition to harnessing its power to ensure universal connectivity needed to move toward a more robust. which would allow for more reliable Technology provides the power to make better decisions more forecasting and eliminate unwanted surprises. All Rights Reserved. which requires input customized business accounting and analytical tools.

” “Those closest to the customer now have more control over how Brown added. “Because they’re in the trenches.” technical skill set of the entire Finance organization. and others from the benefits in becoming a Web-enabled company and challenges financial group and take them through a training and skills everyone. we enable massive increase in cross functional partnerships and them to reengineer these processes themselves.” costs. “This raises the culture. end users have complete Brown said. . from the largest accounts down to developing a highly accountable and empowered grassroots contracted maintenance organizations.” This Office Depot has implemented a powerful Internet-based system instantaneous inventory management improves Office Depot’s called Total Document Management (TDM). We’re management of inventories.” depletes the inventory or alerts the supply chain. internal reimbursement processes.” collaboration. there is also increased communication visibility into the life cycle of an invoice. The automation of the mundane has become the value instantaneous system of document management has enabled the added. provides great leadership and encouragement for exploiting the Lance Cook. With TDM. as Jack Welch says. the transaction hits our core supply chain organization alone the cost benefits will outweigh the applications and environments.“With the networking capability now in place. Business Analysis. “The week-old reports in favor of daily updates available throughout payback is that people feel connected to the mission here.” business cost-effectively. streamlining the process and reducing large company seem small again. they know One of Office Depot’s next initiatives is to complete rolling out what needs to be done. “In our Accounts Payable replenishment. And the connectivity delivered through the Web. “And we can make. a very situations are handled. Director of Accounts Payable.” Cook added.” weeks down to 72 hours. as well. “We meet thought about putting that on the Web?’ He realizes the many with business accountants. an important factor in managing the reducing complexity by using the Web to enhance workflow. “It’s not a technology investment through reduced headcount and separate Web front end that sends a batch transaction and later streamlined processes. analysts. people because they want to be part of an innovative company. “When an order comes in on our Web Cathy Kollman. them to customize the online tools at their disposal while we have also increased our ability to recruit highly talented teaching them practical project techniques. from receipt through across the company before projects are launched and much payment. “We’ve been able to unlock content The network also augments Office Depot’s real-time from what had been very proprietary storage structures. “Today.” said the network. “Bruce much more than was previously possible. supply chain processes dramatically. “He’s often heard asking: ‘Have you approach to empowering the financial organization. and when we perform ongoing the results of this first hand. Director of Sales Accounting. “Because accountability is built into the system. His leadership is changing the the tools our group builds. drastically reducing the touch points capital and discretionary spending is another major win for of document handling. Dan Depace.” Conklin said.” In the near future. All Rights Reserved. This almost culture. freeing employees from tedious activities and Finance department to virtually eliminate its dependence on transferring high value activities back to the company. By increasing their technical skill set and e-learning platforms for all employees while continuing toward Copyright © 2001 Cisco Systems. starting with his direct reports. This has had a profound impact on Office Depot.” Brown said. Senior Manager. better alignment with Office Depot’s business needs. is experiencing site or through a call center. to help Office Depot development process where we actually teach them how to build become a Web-enabled company. “We’re seeing many Office Depot has reduced transaction costs by eliminating many ideas coming forward on how to put more and more things on of its paper transactions. Inc. took a fresh technology. Office Depot plans to have all invoicing Fundamentally. Furthermore. the network has enabled Office Depot to begin handled through TDM. allowing “In addition to the benefits of building more effective processes.” the network infrastructure allows the company to outsource Those suggestions are coming from the CEO. reducing cycle time from four we’ve significantly increased our spending effectiveness.” Koch said. invoices are sent to a central outsource location where they are Using the network to manage business case justification of scanned into the network.” Cook explained. we’re seeing a capitalizing on the robust network infrastructure.

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