Fnac reduces the IT department’s installation and delivery times for new stores, with support from Colt’s Virtual Private Network (VPN) services

Customer name Industry Products and services Fnac Spain IP VPN, LANLink, HSS, Conferencing, Voice Line Sector Challenge Technology and cultural product To guarantee the operation of stores, distribution the central warehouse and the procurement office and to comply with delivery times for new store openings.

With Colt’s backing, Fnac manages to reduce costs in order to obtain a profitable business model Established in 1954 in , Fnac also continues to innovate by faced with instability in the is an example of a partnership moving into different store formats, operation of its internally managed between commerce, culture from the 40m2 establishment at data centre , decided to host its and technology and it is the Universidad Europea de to central servers at Colt’s Internet leading distribution brand for the 4,000m2 store at the Comercial Solutions Centre in Madrid. technical and cultural products Triangle shopping centre in Since then, Fnac’s constant in Europe. in 2016 Fnac became , along with new concepts challenge is to guarantee the part of Fnac Darty, a group with such as Fnac Connect. smooth operation of its stores a network of 664 establishments through a highly centralised in nine countries (France, Spain, Fnac’s IT department support users configuration. Francisco Díez, IT , , , who shop in the stores and those Director at Fnac, says “While we the , , being targeted by payment method can operate stores in degraded and Côte d’Ivoire). With a turnover functions, signage and dynamic mode without communications, it is of €7.4 billion, the company has marketing, along with internal users increasingly necessary to maintain 26,000 employees worldwide. who operate against corporate communications both with our systems such as ERPs, BI apps and payment servers (faced with the The brand arrived in Spain at the CRM platforms. alternative of using POS terminals) end of 1993 when it opened its first and the ERP server.” The latter is store in Madrid’s Calle Preciados, Leading provider essential for offering customers becoming a benchmark in cultural In this context, Fnac’s network and the highest level of added value and technological retail in Spain communications are vital and Colt and involves processing online from the very beginning. Fnac is Fnac’s leading supplier in Spain. receipts and obtaining first-hand Spain now operates 30 bricks-and- The company’s Virtual Private knowledge of the stock available mortar stores, as well as its online Network (VPN) is run by Colt and in in each store in order to encourage channel www.fnac.es and a Central the service area, Fnac makes use of the much sought-after omni- Warehouse. Its stores are based Colt’s hosting, back-up and active channel approach. “The ultimate in all regions across Spain, with network element management aim is to offer our customers the multiple stores in Madrid, Barcelona services. It also has hosting services best product in the best place, and , as well as a store in in Madrid and Barcelona that regardless of whether that is a the Principality of Andorra. provide a DRP (Disaster Recovery bricks-and-mortar or online store,” Plan) for some of the company’s says Díez. The company has two different critical services. business models: Fnac’s wholly- It was also vital to guarantee owned stores and, since late 2015, Fnac’s relationship with Colt goes communication with the CRM the franchise format. The brand back to 2001. When the retailer, servers, given the importance of

Colt Case study © 2017 Colt Technology Services Group Limited. The Colt name 1 and logos are trade marks. All rights reserved. “In all the time we have been execution times for new openings,” of time (within 2 months of the says Díez. In this situation, adapting corresponding order being placed), working together, we have the service/cost to new business we needed Colt to incorporate models is a priority, given that new services, such as 4G and 3G had no significant issues. Colt convenience stores and corner connections,” explains Francisco has always provided an shops have a radically different Díez. cost structure compared to Fnac’s answer to our needs, whether classic stores. Business transformation Colt is one of Fnac’s long- by adapting its services to The business is facing two issues: term suppliers and their shared our situation or by finding On the one hand, it needs to experience and partnership has shorten implementation times made the transformation of Fnac’s alternatives that have for new stores. “Negotiations and business possible in an industry that opportunities become a reality has been especially affected by the resolved any challenges” in an increasingly shorter space emergence of Internet logic and the Francisco Díez, of time. The fact that our growth digital revolution. “In all the time model is leaning towards the we have been working together, IT Director, Fnac addition of smaller stores, which we have had no significant issues. take advantage of the omni-channel Colt has always provided an answer approach to offer an extensive to our needs, whether by adapting Fnac’s loyalty programme, which catalogue without the products its services to our situation or offers member benefits online. being available in the stores by finding alternatives that have “Once again, this means we have to themselves, contributes to this,” resolved any challenges,” says process receipts online and provide says Díez. Fnac’s IT Director. updates, for instance, to Fnac members’ account balances,” says On the other hand, reducing the Fnac chose Colt in 2001. Back then, the Systems Director. company’s operating costs is a key and compared to other suppliers, issue. Once again, the fact that Fnac Colt offered better value for money Another key element was to is focusing on smaller shops means (moving from Frame Relay to guarantee the Central Warehouse’s costs must be reduced to obtain a MPLS); the choice of connecting operations, which has software that profitable business model. its centres via a redundant ring; works against the ERP server. The the option of using its Internet Central Warehouse is where stock The anticipated result is that the Solutions Centres as buildings shipments—whether for re-stocking, IT Department reduces installation for hosting the data centre; and returning or transferring to other and delivery times for new stores, finally, the possibility of opening a centres—are handled and prepared. along with initial investment new store anywhere in the country The website’s logistics are also and operating costs for new with the guarantee that any located at the Central Warehouse, establishments. “In short, it’s about communications issues would be where shipments for website making the new stores profitable resolved. customers who have requested this from the very first year.” method of delivery are prepared. Fnac’s plans for the future include “It’s worth remembering that the Díez says they have found the deploying an ambitious growth plan standard commitment is delivery answer to their needs in the range that includes the opening of around within 24 hours.” of services offered by Colt. Which is five stores per year to reach a total cheaper lines for very small stores of 45/50 establishments and the Guaranteeing the operations of and lines with increased bandwidth inclusion of new store formats and the Procurement Centre is another at a reasonable price. This means new products. “We hope Colt is part of Fnac’s challenges, given that pilot testing can be undertaken to of this,” says Francisco Díez. the Centre’s software includes the decide whether the hardware for ERP, CRM and BI servers, which several stores can be pooled in the are also used by their Sales, data centre using solutions such as Human Resources and Marketing desktop virtualisation. departments. Fnac also values the swift Finally, the configuration of Fnac’s implementation of Colt’s solutions. communications must guarantee “Given that delivery times for the deadlines for opening new definitive lines are ‘set in stone’, stores. “Competition in this market especially when we are working is increasingly on the rise, which with lines from other operators, to means our company has shorter open a store in a very short space

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Colt Case study © 2017 Colt Technology Services Group Limited. The Colt name 2 and logos are trade marks. All rights reserved.