Marks & Spencer Reduces Loss at Retail
Stores Using XML Web Services Application
Developed on Visual Studio .NET; Achieves
First Year Return on Investment of 415%
A business value analysis based on the Rapid Economic Justification
(REJ) framework and assessed by KPMG Consulting confirmed that by
using Microsoft® Visual Studio® .NET Marks & Spencer cost-effectively
automated its manual Profit Protection program thereby reducing fraud by
10%. Development costs for the Web alerts application are 66% less using
Visual Studio .NET than its prior development environment, and support
costs are 19% lower. Core coding was decreased from six months to six
weeks, an effective improvement of 400% in development efficiency.
Using XML and Microsoft BizTalk® Server the company more easily and
effectively integrates data into existing back-end systems, thus providing
near real-time analytics for improved store management. Marks &
Spencer anticipates that its new Profit Protection system will have paid
for itself before the entire project is complete. Marks & Spencer expect a
return on investment for the first year of 415% and a six-year ROI of 790%.
Executive Summary
As Britain’s largest and most well-known retail chain, with over 300 stores in the United Kingdom,
Marks & Spencer prides itself
at reasonable prices. As a
Visual Studio .NET enabled a 66% reduction in both time and
resources in developing the Profit Protection Program
customers like to pay for their
Resources
result, they serve over 10
week. However, not all these
Previous
Development
Approach
attempt many methods to
defraud the company at their
66%
Less
products. In fact, a small
percentage of consumers
Customer Profile
Marks & Spencer plc is the UK's
leading clothing retailer with more than
12.4 million square feet of trading
space across 312 British stores. The
Group employs more than 60,000
people. In 2000/01 Group turnover
was £8.1 billion and profits before tax
and exceptional items was £480.9
million. The Company also trades in
wholly owned stores in the Republic of
Ireland and Hong Kong and has 131
franchise stores in 28 countries
operating through a network of
successful partnerships.
Business Situation
A Rapid Economic Justification
(REJ) analysis, assessed by KPMG
Consulting was conducted to assess
the business value that Marks &
Spencer can expect from adopting
Microsoft® Visual Studio® .NET and
Microsoft BizTalk® Server to develop
proprietary applications to monitor
and reverse retail till losses.
Value to Business
The REJ study validated the financial
viability of automating the manual
loss prevention program at Marks &
Spencer by showing how fraud had
been reduced by 10%. The REJ
projected that the new system would
pay for itself in less than 12 months
with a first year ROI of 415% and a
ROI over six-years of 790%.
Value to IT
on providing quality products
million satisfied customers a
Solution Overview
Visual
Studio .NET
66% Less
Core application development time
using Visual Studio .NET was 77%
less than their prior development
environment and used only 44% of
the code than the company’s prior
development platform. Overall project
time was 66% less and IT support
costs were 19% less, and use of XML
enabled integration with back-end
systems.
Technology Enablers
Time to Benefit
point of purchase, so much
so, that there has been an increase in fraudulent activities over recent years.
Flexibility—.NET Framework
enables new business model based
on XML Web services and faster time
to market with new products.
Interoperability— XML-based data
exchange simplifies application
integration with back-end systems
and legacy environments
Manageability and Supportability—
Multi-language and object-oriented
development environment enables
faster, more efficient development.
Further, during this last fiscal year, Marks & Spencer, like most retailers, experienced an increase
in operational costs. To combat this Marks & Spencer created the Profit Protection Group that
successfully focused on detecting loss due to fraudulent activities at the point of sale. This was
essentially a manual process, based on the skills of local staff that investigated till losses through
periodic analysis of cash register receipts from specific stores.
“There were three problems with this manual process,” noted Martin Wilkinson, Profit Protection
Manager for Marks & Spencer. “First, there was little correlation between stores. Second, our
success was dependant on local store experience. Third, it was an after-the fact accounting of
losses, and thus was not a fraud deterrent. We needed an automated system that detected fraud
before it happened, as for example with the use of bogus credit cards. We needed to increase our
capability and effectiveness by adopting best technology practices. Finally, we needed to
integrate the new data with existing back-end systems for better management reporting.”
Marks & Spencer turned to the .NET Framework as a platform on which to build its new fraud
detection program. Using Microsoft Visual Studio .NET, Marks & Spencer was able to develop a
system that would proactively identify dishonest transactions, which could then be quickly
transmitted to in-store Profit Protection investigators through XML-based Web alerts on mobile
digital devices. The investigator could then actively stop the fraud in process. See figure 1, for a
high-level technology architecture of this process.
Critical Success
Factor
Technology Enabler
Projected
Business and IT Benefits
Protect profit by
avoiding revenue
loss
Flexibility – Writing fewer lines of
code results in quicker delivery of
product offerings. Using the .NET
Framework enables a new
business model based on XML
Web services
Return on investment – 1st year: 415%
Return on investment – over 6 years: 790%
Commercial viability of profit protection
program – payback before full roll out
Increased agility to meet business demands
Enhance retail
operational
efficiencies
Interoperability – XML-based data
exchange simplifies application
integration with back-end systems
and legacy environments enabling
data mining and rich management
reports
Real-time fraud detection and direct
notification to investigators at retail store
High available and scalable solution 24/7
Data transfer and storage as XML enables
integration with back-end systems and
improved business analytics
XML-based Web alerts delivered on mobile
digital devices enable proactive deterrent
Reduce IT
development time
and support costs
Manageability and Supportability–
Multi-language and object-oriented
development environment enables
faster time to market. Code reuse
enables greater efficiency and
productivity with fewer support
calls from users and channel
partners
Product development cycle from 6 to 8
months reduced to 6 weeks  75% to 80%
Instant alert development time reduced from
130 person-days to 30 person-days  77%
IT support costs  19%
Lines of code  44%
Development costs  66%
Wrote 5,000+ lines of reusable code as .NET
Framework components
Rapid learning curve for Microsoft Visual
C#™ .NET
“Visual Studio .NET has enabled us to build a highly scalable platform 66% faster than our prior
development environment,” explained Wilkinson. “More importantly, it allowed us to develop a
“Visual Studio .NET has
enabled us to build a highly
scalable platform 66% faster
compared to our prior
development environment.
More importantly, it allowed us
to proactively monitor fraud
and actually prevent it from
happening. This has helped us
reduce fraud by 10%. The
amount of revenue that we
have already protected in the
first six months has more than
covered our cost of
development. Now, that’s what
I call price-performance!”
Martin Wilkinson
Profit Protection Manager
Marks & Spencer
XML application that gives us the opportunity to proactively monitor fraud by comparing patterns
“Productivity of the core code
was completed in six weeks,
including training, rather than
the initial estimate of six to
eight months —an effective
difference of 400%. We’ve
gone from 250 XML
documents per second using
C++ to more than 700 XML
documents per second with
Visual Studio .NET. Visual
Studio .NET has provided us
with C++ performance on a
Visual Basic timescale. It’s
the best kept secret in the
industry!”
of buying behavior and mapping receipts from individual cash registers with centralized
information. This has helped us reduce our fraud by 10%. The amount of revenue that we have
already protected in the first six months has more than covered our cost of development. Now,
that’s what I call price-performance!”
As a result of conducting a Rapid Economic Justification (REJ) analysis, Marks & Spencer
confirmed the financial benefits of using Visual Studio .NET and the .NET Framework as a
development and operating platform. The REJ projected that the investment made by Marks &
Spencer will provide a return on investment (ROI) of 415% within the first year; and over the next
six years will provide a ROI of 790%. The REJ was assessed by KPMG Consulting.
Fast Development Cycle Helps Prevent Fraud and Contributes
Directly to Bottom Line
For Marks & Spencer, the need to effectively identify and then deter fraud was vital. The key
question was how to use information technology to quickly and cost-effectively achieve this goal.
Nathan Smith
Development Team Lead
Marks & Spencer
Marks & Spencer had already initiated a manual receipt-based 8-week trial in 38 stores to flag till
errors and to store up to six weeks of transactional data for local and central analysis. While
successful, management recognized that logging historic incidents was not effective at fraud
prevention. The company had already implemented a Microsoft BizTalk Server-based system that
used XML to link point of sale (POS) data back to a centralized data base. This system enabled
detailed basket analysis as well as the ability to extract data for analysis at the POS level, the
store level, and across the entire retail network.
The Profit Protection team used the infrastructure inherent in the BizTalk Server system to
establish a fraud
prevention system
Alerts Channel
Messaging Services
that could quickly
analyze cash register
XML
Store 1
losses, and convert
Listening
Service
& Rules
them into digital files
that could be
analyzed at a central
BizTalk
Farm
location. They used
User Web Interface
Store n
Framework effectively
XML
linked the POS
central database.
Systems rules based
E-mail
XML
MSMQ XML
protocol for data
information with a
MSMQ XML
XML
Message
Alert
& Rules
MSMQ XML
XML as a common
exchange. The .NET
MSMQ XML
Figure 1 –
Profit Protection
Systems Structure
on .NET were used
Fraud
Listening
Service
& Rules
-Alert Manager
-Case Manager
-Administration
Summary Channel
Central Office
for notification via
mobile digital devices. The use of .NET enabled fast changes to the system during trials and
reduced the cost of making changes.
SMS
“We considered using Visual Studio 6.0, but quickly recognized that it would take upwards of 18
months to complete the development,” explained Nathan Smith, Development Team Lead for
Marks & Spencer. “We needed a development environment that would allow us to rapidly code
the solution, provide high performance yet also be used by developers throughout the company
working on different systems. More importantly we needed a platform that was native XML to
enable seamless data integration between digital devices, our Windows®-based infrastructure
and back-end legacy systems.”
Smith continued ”Productivity of the core code was completed in six weeks, including training,
rather than the initial estimate of six to eight months—an effective difference of 400%. We’ve
gone from processing 250 XML documents per second using Visual C++® to more than 700 XML
documents per second with Visual Studio .NET. Visual Studio .NET has provided us with C++
performance on a Visual Basic® timescale. We have effectively lowered our development costs
by 66%. Visual Studio .NET is the best kept secret in the industry!”
Integration with BizTalk Server Enables Real-time Tracking Across
Multiple Retail Business Units
The difference between historical data on cash register loss and the ability to effectively catch
and prevent fraud as it happens is a powerful testimony to the effective use of XML-based
BizTalk Server and its ability to integrate data from disparate sources.
XML enables all POS and historic data to be transferred and stored in a common interchangeable
format with Marks & Spencer’s back-end systems. New strategic initiatives are enabled by using
Visual Studio .NET. For example, data from POS terminals can now be relayed to the central
data base, correlated against historic data and relayed out again as XML-based net alerts to
localized store agents using mobile digital devices. Armed with near real-time information, the instore agent can prevent fraud before or as it actually is happening.
Neil Herbert, IT Project Manager in Marks & Spencer, clarified the effectiveness of the new
systems when he said “.NET has enabled the business plan to fly and deliver. Performance has
already exceeded initial requirements. Our target was transmitting 250 documents per second
and we have already achieved 700 documents per second. We have attained 100% uptime and
executed some 60 billion transactional queries with no errors.”
Wilkinson continues “The fraud deterrent comes from being able to detect people as they are in
the act of fraud and then prosecute or dismiss them. In less than six months of operation, the
company has already exceeded its goals. By teaming faster development with the ability to
rapidly respond to business needs, Marks & Spencer is seen as a leader in profit protection best
practices and performance. As a result, thieves simply go someplace else.”
Near real-time data exchange from POS terminals also enables deep data mining from store
records to create rich reports that management uses for more effective business strategizing.
Effective Use of IT Paves the Way for Improved Operational
Efficiency
Marks & Spencer’s IT team developed 5,000 lines of reusable code by building its Profit
Protection Program using Visual Studio .NET and the .NET Framework. These .NET Framework
objects can be reused as components in virtually any other .NET-based project that is undertaken
“In less than six months of
operation, the company has
already exceeded its goals.
By teaming faster
development with the ability
to rapidly respond to
business needs, Marks &
Spencer is seen as a leader
in profit protection best
practices and performance.”
Martin Wilkinson
Manager, Profit Protection Program
Marks & Spencer
by Marks & Spencer. Not only will this help reduce development time, it can also help lower IT
support costs.
For example, the instant alert listener used to transmit XML data from the central data base to
the mobile device was built in 30-developer days using Visual Studio .NET compared to an
estimated 130-developer days in Visual C++. Not only is this an approximate 77% less time
needed for development, it also had a similar result in lowered support costs [estimated at 20%]
because .NET removes the possibility of memory leaks from code to zero. Further, the difference
in the number of lines of code required to write the same application is 44% less using Visual C#
.NET compared to C++.
“We’re measuring developer time in weeks not months,” noted Herbert. “The stability and
resilience of .NET is excellent. There is a super fast learning curve and minimal risk in using
Visual Studio .NET, plus the risk of a new platform is minimized due to excellent support from
leveraging other elements of the .NET Framework. From our point of view, .NET is the platform of
choice for building applications that need to span multiple IT systems using XML as the glue for
integration and data sharing.”
Neil Herbert concluded, “The Marks & Spencer Profit Protection program has not only been made
viable by the use of Visual Studio .NET, but has exceeded business expectations by achieving a
faster payback than planned with a reduced time-to-benefit fo 66% and demonstrated agility to
meet new business and user demands.”
The Microsoft .NET Framework is a platform for building, deploying, and running XML Web
services and applications. It provides a highly productive, standards-based, multi-language
environment for integrating existing investments with next-generation applications and services
as well as the agility to solve the challenges of deployment and operation of Internet-scale
applications. The .NET Framework consists of two main parts: the common language runtime and
a hierarchical set of unified class libraries that includes a componentized version of Active Server
Pages called ASP.NET, a loosely coupled data access subsystem (ADO.NET), and an
environment for building rich Windows-based applications (Windows Forms).
Microsoft Visual Studio .NET is the rapid application development (RAD) tool for building nextgeneration Web applications and XML Web services. Visual Studio .NET empowers developers
to rapidly design broad-reach Web applications for any device and any platform. In addition,
Visual Studio .NET is fully integrated with the .NET Framework, providing support for multiple
programming languages and automatically handling many common programming tasks, freeing
developers to rapidly create Web applications using their language of choice. Visual Studio .NET
includes a single IDE with RAD features for building Web applications and middle-tier business
logic, and RAD XML designers for working with data.
More information about Visual Studio .NET can be found at http://www.visualstudio.net.
“The Marks & Spencer Profit
Protection program has not
only been made viable by
the use of Visual Studio
.NET, but has exceeded
business expectations by
achieving a faster payback
than planned with a reduced
time-to-benefit fo 66% and
demonstrated agility to meet
new business and user
demands.”
Neil Herbert
IT Project Manager
Marks and Spencer
both time
Visual
and
Studio
.NET
resources
in
enabled
a
developing
66%
the Profit
reduction
Protectionin
Program The Microsoft Rapid Economic Justification framework is designed to help IT professionals
analyze and optimize the economic performance of IT investments, and appropriate optimal
resources and capital for IT projects. The core premise of this framework is that it is "business
centric" and drives to align business priorities and IT investments. The focus is on business
improvement, which may include operational efficiency as an important element, but not the
primary focus. In a collaborative process, REJ enables both business and IT stakeholders to
understand how technology capabilities can improve the metrics that define success for the
business.
For more information on REJ, please visit http://www.microsoft.com/value
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 Resource Centre at (800) 563-9048. 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 over the World Wide Web, go to:
http://msdn.microsoft.com/vstudio/
http://www.microsoft.com/net/
http://www.microsoft.com/value
http://www.kpmgconsulting.com
http://www.marks-and-spencer.com
 2002 Microsoft Corporation. All rights reserved.
This case study is provided for informational purposes only. MICROSOFT MAKES NO WARRANTIES,
EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, BizTalk, the .Net logo, Visual Basic, Visual C++,
Visual C#, Visual Studio, the Visual Studio logo, and Windows are either registered trademarks or trademarks
of Microsoft Corporation in the United States and/or other countries. The names of actual companies and
products mentioned herein may be the trademarks of their respective owners.
About This Study
KPMG Consulting, Inc. performed a review of the Rapid Economic Justification study on the business value of
Visual Studio .NET prepared for Marks and Spencer by Microsoft and Marks and Spencer as of April 2002.
The purpose of this review was to determine if the procedures and analysis performed were conducted in
accordance with Microsoft’s Rapid Economic Justification (REJ) methodology as outlined in the Microsoft REJ
Framework and to validate reasonability of conclusions given the assumptions utilized in the study.
In connection therewith, KPMG Consulting reviewed the REJ study and related supporting documents as of
April 2002 and discussed with Microsoft and Marks and Spencer the methodologies, procedures and
assumptions used to prepare the business value of Microsoft Visual Studio .Net. KPMG Consulting also
reviewed the financial analysis performed by Microsoft.
Based on a review, KPMG Consulting concludes that the methodologies and procedures performed for the
REJ Study, were reasonable and appropriate, and conducted in accordance with Microsoft’s Rapid Economic
Justification methodology. The conclusions appear to be reasonable given the assumptions utilized in the
study.
Published: April 2002