Microsoft Customer SolutionCase Study

South African Fashion Importer Solidifies Market Advantage with

OverviewCountry or Region: South AfricaIndustry: Distribution

Customer ProfileUniversal Footwear, based in Cape Town, South Africa, is known for its flagship brand, Zoom. It distributes fashion footwear globally. It employs 250 people and has 100 desktop computers.

Business SituationUniversal Footwear needed to standardize on an easily managed, widely supported technology infrastructure that it could integrate with other IT investments, such as a new spend management solution to control unauthorized requisitions.

SolutionUniversal Footwear standardized on integrated Microsoft® technologies and deployed Fraxion’s spend management solution to automate procurement processes across the enterprise.

Benefits Reduced unauthorized outside

purchases from 25 to 0 percent Improved productivity Reduced requisition approval

from several weeks to two days

“Customers want to know that our product will be delivered on time. Our integrated Microsoft solution gives us the information we need to do that, setting us above other South African importers.”Marwaan Abdul, Financial Manager, Universal Footwear Universal Footwear is a growing fashion importer and distributor, specializing in competitively priced footwear and accessories. Based in South Africa, the company’s manufacturing and distribution networks span the globe. Like many midmarket companies, Universal Footwear’s IT infrastructure had evolved over the years with no real integration. This resulted in inaccurate reporting, lack of control over business data, poor access to information, manual business processes, and inefficient global communications. Universal Footwear solved these problems by standardizing on Microsoft® integrated software to keep global communications lines open, improve customer service, and provide desktop access to business data—while keeping IT costs down. It chose a Microsoft Business Solutions–compatible spend management solution from Fraxion that reduced unauthorized spending from 25 percent of outside purchases to zero.

SituationBased in Cape Town, South Africa, Universal Footwear was established in 1994 when a handful of entrepreneurs working out of a single room recognized a niche opportunity. Importing shoes at a reasonable price from China, the company built a fashionable yet affordable brand of stylish footwear for young people. The Zoom brand rapidly became a hit and is widely recognized in South Africa and Australia. Today the company has more than 250 employees, working in 12 offices in 6 countries, and partners with manufacturing operations in China, Brazil, India, and Vietnam. For the past three years, Universal Footwear has had a successful accessories line, and the company is planning to introduce a line of intimate apparel.

Rapid growth forced Universal Footwear to reevaluate how it conducts business, especially in the area of global communications. With suppliers and customers around the world, employees were working 16 hours a day to conduct business by phone and fax across many different time zones. Marlene Ginsberg is the Merchandise Director who runs the Universal Footwear international division. She says, “We realize that our business is not only about footwear, or product, it’s also about providing a service. I work with suppliers in different countries delivering to customers all around the world. Good service is demonstrated by open communications and the free flow of information to get the job done most effectively. We needed an efficient, reliable communications solution.”

Universal Footwear knew it had a marketable product, but it needed a smoothly functioning delivery mechanism to remain competitive. “On the one side we had our brand, but on the other side we needed to improve the logistics and the infrastructure to deliver that product to our customers on time, every time,” says Marwaan Abdul, Financial Manager, Universal Footwear. “We needed technology systems that would allow us to keep track of all our shipments anywhere in the world, including payments to suppliers, expected delivery dates to customers, and all the key points of the sales process in between.”

The company also needed a better way to access, share, and act on business information to improve management decision-making. Staff members analyzed business data using the Microsoft® Excel® spreadsheet software, but with business information residing on individual desktops, the company’s management did not have an accurate global picture of the business.

Like most organizations in highly competitive industries, Universal Footwear needed to look at effective cost containment strategies. The challenges that the company faced—globally dispersed suppliers, employees, and customers—strained the company’s ability to manage its requisition processes, including authorization and approval, to reduce spending. For example, it was difficult to manually track situations where a requester submits a purchase or leave requisition from Cape Town, while the manager is in Australia, and

“We had to make sure that we had a competitive advantage, compared to any other importer.  At the end of the day, our infrastructure was going to be that advantage.”Marwaan Abdul, Financial Manager, Universal Footwear

Universal Footwear, based in Cape Town, South Africa, is known for its flagship brand, Zoom. It distributes fashion footwear globally.

final approval rests with someone else in the United Kingdom. The company’s spend classes—for example, Petty Cash, Expense, Claims, Travel Spend—were not all managed in one system, and most expense creditors (any creditor from which Universal Footwear does not buy stock or cost of sales goods) were only processed in the Accounts Payable (AP) system on receipt of a supplier’s invoice. This situation does not allow for proactive management of spend, because by the time it gets into the Accounts Payable modules, the liability has already occurred. For Universal Footwear, the growing necessity of an integrated technology infrastructure paralleled the company’s success. However, like most mid-sized businesses, Universal Footwear did not have a large IT budget; in fact, a single person has been responsible for the company’s technology since an IT department was formally established four years ago. This situation made it clear that any new technology had to be proven, reliable, easy to use, and well-supported.

“At this point, we asked, ‘where can we make it work better together?’” says Abdul. “The business had gone through an incredible growth curve, and we had plateaued enough to reassess our strategies. We had to make sure that we had a competitive advantage, compared to any other importer.  At the end of the day, our infrastructure was going to be that advantage.”

Solution

“From the beginning, we realized that we needed to build an integrated infrastructure to save administration and maintenance costs,” says Jacques Vandermerwe, IT Administrator at Universal Footwear. “We chose to standardize on Microsoft® technologies because they offer tight integration, reduce support requirements, and come with a proven track record.”

Choosing to StandardizeUniversal Footwear’s integrated IT infrastructure is based on Microsoft Windows Server System™ integrated server software and includes the Microsoft Windows® 2000 and Microsoft Windows Server™ 2003 operating systems, and Exchange Server 2003 for communications and collaboration. The company deployed the Active Directory® service of Windows Server 2003 to provide a central repository of information about employees’ access to resources across the company’s network. The company is using the Terminal Server component within Windows Server 2003 to deliver applications to 90 percent of its 100 desktop computers, and has standardized the remainder on the Microsoft Windows XP Professional operating system running Microsoft Office XP and Microsoft Office Professional Enterprise Edition 2003.

Universal Footwear also chose Microsoft Business Solutions–Great Plains® (now part of Microsoft Dynamics™) and Microsoft SQL Server™ 2000 database engine as its business management program to manage finances, sales and purchasing, manufacturing processes, inventory, human resources, and

“Excel, Outlook, and other Microsoft products allow me to offer better service than anyone else. I have better ways of controlling, sharing, and monitoring business information.”Marlene Ginsberg, Merchandise Director, Universal Footwear

payroll. Microsoft Great Plains provides out of the box integration into the company’s Microsoft-based environment, seamlessly exchanging information with Microsoft Word templates, Excel spreadsheets, and the Microsoft PowerPoint® presentation graphics program presentations.

Choosing a Partner Universal Footwear then began looking for a solution that would provide better control, visibility, and management of its daily spending activities. “We wanted an application that’s proven in the midmarket space and that’s built on familiar technology,” says Vandermerwe. “It would make no sense to choose a product that didn’t fit into our infrastructure, so integration with Microsoft Great Plains was mandatory.”

At a Microsoft Great Plains User Group meeting, Universal Footwear saw a demo presented by Microsoft Certified Partner, Fraxion. The product, called Fraxion Spend Management, is built from the ground up to integrate with Microsoft SQL Server™ 2000, which is also part of Windows Server System, and Microsoft Business Solutions products. Says Stanton Jandrell, Chief Executive Officer at Fraxion: “We focus on the midmarket, where our customers demand easy, time-tested technologies. That’s why this space is dominated overwhelmingly by Microsoft, and that’s why we develop solutions that integrate with Microsoft technologies.”

“We looked at a Linux-based solution, but why waste money on working it into our environment?” says Abdul. “Fraxion is part of a trusted Microsoft community and its product utilizes our IT resources without taxing our IT administrator.”

Vandermerwe agrees. “Being a one-man IT department, I need to rely heavily on outside backup and support. It’s great to know that Microsoft and our partner, Fraxion, are behind us every day.”

The solution was rolled out over four months. Employees initiate requisitions in Fraxion Spend Management, where they are approved and authorized before being posted back into Microsoft Great Plains in real time. Browser-based and capable of transactions over low-speed links, Fraxion Spend Management ensures users around the globe can easily access the application, without having to have an

application installed on their personal or mobile computers. (See Figure 1.) Fraxion Spend Management integrates with Universal Footwear’s single sign-on Active Directory security system, so staffers involved in the entire requisition-to-purchase order process do not have to remember another password. The application also takes advantage of Microsoft Exchange Server 2003 to help achieve a proactive approach to spend management, whereby employees are automatically notified via an e-mail message when requisition requests are pending. Fraxion also takes advantage of Microsoft SQL Server 2000 Analysis Services and Microsoft SQL Server 2000 Reporting Services to analyze and report on spending activities.

“Universal Footwear was keen to extend the functionality from the finance department right to the edge of the organization.  They were also keen to utilize existing technologies that they had on the desktop to facilitate that,” says Jandrell.  “As a result, Fraxion, with its use of Web-based systems, the use of the e-mail-based systems, the use of SQL Server 2000 as a database, was a very natural foot into existing integrated Microsoft technologies at Universal Footwear.”

BenefitsIntegrated Microsoft technology at Universal Footwear contributes to low administrative overhead, and improved return on investment due to reduced training, support, and development costs. In conjunction with the Fraxion Spend Management

solution, the company’s new integrated IT solution has also enhanced risk management. Previously, 25 percent of the outside purchases made by Universal Footwear employees were made in an unauthorized manner. Today, that rate is down to zero. This saves the company from paying the 15 percent premium incurred for every unauthorized outside purchase.A single source of data for the entire application set and one administrative console to administer user and authentication rights means that at Universal Footwear some 250 users across the entire server system are being effectively managed by one individual. The inherent reliability of Microsoft products gives Vandermerwe confidence that he can easily ensure that the technology supports the company’s requirements.

“Reliable technology is vitally important for Universal Footwear to operate successfully,” he says. “As the IT manager, my fundamental role is to assist people to do their jobs better. Microsoft technologies provide a stable infrastructure and reliable tools for us to complete tasks most efficiently.”

Improved ProductivityImproved employee productivity is a direct result of better, more reliable systems. It is also the result of easy-to-use, integrated solutions that automate manual business processes and simplify global communications to give employees more time for more valuable work. Staffers who used to work 16-hour days are now routinely going home at 17:00. “Instead of having to spend hours and

Figure 1 – Using the online portal solution Fraxion Spend Management, Universal Footwear employees around the world can submit expenses and proactively manage the company’s

hours trying to contact our suppliers by fax or telephone, using reliable e-mail gives us a lot more time to concentrate on the work that we’re supposed to be doing every day,” says Ginsberg.

And because Fraxion Spend Management is a Web-based application that is accessible from any desktop or mobile computer in the company, staff members can submit and approve requisitions anytime, anywhere. Overall, there has been an improvement in the rate of the approval process, which used to take several weeks. Now it’s down to a maximum of two days.“There’s virtually no training with Fraxion Spend Management,” says Vandermerwe. “It’s as easy as pointing people to the Web site. At the end of the day, employees are a lot more productive. And I can do my work without having to constantly respond to help calls. I don’t have to sit and look after the program because it just works with Microsoft Great Plains—that makes my life a lot easier.”

Better Visibility into the BusinessFor Universal Footwear, the free flow of information between Fraxion Spend Management, Microsoft Great Plains, and Office Professional Enterprise Edition 2003 provides end-to-end visibility into the business where none existed before. It also promotes proactive management and improves the ability for Universal Footwear to foresee and deal with an unexpected crisis. “A really good integrated solution, like the one Microsoft has provided us with, allows us to be ready for the future,” says Ginsberg. “Using Microsoft technologies, we are

a more responsive, agile organization that’s in a better position to grow market share.”

“Using Fraxion Spend Management and SQL Server Analysis and Reporting Services, we can see where our business is spending money,” says Abdul. “Access to information enables us to make more credible decisions. That means better budgeting, increased shareholder value, and better retained earnings and bottom-line profits.”

Employees can use familiar Office Professional Enterprise Edition 2003 core programs to pull data stored in SQL Server 2000 out of Microsoft Great Plains to view and share budgeting, planning, and financial reports, all from their Web browsers.

“We use Great Plains quite extensively, and because it integrates seamlessly with Excel 2003, it allows us to manipulate up-to-date data to answer business questions,” says Abdul. “In South Africa, businesses must account for a very volatile currency, the Rand. If you don’t make decisions at the right time, it’s easy to lose money. Now that we have access to information, we can make credible decisions.  This means better increase in shareholder value, better retained earnings, better bottom-line profits, and better deliveries to customers.”

“With this new solution, regardless of where Universal Footwear executives are in the world, they’re able to understand the potential impact of any financial transaction in a real-time environment,” says Jandrell.  “Now they can focus on growing the business.”

"With this new solution, regardless of where Universal Footwear executives are in the world, they’re able to understand the potential impact of any financial transaction in a real-time environment. Now they can focus on growing the business."Stanton Jandrell, Chief Executive

Better Communications, Better ServiceFor Universal Footwear, the essence of good service is reliable, open communications with its globally dispersed suppliers and customers, and on time delivery. “We use Excel 2003 extensively for catalogs—another service that we offer our customers—providing them with updated styling, trends, and information,” says Ginsberg. “Excel, Outlook®, and other Microsoft products allow me to offer better service than anyone else,” says Ginsberg. “I have better ways of controlling, sharing, and monitoring business information.”

Today, Universal Footwear is using its Microsoft integrated productivity solution to achieve better managed and faster customer delivery. “Customers want to know that our product will be delivered on time,” says Abdul. “Our integrated Microsoft solution gives us the information we need to do that, setting us above other South African importers.”

Microsoft SolutionsFor more information about Microsoft Dynamics, go to:www.microsoft.com/dynamics

For more information about Windows Server System, go to: www.microsoft.com/windowsserversystem

For more information about the Microsoft Office System, go to:www.microsoft.com/office

For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: www.microsoft.com

For more information about Fraxion products and services, call +27 021-683 5310 or visit the Web site at:www.spendmanagement.com

For more information about Universal Footwear products and services, call +27 021-510-4707or visit the Web site at: www.zoom.co.za

© 2005 Microsoft Corporation. All rights reserved. This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, Active Directory, Excel, Great Plains, Microsoft Dynamics, Outlook, PowerPoint, Windows, Windows Server, and Windows Server System are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are property of their respective owners.

Document published August 2005

Software and Services Microsoft Windows Server System

− Microsoft Windows Server 2003 Enterprise Edition

− Microsoft Exchange Server 2003− Microsoft SQL Server 2000

Microsoft Office System − Microsoft Office Professional

Enterprise Edition 2003− Microsoft Office Excel 2003− Microsoft Office Outlook 2003− Microsoft Office PowerPoint 2003

Microsoft Dynamics− Microsoft Business Solutions-

Great Plains Technologies

− Microsoft Active Directory− Microsoft SQL Server 2000

Analysis Services− Microsoft SQL Server 2000

Reporting Services

Partners Fraxion