Two years on from its deployment of the InControl Evolution application—which it now markets and sells to other businesses—United Kingdom (U.K.) retailer The Co-operative Group is supporting the retail management technology within its pharmacy stores with Microsoft SQL Server 2008 data management software. The group now runs all 800 stores on a single, central installation of SQL Server 2008, which has already saved the business £1.5 million in licensing costs and £500,000 in hardware.

The Co-operative Group, which includes 4,900 retail outlets in the U.K., leads the industry in its use of technology to support innovative, ethical, and environmentally sound strategies.

One such innovation is the organisation's InControl Evolution application, designed by the group to fit the unique needs of retailers. Not just an electronic point-of-sale system, InControl Evolution is a total head office and branch solution, which manages stock, supply chain, cash management, financials, and customer relationship management. In 2007, the group worked closely with Microsoft Services to deploy the application on Microsoft SQL Server 2005 in each store. At the time, the business saw a potential for the product to be marketed commercially to other retailers.

During the development of InControl Evolution, the group was keen to remain open to advances in technology. Lawrence Freeman, Development Manager, Software Development for Store Systems at The Co-operativeGroup, explains: "Microsoft Services helped us to ensure our architecture was flexible so that we'd be in a position to adapt to changes quickly and easily."

Today, the group is reaping the benefits of this decision. Its acquisition of the Somerfield chain in 2009 has increased the size of its food business by 900 stores. "Our decision to use InControl Evolution across all new stores was pretty swift," says Freeman. "The application made the conversion strategically easier. Used across all food and pharmacy outlets, it provides us with a single platform on which to trade. We haven't had to rewrite elements of the application-it has scaled perfectly well to the Somerfield environment."

In addition, a focus on the organisation's pharmacy business and its growing hardware costs is bringing the idea of centralised systems to life. "The overhead for maintaining hardware in-store amounts to millions of pounds a year," says Freeman. "We were determined to reduce these costs as well as the time and resources needed to upgrade software at our 800 stores."

The release of Microsoft SQL Server 2008 Enterprise has brought improvements in database technology to match the substantial needs of The Co-operative Group pharmacy network. The powerful solution supports an unlimited number of virtual environments and the retailer quickly saw its potential to support all 800 stores on a single, central database server. This means that the InControl Evolution application-and other applications, as required-could be deployed through thin clients into the stores.

But despite being confident in their knowledge of SQL Server, the technical employees were aware of the risk of taking the functionality of 800 database servers running locally, and putting it in one place. "We were unsure whether one installation of SQL Server could sustain the activity of that many stores, or whether the load would be too great," says Freeman. "However, the project has been a success. It's quite an achievement to run nearly 800 stores on a single installation of SQL Server 2008. From a business perspective, the information is in the centre rather than being stuck out in the stores. Where previously we relied on overnight processes-where data had to be retrieved from each store-we now have that information in real time."

The group has not had to change its InControl Evolution application to adapt to the new database environment, because a product of its earlier work with the Microsoft Services team was a blueprint for future centralisation. Freeman says: "If we hadn't started our journey with Microsoft, we wouldn't have had the options we have now. The technology was designed to be scalable, device independent, and distributed."

The ongoing work with Microsoft has helped The Co-operative Group refine its InControl Evolution application and market it to other retailers. Having invested around £10 million (U.S.$16 million) in the product, the group is delighted to have already closed some large industry deals. "It's a unique product that offers rich functionality designed specifically for small to medium-sized retailers. One organisation had been searching for a solution for two years, but within six weeks of seeing InControl, it signed up," says Freeman. "Within our five-year plan, we are already achieving revenues in year one that we expected in year three. It's extremely promising." The retailer's in-house implementation of a centralised SQL Server 2008 database within its pharmacy business has also resulted in some dramatic improvements.

Licensing costs are vastly reduced. Freeman explains: "With our conventional deployment, we'd have 800 copies of SQL Server. With just one instance of SQL Server 2008 in place operating on a Microsoft Volume Licensing agreement, we're saving the cost of 799 licences-around £1.5 million."

Hardware costs are halved. "By moving to the centralised model for SQL Server 2008, we've already saved about £500,000 in hardware and predict big savings as a result of reducing our power consumption," says Freeman.

Thin-client hardware lasts longer. By deploying applications over a thin client into the stores, The Co-operative Group needs far less hardware in each location and its lifetime is extended significantly. According to Freeman, the lifespan of its hardware has doubled from three or four years to eight years.

Centralised model eases management. The group's technical team can spend less time upgrading applications, a process that is now carried out centrally. "The retail business moves fast and software updates are frequent. Now, our people are freed for more productive activities, such as training employees in using software," says Freeman.

Real-time information improves visibility. Information is immediately available and can be tracked in detail. Freeman says: "The security and audit team can find data on fraudulent transactions in real time and can act accordingly."

Lawrence Freeman, Development Manager, Software Development for Store Systems, The Co-operative Group

Customer: The Co-operative Group
Web Site: www.Co-operative.coop
Number of Employees: 123,000
Country or Region: United Kingdom
Industry: Retail and hospitality

Customer Profile
The Co-operative Group is the largest consumer-owned retailer in the United Kingdom. It employs 123,000 people, has 3 million trading members, and 4,900 retail outlets, including food and pharmacy.

Software and Services

• Microsoft Server Product Portfolio
  - Microsoft SQL Server 2008 Enterprise
• Services
  - Microsoft Premier Support
• Technologies
  - Microsoft .NET Framework 3.0

For more information about other Microsoft customer successes, please visit: www.microsoft.com/casestudies