Background

Alliance Entertainment Corporation (AEC) is one of the largest distributors of pre-recorded entertainment media in the United States, located in Coral Springs, Florida.  Pre-recorded media is the market category for items such as CDs, VHS tapes and DVDs.  AEC’s clientele includes chain stores, such as Barnes & Nobel and Wherehouse Muisc, Independent music stores and Internet based merchants selling music and video, such as Circuit City (www.circuitcity.com), Barnes & Nobel (www.bn.com) and Best Buy (www.bestbuy.com).

AEC classifies their Internet based music and video retailers for account and operational support as Consumer Direct Fulfillment, or CDF.  All transactions for AEC’s CDF are done via some form of Electronic Data Interchange (EDI).   AEC receives orders and transmits back status and billing on virtually every detail imaginable regarding the outcome of orders processed.  Many of the orders are completed and shipped direct to consumers on behalf of the retailers, hence the name Consumer Direct Fulfillment.  However, the CDF team noted that clients were constantly asking for reports detailing the most popular products, methods of shipment and other information readily available in raw form.

Competition in this industry is extremely tight.  Elana Varon (2003) quoted Jeff Chasney, Executive Vice President and CIO with CKE Restaurants, who said “If you get the lowest cost and that hurts the vendor, you will suffer”.  AEC as a vendor knew that they could not provide top levels of service if they only competed on price.  However, AEC needed to find a way to leverage their internal expertise to trim support costs to the retailers.  While one could argue that the Internet retailers should be able to create their own reports from the data already provided by AEC, AEC was reluctant to tell their clients “no”.  It would be far too easy for one of AEC’s competitors to say “yes”.

AEC previously invested in a Data Warehouse for gathering data from its various business units.  The data was stored in an Oracle (www.oracle.com) database with a reporting system from Business Objects.  The Business Objects reporting tool empowered the AEC personnel to rapidly generate the reports requested.  Often, they found that the same reports were requested by many different clients, with small variations in time frame and data elements.

The goal for AEC became very simple.  What could AEC do to gain a strategic advantage over their competitors, help their retailer partners get the reports they needed for managing their business, leverage existing technology and save on support costs?  Dan Stoller had the right idea when he said, as quoted by Sarah L. Roberts-Witt (2001), “We wanted to take our investment in data and turn that into a benefit.”  The answer was in the Data Warehouse already in place and available on AEC’s intranet from Business Objects.

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