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 2025 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.

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.
Ayman Dabees, Technical Consultant, IVIS Group

Situation
Tesco is a leading retailer in the United Kingdom, with about 250,000 employees and more than 1,700 stores. Originally a chain of food stores, it has diversified its product catalog into nonfood products such as electronics, clothes, financial services, and broadband Internet services. Since the mid-1990s, the company has expanded its operations beyond its U.K. base into Ireland, Central and Eastern Europe, Asia, and North America. Tesco now serves more than 15 million customers worldwide and generates over 34 billion (U.S.$67.2 billion) in sales and over 1.3 billion (U.S.$2.6 billion) in profit. In 1996, the company introduced the Tesco.com service, giving customers the ability to shop for groceries on the Internet. It was the first system of its kind in the U.K., and its popularity sparked explosive growth in the online retail market, which increased by 25 percent in 2006 alone. It was clear that customers liked the convenience of ordering products over the Web, and that catering to this preference could be very profitable for Tesco. To remain competitive in the expanding retail market, Tesco decided in November 2005 to create Tesco Direct. This new service made it possible for customers to order from the companys extensive catalog of nonfood products and to have the orders delivered to their home or to a nearby Tesco store for pickup. According to Simon Norris, a

Technical Specialist with Tesco, It was a new venture for us. Instead of just selling the principal Tesco products we offered through the Tesco.com service to that market, we can now offer the full range through Tesco Direct. Customers can buy a Sony television there just like they can on any other Web site. Tesco envisioned making the new product catalog as accessible to its customers as possiblethrough the Tesco Direct home page on the Web and though the printed catalogs available for free in most Tesco stores. Customers who dont 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. Others could take advantage of the Web sites search capability to quickly find their selections along with current information about availability and price. Web shoppers could also place their orders at home, as with the Tesco.com service. With the Tesco Direct service, 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. The challenge was to make Tesco Direct meet customer expectations for reliability and quality established by the Tesco.com service, and to do this in such as way as to enhance the companys established retail operations and make the 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.
Ayman Dabees, Technical Consultant, IVIS Group

expandable to accommodate future demand.

means to monitor and manage the workflow process. Development of the new system began in May 2006. At that time, Tesco was part of the Microsoft Technology Adoption Program, through which it could access and evaluate beta software. Through this program, Tesco became familiar with the capabilities of Microsoft BizTalk Server 2006 while it was still in development, and decided to work closely with Microsoft to make it the foundation of the pilot and production versions of the OMS. We already knew of its capabilities, and we knew that it could do what we needed, says Norris. Dabees adds, We used an early beta version of BizTalk Server 2006 in the pilot version of the OMS as a proof-ofconcept, and from that point we fully used BizTalk in the full version of Tesco Direct. Tesco.coms implementation used Microsoft SQL Server 2005 database software for database management, 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.coms implementation. BizTalk Servers Visual Studiobased user interface also made the development process easier for us, says Dabees. Tesco developers used the Health and Activity Tracking (HAT) tool extensively while developing and testing the new system. HAT provided

Solution
To meet these challenges, Tesco needed an order-processing system that would dramatically increase its capacity to process customer orders. Time was of the essenceTesco management wanted the service to be designed, tested, and made available to customers within six months. A group of 10 engineers and consultants from Tesco and IVIS Group, a Microsoft Gold Certified Partner, was formed to create the Order Management System (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. According to Ayman Dabees, a consultant with IVIS Group and one of the developers of the OMS, The way the system was designed, 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. That would give us the flexibility to take out the OMS when necessary to do our maintenance, and then bring it back online again at any time. The new system had to be able to accept orders from multiple online and offline channels; to work with multiple warehouses within and outside of Tesco; and to give information workers within Tesco the

the ability to monitor and debug any application and process being orchestrated by the OMS, and to keep performance statistics on each element of the system. Tesco developers used the HAT tool to quickly identify inefficiencies in the workflow and resolve them, making the system as reliable as possible and optimizing its performance before the system was made available to customers. According to Dabees, We needed to enable a specific workflow to take place and to operate it. We also needed to make sure that we could see how the order was going through the procurement system, and amend these business processes if necessary. 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 companys internal and external suppliers. Most of these applications are either proprietary to the company or third-party solutions, 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, only five months after development began. The solution is built on four server computers running the Windows Server 2003 operating system, with SQL Server 2005 managing the clustered server databases. There has been no significant downtime since the system went live. Because of the

success of this project, Tesco is considering moving the Tesco.com service to a BizTalk Serverbased architecture. 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, says Dabees.

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 companys retail business. The company has substantially increased its order-processing capacity, made its supplier relationships more flexible, reduced maintenance costs, and made the Tesco Direct service stable and reliable. Increased Order-Processing Capacity With BizTalk Server 2006, the system has achieved the main performance requirement of reliably processing 5,000 orders per hour, a level of performance well beyond what the mainframe-based architecture of the Tesco.com system can provide. It was requested that the system support 5,000 orders an hour, and BizTalk helped us to hit that target without any big complications, says Dabees. Reduced Hardware Cost Even more impressively, the OMS can achieve this order-processing capacity using only 2025 percent of the servers processing capacity. Because of this, Tesco Direct can provide even more customers with reliable, around-the-clock service in the futurewithout additional cost in server hardware and maintenance. Also, because Windows Server 2003 supports distributed processing, 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. According to Norris, Being able to swap out, say, a flower or wine supplier if we decided we could get better prices or a better quality of service from another one thats something Tesco can do pretty easily with BizTalk Server. Before, it was hardcoded in mainframe code that wasnt really supportable anymore. Dabees adds, Many of our suppliers have different business processes, and our design of the OMS accommodates this. The flexible mapping and transport configuration capabilities built into BizTalk Server were critical success factors in this regard. BizTalk Server gave us, in a readymade package, everything we needed to tie together all of the different endpoints we needed to communicate with, says Norris. Better Integration of Programs The extensive, 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. These processes are also easily and comprehensively monitored using standard BizTalk tools.

According to Dabees, Issues of transmission and integration with the technologies used by partners was helped by the out-of-the-box support of multiple protocols. 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. Increased Reliability BizTalk Server has enhanced the reliability of the OMS in several ways. Because BizTalk Server can integrate with many applications, it was possible to design the OMS in a loosely coupled fashion with the Webbased customer interface component of Tesco Direct. This means that the OMS can be taken down for maintenance without disrupting the customers shopping experience. Any orders generated by the customers on the Web, by phone, or in the store are queued until the OMS can process them. BizTalk Server technology also allows the OMS to be automatically restarted if the system goes down. This is something that was quite important for us, and it comes out-of-the-box with BizTalk Server. Otherwise, we would have had to implement something ourselves to enable these features, says Dabees. This reduces downtime and supports the customers expectation of reliable, around-the-clock service. To further reduce downtime and maintain reliability, the operation of

the OMS can be continuously monitored in real time. 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. With these tools, the workers can spot problems early and manage maintenance tasks without disrupting the operation of other Tesco Direct components. With BizTalk Server 2006 and SQL Server 2005, Tesco had the tools to build a service that enhances the shopping experience of its customers while minimizing development and operational costs.

For More Information

For 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) 5682495. 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 IVIS Group Ltd. products and services, call +44 20 8579 3335 or visit the Web site at: www.ivisgroup.com For more information about Tesco PLC products and services, call +44 19 9263 2222 or visit the Web site at: www.tesco.com

Microsoft Server Product Portfolio

For more information about the Microsoft server product portfolio, go to: www.microsoft.com/servers/default.m spx

Software and Services

Hardware
Two active/passive clustered servers with four 3.16 GHz Intel Xeon processors and 8 GB of memory Four servers with two 3.16 GHz Intel Xeon processors and 4 GB of memory SAN storage system with 10 RAID 5 disks

Microsoft Server Product Portfolio Windows Server 2003 Microsoft BizTalk Server 2006 Microsoft SQL Server 2005

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published June 2007