Microsoft Dynamics
Customer Solution Case Study
Specialty Coffee Retailer Implements ERP
Solution to Direct Growth, Reduce Overhead
Overview
Country or Region: Philippines
Industry: Retail—Food and beverage
retailing
Customer Profile
Rustan Coffee is the exclusive authorized
licensee for Starbucks Coffee in the
Philippines, running a rapidly growing
operation with 182 retail coffee shops.
Business Situation
The company wanted to ensure that it
had the right infrastructure in place to
manage sustained growth and place
decision makers in firm control of
business events and the organization’s
future.
Solution
Rustan Coffee implemented Microsoft
Dynamics NAV together with LS Retail
NAV from LS Retail in a phased project
performed by Retail Software Associates.
Benefits
 Enable managerial control
 Double operations, reduce finance and
IT overhead by 70 percent
 Manage business growth strategically
“With Microsoft Dynamics NAV and LS Retail NAV, we
created an efficient, scalable infrastructure that put
company strategy in the driver’s seat and helped us
make large reductions in overhead while expanding
our operation.”
Rizalito Oades, VP of Finance and IT, Rustan Coffee
Facing continued, fast growth, Rustan Coffee, the sole
authorized Starbucks licensee in the Philippines, required a
scalable, dependable business infrastructure that would help
managers take control and run the business with best efficiency.
The company replaced several limited, separate software tools
with a connected solution based on Microsoft Dynamics NAV
and LS Retail NAV from Microsoft partner LS Retail,
implemented by Retail Software Associates. During the
implementation, Rustan Coffee almost doubled the number of
coffee shops while reducing overhead in finance and IT by 70
percent. The technology reflects the company’s specific business
needs with advanced and consistent finance, supply chain, and
warehouse management. From the retail locations to the back
office, a seamless flow of information gives managers the ability
to make informed decisions and chart the company’s growth.
“Microsoft Dynamics
NAV and LS Retail NAV
helped me free up a lot
of my time…. In addition,
I can participate in more
strategic, crossfunctional exchanges
with other executives or
the store operations,
working on ways to
manage the company
more effectively as we
grow.”
Rizalito Oades, VP of Finance and IT,
Rustan Coffee
Situation
Part of the Rustan Group of Companies,
Rustan Coffee is headquartered in Makati,
Philippines. The company is the authorized
licensee of Starbucks in the Philippines,
importing coffee beans from the roasting
plant in the United States and distributing
them to the 182 stores it currently
operates.
Rizalito Oades, VP of Finance and IT at
Rustan Coffee, joined the company in 2006.
Says Oades, “The principal shareholders
anticipated rapid growth of the Starbucks
operation and wanted to ensure that
Rustan Coffee would not fall behind other
businesses that the same parent company
owned in terms of having the necessary
technology systems for supporting and
managing this expansion.”
At that time, Rustan Coffee had several
disconnected business systems, including
an enterprise resource planning (ERP)
system, highly customized warehouse
management software from JDA, a pointof-sale (POS) system from a local company,
and multiple reporting and business
intelligence tools. With none of the existing
systems infrastructure designed to
integrate, employees needed to perform
many business processes manually. For
example, the ERP software lacked a bin
locator system, which meant warehouse
employees lacked bin detail on the printed
pick lists generated by the ERP system, and
had to refer to the JDA software for that
information. Upgrades of the JDA software
were difficult to administrate because of
the extensive customizations. Without
integration, financial detail from the POS
system did not reflect in the ERP system
and finance administrators had to enter it
manually.
This fragmented business infrastructure
demanded significant resource overhead to
run and maintain, and restricted Rustan
Coffee employees from functioning at
optimal productivity. A large team of 16 IT
professionals administrated the company’s
technologies. As Oades explains, “Our
finance team had 33 employees. Except for
one person, all of them were working on
manual transaction and payment
processing, reconciliations, and some
financial reporting. Because systems were
not integrated, information could not flow
through the company. We usually
completed month-end closing late—in the
third week of the following month. In our
midweek management meetings, we were
often unable to draw on the previous
week’s sales updates from the stores. In my
executive role, I was extremely busy with
operational minutiae, like resolving
information conflicts or tracking down
business performance data.”
With Rustan Coffee’s rapid retail growth,
the company also needed an efficient
solution to manage customer loyalty and
rewards programs, which its technology
tools were unable to facilitate. Oades
decided to review technology providers
and their offerings.
Solution
Oades and his colleagues closely examined
solutions from many of the technology
companies with representation in Makati,
including Microsoft, Oracle, and SAP.
Microsoft Dynamics NAV, a richly featured
ERP system, appeared to offer many of the
capabilities Rustan Coffee was interested in.
“We had the opportunity to learn about
Microsoft Dynamics NAV by actually
experimenting with the solution,” says
Oades. “Other providers offered
presentations and white papers, but did not
offer a hands-on experience. That made a
big difference in our decision making,
especially since we were able to verify that
Microsoft Dynamics NAV provided the
capabilities we sought from an ERP
system.”
Rustan Coffee wanted to avoid deploying
new software tools during its busiest
periods, so the company scheduled
software implementation projects in stages
during several summers. Oades and his IT
team performed thorough group testing
before implementing new technology tools
into the operation:
 To begin with, Rustan Coffee
implemented the financial and
purchasing management capabilities of
Microsoft Dynamics NAV in one brief
project. Microsoft Dynamics NAV
integrates with business intelligence
tools that the company uses.
 In the next step, Rustan Coffee replaced
its existing warehouse system with
Warehouse Management modules in
Microsoft Dynamics NAV.
 In a third step, Rustan Coffee
implemented LS Retail NAV, a retail
management and POS system specifically
developed for integration with Microsoft
Dynamics NAV by LS Retail, a Microsoft
partner and independent software
vendor.
LS Retail, with headquarters in Iceland, is a
leading provider of end-to-end solutions
and services for the retail and hospitality
industries based on Microsoft technology.
LS Retail maintains its own partner channel
with more than 120 certified partners in
more than 60 countries. More than 1,900
companies with, collectively, 36,000 stores
use LS Retail solutions today. For Rustan
Coffee, Retail Software Associates, another
Microsoft partner and a certified LS Retail
partner with a strong presence in the
Philippines, performed the implementation
and integration of the two solutions.
Close to 20 Rustan Coffee employees in
finance, supply chain management, and the
warehouse use Microsoft Dynamics NAV
directly. Thousands of employees in the
company’s Starbucks retail locations work
with the POS capability of LS Retail NAV as
their primary technology resource. Sales
data from the POS stations immediately
reflects in the ERP system, where it is
available for financial calculations and
reporting. “Once employees were able to
work with the new solutions, they became
comfortable with it very quickly,” says
Oades. “The screens look much like what
you find in Microsoft Excel and other
Microsoft Office tools, so people can be
effective without extensive training.”
Rustan Coffee is preparing additional
enhancements to the technology
environment. The company is evaluating a
variety of customer loyalty solutions, which
employees will manage with LS Retail NAV
and Microsoft Dynamics NAV. An
automated inventory management function
will keep needed items available in all of
the retail locations, allowing retail
managers to simply set proper parameters
within the system and accept its
replenishment proposals. Rustan Coffee will
also implement portals for better
collaboration among employees.
Benefits
Rustan Coffee thrives and grows with ERP
and retail systems that let executives direct
for growth and help employees work with
optimal productivity. Says Oades, “With
Microsoft Dynamics NAV and LS Retail
NAV, we created an efficient, scalable
infrastructure that put company strategy in
the driver’s seat and helped us make large
reductions in overhead while expanding
our operation.”
Enable Managerial Control
Today, Rustan Coffee’s integrated business
infrastructure follows the way the company
works, including very specific operational
requirements such as effectively accounting
for goods shipped to and used by the retail
locations and the items sold, which are not
the same. “Our sales items are not the
same as the bills-of-material that constitute
these items, and in the past, we had issues
accounting for both types of items. Now,
we can easily review all the information we
need,” says Oades. “We avoid spending
valuable employee time on extracting
information from the business systems and
then determining what it means, because
it’s directly available and perfectly clear.”
“A seamless flow of
current data from the
POS systems in the retail
locations to the ERP
system at company
headquarters lets our
executives and
employees be in control
of business events…. We
now enjoy stable, reliable
supply chain and
financial management
with extremely efficient,
closely connected
processes.”
Rizalito Oades, VP of Finance and IT,
Rustan Coffee
One-time data entry has eliminated
discrepancies between various business
systems and largely removed human error.
As Oades explains, “A seamless flow of
current data from the POS systems in the
retail locations to the ERP system at
company headquarters lets our executives
and employees be in control of business
events. Month-end closing now happens
within five days or sooner, and on every
Monday, we promptly have all the
information about the previous week’s
store sales. We now enjoy stable, reliable
supply chain and financial management
with extremely efficient, closely connected
processes.”
Double Operations, Reduce Finance and
IT Overhead by 70 Percent
Since Rustan Coffee began building its new
business infrastructure, the number of
Starbucks coffee shops in the Philippines
has almost doubled, from 98 to 182. At the
same time, through transferring and
reassigning employees to other business
units, the company was able to reduce the
headcount and associated costs in finance
and IT combined by 70 percent. Instead of
33 employees, today nine of them take care
of the company’s finances; IT needs only
five people to manage systems and
support, whereas Rustan Coffee formerly
required 16 technologists to administrate
the multiple, disconnected business
systems. Oades comments, “In our finance
department, not only do we work with a
much smaller team, but the quality of the
work is also very different. With Microsoft
Dynamics NAV and LS Retail NAV, we can
work much more productively and need
only two employees of the small finance
team to do transaction processing. The
other team members can perform more
valuable tasks that can play a greater role
in moving the business forward. We can
offer financial professionals a more
rewarding, challenging work environment
where their skills can make a bigger
difference.”
Manage Business Growth Strategically
Much like his finance team members,
Oades finds that his working life has
changed for the better. “Microsoft
Dynamics NAV and LS Retail NAV helped
me free up a lot of my time,” he says. “I can
now engage in meaningful conversations
with my teams and help them grow
professionally. In addition, I can participate
in more strategic, cross-functional
exchanges with other executives or the
store operations, working on ways to
manage the company more effectively as
we grow. For example, I can use
information from the ERP system to
improve our vendor management. This is
quite different from the highly granular
tasks and inquiries I was busy with in the
past. With time to think, I’m definitely
bringing more value to the company.”
For Oades and Rustan Coffee, Microsoft
Dynamics NAV and LS Retail NAV still offer
new opportunities. Says Oades, “I know
there are many capabilities of our ERP and
retail systems that we have not fully used
yet. Our infrastructure is now very stable
and scalable, so we will continue to extend
the value we experience from our
technology investment.”
For More Information
For more information about Microsoft
products and services, call the Microsoft
Sales Information Center at (800) 4269400. In Canada, call the Microsoft
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Outside the 50 United States and
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information using the World Wide Web,
go to:
www.microsoft.com
Additional Resources
Microsoft Dynamics
 Review the listings for LS Retail NAV
by LS Retail and Retail Software
Associates in the Microsoft Dynamics
Marketplace.
 Learn more about Microsoft Dynamics
solutions for retail.
 Review deployment options for
Microsoft Dynamics solutions.
 Find out how to purchase Microsoft
Dynamics NAV.
Microsoft Dynamics is a line of integrated,
adaptable business management solutions
that enables you and your people to make
business decisions with greater confidence.
Microsoft Dynamics works like familiar
Microsoft software such as Microsoft Office,
which means less of a learning curve for
your people, so they can get up and
running quickly and focus on what’s most
important. And because it is from
Microsoft, it easily works with the
systems that your company already has
implemented. By automating and
streamlining financial, customer
relationship, and supply chain processes,
Microsoft Dynamics brings together
people, processes, and technologies,
increasing the productivity and
effectiveness of your business, and helping
you drive business success.
For more information about Rustan
Coffee products and services, visit the
website at:
philippines.starbucks.com/en-US
For more information about LS Retail
products and services, please send an
email message to info@LSRetail.com or
visit the website at:
www.LSRetail.com
For more information about Microsoft
Dynamics, go to:
www.microsoft.com/dynamics
For more information about Retail
Software Associates products and
services, call 011 (63) 2 5840545-46 or
visit the website at:
www.retail-associates.com
Software and Services
Partners
Microsoft Dynamics
− Microsoft Dynamics NAV
 Microsoft Server Product Portfolio
− Microsoft SQL Server

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This case study is for informational purposes only.
MICROSOFT MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, IN THIS SUMMARY.
Document published February 2012

LS Retail
Retail Software Associates