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TV Shopping Network: Huge Growth With Small Costs

  • 20 February, 2004 11:22

<p>Australia's top TV retailer counts on Revelation Software</p>
<p>Normally, people don't put the phrases "control costs" and "expand IT function" together in the same sentence. When it comes time to talk about "expanding IT function," it's more likely you'll hear it paired with phrases such as "wow – that seems like an awful lot," or "you mean on top of what we've already spent?"</p>
<p>It's a tricky syndrome. As a business grows, it's IT requirements grow and systems need to be upgraded and expanded. Poof! There goes your profit. Over the past few years, plenty of companies have sunk under the weight of their massive investments in technology infrastructure and IT services.</p>
<p>There's a company from Down Under that knows how to come out on top of the IT investment conundrum: Australia's TV Shopping Network (TVSN). They've controlled costs even as their technology requirements have taken a quantum leap – and they credit Revelation Software with making it possible.</p>
<p>Television Shopping – It's a Hit!
In just eight short years, TVSN has grown to become Australia's leading television retailer with approximately 700,000 customers in its database, making it five times larger than its nearest competitor. TVSN's gross revenue has doubled every two years, and they're expecting gross receipts of $100 million in 2004. Most importantly, TVSN is poised to start delivering significant profit to the bottom line.</p>
<p>"The trick is to grow the business without growing the cost base," says Rob Hunt, CEO at TVSN, "and for us, the key to keeping the cost base fixed is IT. Our IT platform generates efficiencies in the warehouse, the call center, the way we order product, the way we analyse past sales and project future sales. At a most fundamental level, our IT platform manages our customer base and enables us to give them top quality service – and thereby maximize sales. And we count on Revelation Software to help us do all that."</p>
<p>Revelation – There From the Beginning
TVSN grew out of company called Demtel, an early player in television retailing. Demtel built its own customer database and retail operations applications using Advanced Revelation (ARev), the award-winning development environment for DOS. That was nearly 20 years ago. When TVSN was launched in 1995 and acquired Demtel, they engaged PowerForce Software – one of Australia's leading Revelation software developers – to upgrade and extend the system. PowerForce deploys a variety of technologies to suit their customers' needs, and Revelation products are among the favoured tools in their kit.</p>
<p>The launch of TVSN might have prompted some developers to recommend switching to a new platform, but not PowerForce. It wasn't so much an issue of cost, but simply that no technology was up to the task. "TVSN had a huge wish list of things to be done," said Kyle Amadio, Chief Systems Architect at PowerForce for Retail Systems. "We had to build the entire call centre and television studio management system, and we had to do it in six weeks – just me and one other programmer. The only application environment that could handle it in the timeframe available was ARev."</p>
<p>Seamless Integration
Fast-forward a few years: TVSN has been growing rapidly and decides to upgrade their call centre with a new Interactive Voice Response (IVR) system integrated with a UNIX based Oracle database. The IVR system's primary role is to take orders and reduce the load on the call centre. A new vendor is brought in to implement the IVR system, but the project bogs down as costs rise and the vendor tries to convince TVSN to rebuild their entire technology platform. After several months, Powerforce is brought back to straighten things out.</p>
<p>"TVSN's entire operation lived in ARev," Amadio explained, "all their dispatching systems, finance systems, all the pricing information, the primary customer databases, the whole thing. Why would you want to junk all that just so you could add a new order processing system? You wouldn't. Because Revelation integrates so seamlessly and is such an easy environment to work in, we brought in the Oracle based voice system without junking any of the existing database or applications. That not only saved TVSN a huge amount of time and money, it also avoided most of the risks associated with reworking their IT system."</p>
<p>That made TVSN's CEO, Rob Hunt, happy. "By the time PowerForce was done with it," he said, "we brought our outsourced call center back in-house, we gained a whole lot more control, and we cut costs to a third of what they had been – which is just amazing! In fact, our new order processing system, EasyOrder, saves us about $1.5 million each year."</p>
<p>Now, PowerForce is completing the upgrade from ARev to OpenInsight, the newest generation of Revelation's application development tools. "TVSN is increasingly using Oracle as the primary database," said Amadio, "but we're migrating the code that was previously written in ARev right over to OpenInsight. So there's an upgrade path from software that's nearly 20 years old to much more modern software. And the 16?bit moved to 32?bit, so there's no need to feel as though you've been left behind."</p>
<p>Enterprise Mix and Match
While most of TVSN's growth has developed organically as more viewers tune in, they've also made some strategic mergers with similar companies. In 2003, TVSN absorbed three other businesses, and each one of them needed to be incorporated into the core TVSN system. Amadio says that's a perilous process for a lot of technology platforms – but it's one of the ways Revelation really shines. "Business integration, if it's not done properly, can be a disaster. In this case, we had only a few months to bring in data and business processes and modify the TVSN system to accommodate these additional businesses. If we had to sit down and rewrite all this stuff in JAVA or Visual Basic or C++ or another environment, you're looking at years. With Revelation, we had a very flexible tool set and a flexible database, so we were able to make it happen quickly with complete stability. We had no problem bringing the customer database from the other businesses online in the TVSN system. It was a seamless switchover."</p>
<p>Untangling the Web
In addition to the call centre, customers can also do their ordering on the TVSN Web site. In the early scramble to keep up with their wild growth, the various developers working for TVSN had ended up creating separate databases for the call centre, the Web site, the IVR and one of their early business acquisitions. Once again, Powerforce stepped in and straightened it all out with Revelation software.</p>
<p>"They had three separate databases with duplicated business rules," Amadio explained, "which was driving everyone mad and costing the business a fortune, because they had to do everything three times. If you wanted to introduce a new customer loyalty program, well then you had to code it three times, and then you had to synchronize them. We re-engineered the Web site and integrated it with the existing IVR database so that the business processes, the discounting structures, and the loyalty programs all work the same way, using the common set of PL-SQL stored procedures. And OpenInsight drives all that code. OI is the glue that makes it all work. It sits in the middle, orchestrating the Web site and IVR and interacting with the database – and it's had a dramatic impact upon the business."</p>
<p>For TVSN, an important feature of a Revelation?based Web site is that TVSN's staff can easily update the site. "Their Web site is 100% dynamic," said Amadio, "and every part of it is user maintainable. The entire management of the site is in their hands. As soon as they have a product available to sell, it's on the Web – completely interactive with the database. So from an end-user perspective, the system is extremely flexible and offers them complete control. And Revelation is what makes it possible."</p>
<p>The Future Looks Bright!
"We're 47% up on last year, so we're still growing very quickly," says Rob Hunt. "In the next two to three years, our revenues should hit $300 million to $400 million, which will probably drop about $30 million or $40 million to the bottom line."</p>
<p>To reach their goal, TVSN continues to count on Revelation. "We've got five members on our board of directors, and every single one of them has an IT horror story from some other company," Hunt said. "With that thought in mind, the board's philosophy is 'There's nothing more important for this business than IT.' And their mandate to us is to 'make sure that we're always scaled for growth, and make sure that it's stable.' And that's the thing about Revelation – it's completely scalable, and it's just so stable!</p>
<p>"We're at the stage now," Hunt continued, "where if our call centre or Web site were to go down for just one hour, we could well drop $60,000 or $70,000 worth of revenue – which any company can ill afford to do. So we don't want to be the guinea pig for any piece of software. We only want to use what we know is proven, and the Revelation platform has just been so stable and dependable for us. Part of that has to do with how we've maintained it, and being careful about the way we've built upon it – and then the other part of it is just Revelation's inherent stability."</p>
<p>That's why Revelation products have been around for so long. And that's why Revelation will be the choice of growing enterprises for years to come.</p>

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