REEDS Jeweller Moves to Online Services to Boost Productivity and Cut Costs by 90 Percent Case Study

Microsoft Online ServicesCustomer Solution Case Study

Jeweler Moves to Online Services to Boost Productivity and Cut Costs by 90 Percent

OverviewCountry or Region: United StatesIndustry: Retail—Specialty retail

Customer ProfileREEDS Jewelers is a full-service, multichannel jewelry retailer with 67 stores in the United States and an online presence. The Wilmington, North Carolina-based company employs 600 people.

Business SituationREEDS needed to replace phone- and paper-based communications with electronic communications to help its staff be more efficient. It also wanted to reduce costs and improve uptime.

SolutionREEDS subscribed to Microsoft® Business Productivity Online Standard Suite, part of Microsoft Online Services, to give employees online access to the latest communications programs.

Benefits More time to succeed Hosting costs reduced 90

percent

“Online efficiencies have yielded more selling time and more time for corporate staff to create marketing campaigns, promotions, training, and other resources to help stores be successful.”

Rhonda Cobb, Information Technology Manager, REEDS Jewelers

REEDS Jewelers is a full-service jewelry retailer

operating online and in 16 U.S. states. To be successful,

REEDS needs fast, accurate information exchange

between corporate staff and the chain’s 67 stores.

Phone and paper-based communications were time-

consuming and difficult to reference, and the company’s

e-mail and collaboration systems were unstable and

difficult to use. REEDS used its Microsoft® Enterprise

Client Access License Suite to deploy the Microsoft

Business Productivity Online Standard Suite, part of

Microsoft Online Services. REEDS employees are now

more productive, with more time to strategize and sell.

By hosting communications services in a Microsoft data

center, REEDS has reduced infrastructure costs by 90

percent and e-mail support work by 80 percent. It has

also improved the availability of critical messaging

systems.

SituationREEDS Jewelers was founded in 1946 by Bill and Roberta Zimmer and has grown into a large regional chain with 67 stores in 16 United States, a regional direct-mail catalog, and a leading e-commerce Web site. Still a proud family-run business, REEDS strives to make every customer feel like family, with personalized service, attention to detail, and lasting quality and style. REEDS is headquartered in Wilmington, North Carolina, and employs approximately 600 people.

Phone and Paper-Based CommunicationsOnly 70 of those employees work in Wilmington; the others work in the stores across the eastern U.S. Constant, prompt, and accurate communication among corporate departments, store employees, and between stores is critical to REEDS’s success. Corporate staff members in jewelry design, marketing, finance, human resources, and other departments routinely distribute policies and procedures, market alerts, special promotions, sales figures, sales tips, and other information to stores. Conversely, corporate departments depend on communications from stores to learn about local market needs and competitors’ moves. Stores also communicate with one another to locate needed stock items, since inventory is distributed across REEDS’s stores rather than stored centrally.

REEDS used Microsoft® Exchange Server 2003 for e-mail messaging, but store staff only had Web access to e-mail messages, which limited their ability to archive and search for messages. Also, staff departures had left the company without the confidence that its e-mail policies were controlled and enforced consistently or its e-mail system reliable and flexible enough to meet its needs.

Much communication took place over the telephone and the postal mail. This slowed communication and made it difficult for store staff to locate information. “Many of the bulletins, alerts, and policies that we mailed out disappeared into binders, never to be seen again,” says Rhonda Cobb, Information Technology Manager for REEDS Jewelers.

REEDS also used Microsoft Office SharePoint® Portal Server 2003 to post some documents, but the software had not been installed correctly so it was unstable and difficult to use. Even though only a few departments posted information to SharePoint sites, stores depended on the sites to stay up-to-date on company business. Also, REEDS felt that it was not using the software to its full potential.

Corporate trainers periodically traveled to stores to deliver sales and other types of training or sent

“We wanted to give our corporate operational staff more time to devise winning jewelry strategies and marketing campaigns and free our store people to sell.”

Jim Rouse, Chief Financial Officer and Treasurer, REEDS Jewelers

packages of paperwork. However, paper-based training did not always deliver consistent message delivery. It also left store staff with additional notebooks of reference materials, which were difficult to search. REEDS wanted to deliver more frequent, more personalized, and less expensive training.

To minimize paper, time lags, information searches, and costs, REEDS knew that it needed to embrace more electronic communications. “We wanted to give our corporate operational staff more time to devise winning jewelry strategies and marketing campaigns and free our store people to sell,” says Jim Rouse, Chief Financial Officer and Treasurer for REEDS Jewelers. “We wanted to empower people to disseminate information quickly and provide a way to locate it later.”

Expensive Communications InfrastructureWhen the U.S. economy began to slow in 2008, REEDS began to investigate how to reduce its communication and collaboration costs. REEDS ran Exchange Server 2003, Office SharePoint Portal Server 2003, and its Active Directory® service on three leased servers in a third-party hosting facility, but the monthly lease for these servers was U.S.$18,000. REEDS debated whether to bring the servers in-house or move them to a less expensive hosting facility.

Even though the three servers were hosted externally, the small IT staff at REEDS co-managed them, along with 15 other servers in the Wilmington data center. “Our IT staff spent too much time babysitting servers—resolving problems, backing up data, and supporting users,” Rouse says. “Our network administrator Lora Smith spent two hours a day just troubleshooting e-mail issues.”

Unstable Collaboration ServiceThe availability of the company’s Office SharePoint Portal Server 2003 sites was another concern. Because of the faulty implementation, the portal would sometimes fail. “There were also availability glitches when server updates weren’t applied consistently,” Cobb says. “When this happened during holiday periods, it caused a lot of frustration and required several workarounds.”

SolutionTo lower costs immediately, REEDS researched the costs of bringing its messaging and collaboration servers in-house, moving them to a different hosting facility, and moving to an online software model. In late 2008, Softmart, a Microsoft Gold Certified Partner and trusted vendor, introduced REEDS to Microsoft Online Services and the Microsoft Business Productivity Online Standard Suite, a subscription-based, Microsoft-hosted service that includes

“When we looked at what we gained by moving software online, and letting Microsoft host its own software, we saw that we would gain better uptime, lower costs, and better disaster recovery.”

Rhonda Cobb, Information Technology Manager, REEDS

Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office Communications Online, and Microsoft Office Live Meeting.

“When we looked at what we gained by moving software online, and letting Microsoft host its own software, we saw that we would gain better uptime, lower costs, and better disaster recovery,” Cobb says. “We wanted to keep our software current, ally with a vendor that would be around for a long time, and get a fair price.”

REEDS achieved a good price in part by taking advantage of its existing Microsoft Enterprise Client Access License (CAL) Suite to license the Microsoft Business Productivity Online Standard Suite. The Enterprise CAL gives organizations a cost-effective way to license many popular Microsoft business programs. “Licensing Microsoft Online Services through our Enterprise Agreement gave us a fixed price and an application suite that grows with us,” Cobb says. “The software-plus-services approach that Microsoft has embraced enables our IT staff to be leaner without letting go of our business needs. Microsoft does the daily work of managing servers, and we essentially extend the capabilities of our department without hiring additional people.”

Team EffortAfter licensing Microsoft Online Services through Softmart, REEDS needed assistance with migrating its e-mail mailboxes online and connecting its on-premises Office SharePoint Portal Server 2003 installation with SharePoint Online. Microsoft introduced REEDS to two specialized Microsoft Gold Certified Partners that could help with these tasks.

Azaleos, a Microsoft Gold Certified Partner based in Seattle, Washington, had worked closely with the Microsoft Online Services team in developing an e-mail migration methodology for Microsoft Online Services customers. A week prior to beginning the e-mail migration, an Azaleos consultant worked with REEDS to complete a series of prerequisite tasks focused on application integration and e-mail configuration. The first users were migrated online by lunchtime of the first day of the onsite engagement.

After the initial pilot, the consultant shared the Azaleos migration methodology with Cobb and Smith, which enabled the REEDS staff to migrate remaining users themselves. The Azaleos consultant needed only four days onsite to complete the engagement, and the REEDS IT team gained the knowledge needed to run and maintain the system. “Even though we are outsourcing e-mail to Microsoft, we still want to know

“E-mail performance is much faster, and our messaging service is much more stable. We’re even looking at enabling employees to send e-mail outside the company."

Lora Smith, Network Administrator, REEDS Jewelers

what we are doing, and Azaleos helped us come up to speed,” Cobb says. “We migrated all 160 e-mail accounts to Microsoft Online Services in just four days.” (Even though REEDS has 600 employees, each store has one e-mail account shared by all employees in the store, with approximately 100 more accounts at corporate headquarters.)

Corus360, a Microsoft Gold Certified Partner in Norcross, Georgia, helped REEDS upgrade to Microsoft Office SharePoint Server 2007 and integrate the on-premises software with SharePoint Online. “Corus360 archived our SharePoint sites and helped us make our portal more functional as we upgraded to Office SharePoint Server 2007,” Cobb says. “It also customized the look and feel of our portal to make it easier to use.”

REEDS accomplished the complete migration to Microsoft Online Services in just three months.

Varied Communications OptionsToday, all REEDS employees have access to the latest version of Exchange Server, currently Microsoft Exchange Server 2007, and the Microsoft Office Outlook® 2007 messaging and collaboration client. “Instead of using Outlook Web Access to access e-mail messaging, store employees can use the full Office Outlook 2007 client, which gives them richer functionality and an easy ability to

archive mail, and simplifies training,” Smith says. “E-mail performance is much faster, and our messaging service is much more stable. We’re even looking at enabling stores to send e-mail outside the company, which they could not do before, because the system was unstable, and we did not have the proper controls in place to encourage effective business use at the store level.”

Each user is allotted a 1-gigabyte mailbox quota, expandable if needed, with easy management of shared calendars, contacts, and tasks. REEDS gains thorough virus and spam filtering, 99.9 percent scheduled uptime with financially backed service-level agreements, and assured business continuity and disaster recovery.

By upgrading its on-premises software to Office SharePoint Server 2007, REEDS gained richer collaboration capabilities, integrated workflow, greater personalization, and greater stability. Also, Corus360 helped REEDS understand how to use Office SharePoint Server 2007 more effectively as a business-process tool.

For example, REEDS recently posted a store survey on a SharePoint Online site rather than mailing and collecting paper surveys. The visual-display department now posts store-layout and sales-display photos online

“Online efficiencies have yielded more selling time and more time for corporate staff to create marketing campaigns, promotions, trainings, and other resources to help stores be successful.”

Rhonda Cobb, Information

rather than printing and mailing them. REEDS is also putting jewelry warranty records on the SharePoint site, where store personnel can access them quickly.

“Departments are getting information out to stores faster, because SharePoint Online is so easy to use,” Cobb says. “We are excited to start using workflows to automate common processes such as onboarding new employees.”

REEDS is beginning to deploy Microsoft Office Communicator 2007, the client software used to access Office Communications Online. Office Communications Online provides instant messaging, Web-based audio and video conferencing, and presence—the ability to see if colleagues are online. “We are using Office Communications Online in the IT and finance departments and finding that it helps us multitask much better,” Cobb says. “When you’re on a phone call and need information quickly, you can see who’s online and ask them a question without waiting on e-mail.”

REEDS is using Office Live Meeting to deliver store training online, to explain new operational procedures to all employees, and to hold impromptu meetings. “With Office Live Meeting, we can eliminate the need to print and distribute paper materials and deliver a more customized and individualized training environment for each

store,” Cobb says. When trainers do need to share reference materials, they store them on SharePoint Online sites, where employees can access them any time.

BenefitsBy migrating its communications and collaboration infrastructure to Microsoft Online Services, REEDS Jewelers has boosted corporate and store-employee productivity, which has freed up time to improve the business and sell. REEDS has trimmed hosting costs by 90 percent, reduced e-mail support work by 80 percent, and reduced training costs. Plus, REEDS has far higher availability of critical messaging services, which contributes to greater credibility for the IT staff.

Online Efficiencies Create More Time to SucceedWith access from anywhere to stable e-mail messaging, an easy-to-use collaboration system, and a common user interface across all communications and collaboration programs, REEDS has increased employee productivity at headquarters and in the stores. “With fast, easy information posting, there is far less need for corporate staff to print and mail paper to stores and much less need for store personnel to copy, distribute, file, and reference paper forms,” Cobb says. “Online efficiencies have yielded more selling time and more time for corporate staff to create marketing

campaigns, promotions, training, and other resources to help stores be successful.” Store personnel can find the information they need faster and share ideas with their colleagues in other stores.

Instead of being buried in three-ring binders, store-display photos, sales tips, and company procedures are posted online where they can be easily located. “Easy access to sales materials helps store managers take better advantage of good ideas so that they can be more effective at selling and also be more consistent with the REEDS brand,” Rouse says. Putting warranty records on the SharePoint site will also help improve customer service.

Now that stores have access to rich e-mail messaging, REEDS wants to use it more broadly as a marketing tool. Store salespeople could use customer data to send personalized e-mail messages to customers on their birthdays and anniversaries and before Valentine’s Day and Christmas.

Hosting Cost Reduced 90 Percent REEDS has reduced its hosting costs by 90 percent with Microsoft Online Services. “We previously spent $18,000 a month to host three servers, and the least expensive alternative we found was $12,000 a month,” Cobb says. “With Microsoft Online Services,

we’re paying less than $1,800 a month.”

Rouse adds, “Plus, Microsoft owns all the equipment that I don’t need to buy, carry on my books, or maintain.”

E-mail Support Reduced 80 Percent Having Microsoft host its communica-tions and collaboration services enables the REEDS IT staff to focus on strategic projects that are more critical to the business. “The two hours a day that used to be spent troubleshooting e-mail problems is down to two hours a week, mostly responding to users who are so excited that they want to do more with the software,” Cobb says. “Without Microsoft Online Services, I would have to hire another staff person, and with today’s economy, there is no way that is going to happen.”

Always-On AvailabilityREEDS also enjoys greater stability and reliability of its e-mail and collaboration systems. “I have an e-mail server that I know will be available [24 hours a day, 7 days a week],” Cobb says. “We’ve always been conscious of high security, but by moving critical business functions to a Microsoft data center, we have even greater confidence that our messaging and collaboration services will always be available. Not only does Microsoft follow best practices, but they have experts on staff that monitor

everything. We’ve actually upgraded our own network based on what we learned from Microsoft about setting up a data center.”

Training Costs Reduced Conducting training over Office Live Meeting and posting training materials on SharePoint Online reduces the printing, postage, and travel costs related to training. “We can now deliver much of our training faster and less expensively,” Rouse says. “We can also deliver a more personalized training environment for our stores. We estimate that we will save substantially on travel over time.”

Improved IT CredibilityIn 2007, REEDS went through a difficult attempt to implement another software program that demoralized the IT staff and tarnished its credibility with the rest of the company. “The Microsoft Online Services rollout restored that credibility,” Rouse says. “This was a major project accomplished without a hiccup.”

Cobb echoes the success. “The close relationship between Microsoft and our three Microsoft partners enabled us to pull this off,” she says. “They didn’t just work for us, they worked with us to be successful.”

Microsoft Online ServicesMicrosoft Online Services are business-class communication and collaboration solutions delivered as a subscription service and hosted by Microsoft. With these offerings, customers can cost-effectively access the most up-to-date technologies and immediately benefit from streamlined communications, simplified management, and business-class reliability and security features. For IT staffers, Microsoft Online Services are backed by strong service level agreements and help reduce the burden of performing routine IT management, freeing up time to focus on core business initiatives.

For more information, visit: www.microsoft.com/online

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 Azaleos products and services, call (866) 318-8767 or visit the Web site at: www.azaleos.com

For more information about Corus360 products and services, call (770) 300-4700 or visit the Web site at: www.corus360.com

For more information about Softmart products and services, call (888) 763-8627 or visit the Web site at: www.softmart.com

For more information about REEDS Jewelers products and services, call (910) 350-3100 or visit the Web site at: www.reeds.com

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

Document published September 2009

Software and Services Microsoft Online Services

− Microsoft Exchange Online− Microsoft Office

Communications Online− Microsoft Office Live Meeting− Microsoft SharePoint Online

Microsoft Office− Microsoft Office Outlook 2007− Microsoft Office SharePoint

Server 2007

Solutions− Software-plus-services

Partners Azaleos Corus360 Softmart

“We can … deliver a more personalized training environment for our stores. We estimate that we will save substantially on travel over time.”

Jim Rouse, Chief Financial Officer and Treasurer, REEDS Jewelers