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Supply-Chain Management Platform Supports Seamless Partner Collaboration

Technical Case Study

Published: June 2009

The Microsoft Entertainment and Devices (E&D) Division uses a complex supply chain of more than 300 partners, suppliers, and distributors. Supporting the E&D business model requires a security-enhanced, easy, and scalable infrastructure to collaborate with multiple companies. Microsoft® Office SharePoint® Server 2007 provides the technology platform for E&D's global supply network. The platform incorporates business intelligence (BI) solutions, workflows, and support for previous solutions. It enables accurate decision making based on timely and trustworthy information, and supports seamless collaboration with business partners. Standardization and the reuse of existing IT investments reduce complexity.


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Products & Technologies

The rapid growth of the Microsoft Entertainment and Devices (E&D) Division led to a supply-chain web that included hundreds of suppliers, multiple data silos, and minimally integrated proprietary and custom applications. This complexity resulted in decreased financial performance due to rigid workflows, work-intensive manual processes, and untimely performance data

The E&D Division streamlined workflows and business processes by using Office SharePoint Server 2007 as the core technology platform.

  • Accurate performance data and business intelligence for decision making
  • Increased employee satisfaction and productivity from process and reporting automation
  • Faster turnaround for workflow changes
  • Closer collaboration with suppliers and partners
  • Microsoft Office SharePoint Server 2007

The E&D Division is one of the three core business divisions of Microsoft Corporation. E&D currently accounts for more than $6.5 billion US in annual revenue and is growing rapidly. Over the past five years, E&D increased the number of manufactured and shipped goods by more than 1,100 percent, launched two game consoles and a wide range of wireless digital media devices, established a global retail channel, and developed a third-party publisher ecosystem with the highest attach rate in the industry. E&D has taken advantage of Microsoft Office SharePoint Server 2007 technology to accelerate the organization in a challenging business environment.

This technical case study is intended for business decision makers.


The Microsoft E&D supply chain used to operate with a limited number of manufacturing turnkey vendors (MTVs), third-party logistics (3PL) providers, and distributors delivering Microsoft products through the retail channel to the customer. This turnkey supply chain worked well in previous decades because the product portfolio was small, the products were relatively uncomplicated, and fewer business laws and regulations existed.

Today, the Microsoft supply chain has evolved into a global system with a large number of vendors, suppliers, manufacturers, consolidation centers, logistics providers, postponement operations, distributors, customer service centers, and many other partners. The products have evolved as well, and include digital media devices and game consoles with more than 1,000 parts, such as the Microsoft Xbox 360® video game and entertainment system. The product life cycle is shorter, requiring faster time to market and balanced inventory levels. There are also new ways to reach the customer, such as through connected entertainment channels and digital supply chains that did not exist 10 years ago. Because of these developments, supply-chain management has changed substantially over recent years at E&D, requiring tight vertical and horizontal integration in a vast and complex collaborative network.

"As much as we talk about Xbox, Zune, IPTV, and building what we call connected entertainment, all our ecosystems are partner-based and involve worldwide supply chains. For several years now, we've focused on operational excellence. We're getting very strong here and we think we're finally ahead of the game in terms of the future."

Robert J. Bach
President, E&D Division
Microsoft Corporation

Rapid Growth and Business Performance

Prior to the implementation of a streamlined supply-chain management infrastructure based on Office SharePoint Server 2007, E&D deployed a diverse mix of Microsoft server technologies, third-party products, and custom line-of-business (LOB) applications with minimal integration of supply-chain partners. Most collaboration and reporting processes relied on manual information exchange through e-mail messages or uploads of Microsoft Office files. The lack of system integration, scattered reporting solutions, and inflexible workflows, in combination with tedious and laborious business processes, made it increasingly difficult for E&D to manage the growing density and volume of its supply-chain transactions.

Organizational Processes Strain Scalability

There were other indicators that the organization had reached a critical threshold. For instance, the monthly financial reporting processes at E&D included more than 140 activities that relied on each other. Any delays, missing data, and inaccuracies severely affected the reporting process and consequently forced E&D employees to turn into creative crisis managers on a frequent basis. Many reports remained incomplete, and these unplanned monthly crisis activities also prevented E&D employees from accomplishing their regular tasks.

Dependence on e-mail messaging also contributed to organizational distress. Receiving hundreds of messages each business day, E&D employees archived messages in local personal folder store (.pst) files. E&D estimated that 50 to 75 percent of business-relevant information resided in personal archives, inaccessible to the enterprise. Information sharing between employees was difficult, so employees attended more and more meetings to stay informed.

Decision-Making Challenges

Organizational distress also affected the managerial levels at E&D because it was almost impossible to make accurate decisions without reliable BI. There was no single, centralized view into the supply chain. BI had developed into more than 30 disparate data silos. These silos were not integrated with each other or the central enterprise resource planning (ERP) system that Microsoft uses for all financial management. Security policies prevented the reporting solutions in the extranet from accessing the ERP system in the internal production environment. Because various reporting solutions offered different versions of the same information, E&D management found it difficult to manage the business. Managers could not effectively monitor the execution of strategic plans and objectives.

Workflow Management Overhead

Practically all E&D supply-chain management processes consist of workflows, yet there was no standard way to orchestrate actions or assign individual tasks. It was a constant challenge for managers to know the status of each project and identify delayed tasks in order to take appropriate actions to get projects back on track quickly, drive accountability through reminders and escalations, or at least inform the stakeholders. Third-party solutions addressed only some of these issues and introduced many others.

Most notably, the third-party workflow solutions locked E&D into a particular vendor because the solutions relied on proprietary technology. This proprietary technology created strong dependencies on IT because defining or modifying workflow definitions required the involvement of solution developers. The workflows by themselves were not complex, yet the turnaround time for developing new workflow definitions typically required several weeks. It was difficult to react quickly to changing business needs. These strong dependencies on IT impaired E&D's business agility and incurred maintenance and development costs in excess of $500,000 annually.

Partner Onboarding Ambiguity

The highly diversified nature of the supply-chain management infrastructure also created obstacles for E&D to expand its operations and take advantage of emerging globalization opportunities. There was no straightforward process to establish partnerships with new types of suppliers or intensify relationships with existing partners. There was also no clear path or central solution for E&D program managers to initiate request for proposal (RFP) processes for new projects with selected vendors in order to choose the best offer within the selection criteria.

Information Security Concerns

One of the greatest barriers to seamless supply-chain integration was a lack of easy-to-use security controls for sensitive business information. Concerns regarding information breaches caused many E&D managers to prefer e-mail communication and manual workflows over alternative and more efficient collaboration methods. The inevitable duplication and widespread distribution of information, versioning issues, and message size restrictions in the corporate production environment limited the usefulness of e-mail messaging for file transfers. For more involved collaboration and reporting needs, E&D groups used file servers and Web-based systems deployed in the Microsoft extranet environment.

Managing access permissions on individual extranet resources was burdensome. A consolidated view of all permissions granted to a particular user account on all resources available in the extranet was unobtainable. Accordingly, it was difficult to ensure proper security management without granting greater authorizations than the actual tasks required. The limitations and overhead inflated operations costs and posed security risks in E&D's complex inter-organizational supply network.

Aligning Information Technology with Business Strategy

The extent of the organizational challenges and the ever-present pressure for cost containment and profitability clearly indicated that E&D needed to overhaul its supply-chain management infrastructure. However, the highly diversified landscape of technologies and workflow solutions, data silos, and security restrictions introduced significant challenges.


Office SharePoint Server 2007 delivers an extensible and scalable platform. This platform enables the E&D Division to ensure efficient collaboration across organizational boundaries, streamlined workflows, uncomplicated data exchange, centralized BI and reporting, and effective knowledge management, while preserving and promoting reuse of existing investments in IT. The open and modular SharePoint architecture enables the creation of loosely coupled composite business solutions, plugged into the E&D supply-chain system without affecting existing LOB applications, business processes, or partner systems.

"Simplification and standardization are highly regarded best practices in supply-chain management. Office SharePoint Server 2007 enabled us to work smarter, become more adaptable to economic fluctuations, and ultimately increase our competitiveness."

Brian Tobey
Corporate Vice President
E&D Division
Microsoft Corporation

Figure 1 illustrates the enterprise architecture that E&D devised. This architecture relies on a hub-and-spoke arrangement of adjacencies connected to Office SharePoint Server 2007 by using interoperability standards, Web services, out-of-the-box components, and managed programming interfaces. This hub-and-spoke architecture is crucial for E&D to simplify its supply-chain management infrastructure through consolidation, standardization, and componentization.

Microsoft E&D hub-and-spoke architecture for supply-chain management infrastructure optimization

Figure 1. Microsoft E&D hub-and-spoke architecture for supply-chain management infrastructure optimization

E&D SharePoint Infrastructure and Operations

Accounting for the fact that most E&D supply-chain partners reside in North America, Europe, and Asia, E&D deployed SharePoint farms in the main Microsoft data centers of Redmond, Dublin, and Singapore. The Redmond data center hosts the majority of E&D's global applications and solutions specific to North and South America. The regional data centers use similar farm designs. Dublin supports Europe, Africa, and the Middle East. Singapore supports Asia and the South Pacific. Figure 2 shows E&D's global SharePoint infrastructure in relationship to the locations of the most important supply-chain partners.

The E&D SharePoint infrastructure

Figure 2. The E&D SharePoint infrastructure

Microsoft Information Technology (Microsoft IT) maintains the network infrastructure and server hardware in the data centers, but E&D owns the servers and services. Within E&D, a separate Information Systems group is responsible for all production servers, applications, and tools. The Information Systems group is also responsible for pre-production environments, system integration and testing (SIT) environments, developer-integration servers, and performance servers, which E&D deploys on an as-needed basis. The E&D Information Systems group is a Center of Excellence (CoE) for manufacturing and supply-chain management. The organizational separation from Microsoft IT makes it easier to implement E&D-specific service level agreements (SLAs). Table 1 summarizes the tasks of the individual E&D Information Systems teams and their service levels.

Table 1. E&D Information Systems Teams and Responsibilities


Service level


Support Operations


Responsible for service desk, incident management, and systems monitoring.

Production Engineering


Service offerings include tier-3 and developer support, root cause analysis and incident management, change control, and SIT assistance for solution release.

Infrastructure Engineering


Provides procurement assistance, asset management services, capacity and storage planning, configuration management, security and compliance monitoring, and system maintenance.

Technology and Integration Platform Services


Responsible for performance tuning and optimization, in addition to platform management and governance.

* 7x24 for outages and emergencies

Enterprise Data Integration Architecture

As part of the deployment exercise, E&D integrated the new supply-chain management environment with important back-end enterprise applications by using Business Data Catalog available in Office SharePoint Server 2007. As a Shared Services Provider (SSP) available to all site collections in a farm, Business Data Catalog is a core integration feature that abstracts the underlying data sources of enterprise applications registered in the Business Data Catalog metadata database. This abstraction helps E&D to minimize solution development costs by taking advantage of standard business data Web parts, lists, and search capabilities, in addition to simplified object models in custom components. E&D uses these techniques to surface important business data in SharePoint-based supply-chain management solutions.

Figure 3 illustrates how E&D integrates its SharePoint environment with important enterprise applications, such as the ERP system, the company's sales system (MS Sales), and the central customer relationship management (CRM) system. In most areas, E&D uses service-oriented architectures based on Web services for interoperability. The Web services provide direct connectivity or encapsulate further components within the communication channel, such as Windows® Communication Foundation (WCF) services for communication across security boundaries. Business Data Catalog also includes a direct Microsoft SQL Server® database connection based on ADO.NET to the company's most important data warehouse.

E&D architecture for enterprise application integration

Figure 3. E&D architecture for enterprise application integration

The E&D Division uses Business Data Catalog to integrate the following important enterprise applications with SharePoint-based supply-chain management solutions:

  • ERP system via Web services and WCF Integration of the ERP system provides access to financial information, such as purchase orders and costs of goods.
  • FeedStore via ADO.NET FeedStore pulls data from 39 internal sources, including the company's ERP system and other key databases from business units, to provide detailed information about products and product components.
  • CRM system via Web and business services Integration of the CRM system provides E&D managers with complementary user information directly in a SharePoint site. The CRM attributes help to assign roles in workflows and determine access permissions.
  • MS Sales via Web services MS Sales consolidates worldwide sales, inventory, distributor, reseller, and customer data to provide Microsoft employees with an accurate and consistent picture of the company's business.

Business Activity Monitoring and Reporting Architecture

The Business Data Catalog enables E&D to surface enterprise data in SharePoint solutions. However, it does not provide the ability to submit data to the underlying data sources, which is an important aspect for business activity monitoring and reporting purposes. To provide the necessary monitoring and reporting solutions, E&D uses mail-enabled document libraries in SharePoint sites. It also uses a combination of technologies, interfaces, and extract, transform, and load (ETL) processes to integrate SharePoint sites with back-end systems and data warehouses, depending on solution requirements. E&D uses Excel® Services in Office SharePoint Server 2007, Web services, WCF, Message Queuing (also known as MSMQ), and file-based interfaces, as illustrated in Figure 4.

SharePoint-based data gathering and reporting

Figure 4. SharePoint-based data gathering and reporting

Overall, the E&D metrics gathering and reporting solutions facilitate the following processes:

  1. Data submission Contract manufacturers, repair facilities, and other supply-chain partners post a pre-determined set of Excel workbooks and text-based report files on a regular basis or on demand to their SharePoint document libraries. The document libraries are mail-enabled so that partners can submit the files through uploads via Hypertext Transfer Protocol (HTTP) POST or Web Distributed Authoring and Versioning (WebDAV) or send the files in e-mail messages via Simple Mail Transfer Protocol (SMTP). The capability to submit reports through e-mail is especially important for partners that do not have access to E&D's SharePoint sites. Depending on the reporting requirements, a partner might submit files to multiple document libraries.
  2. Data processing Every submission triggers business logic in SharePoint event handlers to do the following:
    1. Parse the new report files
    2. Populate lists and document attributes
    3. Generate support alerts for missing data if necessary
    4. Log the processing activities in a central application logging system via Message Queuing
    5. Submit business activity messages to Microsoft BizTalk® Server via WCF Adapter, Message Queuing Adapter, or File Adapter
  3. Data analysis The submitted data is now available for reporting and analysis in a single location. Dashboards provide access to key performance indicators (KPIs) and trend data via SQL Server Analysis Services and Microsoft Office PerformancePoint® Server 2007 to make informed business decisions, such as for forecasting, budgeting, and procurement. Custom views display tracking information from SharePoint libraries and lists so that E&D employees can verify which partner submits which file and when, and Excel Services extends the reporting architecture to support the use of Excel workbooks as interactive reports.

It is important to note that not all reporting solutions require the full set of resources. For example, E&D compliance solutions gather metrics based on an Excel workbook template but do not integrate with back-end systems. Advanced solutions, on the other hand, extend the reporting architecture to support bidirectional information flow through Excel Services, SQL Server Reporting Services, and Portable Document Format (PDF) files. Among other things, E&D provides partners with access to reports from the central ERP system via file devices on Web folders that point to SharePoint document libraries. The SharePoint-based reporting architecture provides the necessary flexibility to handle these solution-specific requirements. It supports accurate, consistent, timely reporting by providing a single location for all data access, tracking, display, and analysis.

Enterprise Search Centers

In addition to individual reporting solutions, E&D deployed enterprise search centers in each SharePoint farm so that employees and partners can locate business documents and other content items quickly and conveniently through full-text searches. In addition to SharePoint-based sites, E&D supports a variety of content sources, including enterprise applications. For example, E&D crawls FeedStore as a source of business data to include parts information in the content index. Because the Query engine supports security trimming, users see only those search results that they have permissions to access. Figure 5 illustrates the enterprise search architecture.

Enterprise search architecture

Figure 5. Enterprise search architecture

Most relevant for searches across E&D's supply-chain management solutions is the fact that E&D heavily uses global custom site columns and content types to describe manufacturing and repair-related metadata and workflow tasks. Global site columns and content types help ensure consistent content management independently of any specific site collection, site, list, or document library. They also provide the means to extend search capabilities. While crawling SharePoint sites and business data sources, the Index engine automatically discovers the custom metadata. By mapping the crawled properties to managed properties and including the managed fields in the properties list on the Advanced Search page, E&D users can quickly and conveniently perform searches based on product characteristics, workflow document metadata, and other fields, such as part number and vendor name. As a SharePoint SSP, Enterprise Search is available across all site collections and sites in E&D's SharePoint farms.

Collaboration and Workflow Solutions

Another key opportunity for E&D to achieve substantial improvements concerned the migration of third-party workflow solutions to Office SharePoint Server 2007. This migration empowers business users to define and manage workflows without dependencies on IT or costly solution development. Particularly, the Global Artwork group needed a centralized workflow solution to automate collaboration processes; track progress and take appropriate actions on delays; manage files, costs, timelines, compliance, and status; and provide vendors with performance and utilization scorecards. The design needed to support familiar user interfaces and rule-driven workflows instead of state-transition workflows so that non-technical E&D business users can define, change, and roll back workflow sequences without the involvement of solution developers. The rule-driven approach also enabled E&D to repurpose existing Microsoft Office InfoPath® 2007 forms to capture the workflow definitions, templates, and instance information.

The rule-based E&D workflow architecture helps streamline the project creation, in addition to workflow definition, updates, and changes.

Identity and Access Management

Security and access protection requires E&D to provision extranet user accounts for supply-chain partners and to manage group memberships. For example, in the rule-based workflow architecture, workflow participants require access permissions to their project sites. The site-provisioning logic grants these permissions based on membership in unique SharePoint groups. E&D automates this task by using an internal tool. However, internal user account management for external users for authentication and authorization is costly. As the partner base continues to increase and the supply-chain management environment continues to expand, E&D must lower the costs associated with identity and access management. A cost-effective approach is to implement a claims-based authentication system by using the "Geneva" Framework and to delegate identity and access management to trusted partners.

Figure 6 shows the claims-based authentication and authorization architecture that E&D recently implemented to support external access based on a Windows Live™ ID. This architecture eliminates the need for extranet accounts while E&D employees can continue to use their corporate accounts to access SharePoint resources. To authorize authenticated users, E&D developed a custom Security Token Service (STS) based on the "Geneva" Framework. The STS generates claims (that is, security tokens) based on CRM attributes. A CRM authorization provider then processes these Windows Live ID tokens and CRM tokens and grants permissions similar to SharePoint roles. This claims-based authentication and authorization architecture is extensible. It can support additional claims from trusted partners in the future, such as from partners running "Geneva" Server as their Windows-based STS provider.

Claims-based authentication and authorization architecture

Figure 6. Claims-based authentication and authorization architecture

Best Practices

The following three strategic best practices formed the basis for E&D's success in streamlining its supply-chain management infrastructure:

  • Simplify rigorously By focusing on SQL Server, the Microsoft .NET Framework, BizTalk Server, and Office SharePoint Server, E&D can address all key business needs regarding systems integration, workflows, data management, and collaboration portals with the fewest number of moving parts.
  • Standardize heavily Standardization of system interfaces, components, and user interface elements helps ensure adaptability to changing business requirements. It enables E&D to build and deploy new solutions quickly and without affecting existing LOB applications, business processes, or partner systems. Existing processes and solutions can change without impact on other processes or solutions.
  • Componentize architectures and designs Business solutions that comprise reusable components help to lower development costs and accelerate the deployment of new solutions.


By taking full advantage of Office SharePoint Server 2007 technology in its supply-chain management infrastructure and applying process thinking to new and innovative business solutions, E&D realizes the following benefits:

  • Better supply-chain solutions at lower costs in shorter delivery cycles Office SharePoint Server 2007 enables E&D to build better business solutions at lower costs, maximize reuse of existing components and business logic, and accelerate solution delivery to business units and supply-chain partners. Development overhead decreased by 40 to 60 percent on average—an estimated cost saving of $3-5 million per fiscal year based on average project costs. E&D was able to save 2,500 developer hours in comparison to past projects with similar features that did not take advantage of SharePoint technology. E&D's supply-chain management infrastructure currently includes more than 30 custom solutions.
  • Operational efficiency and productivity improvement The E&D hub-and-spoke architecture based on Office SharePoint Server 2007 enables seamless collaboration, streamlined workflows, uncomplicated data exchange, centralized BI and reporting, and effective knowledge management across organizational boundaries.
  • Greater flexibility to accommodate changing requirements and workflows Fewer dependencies on IT positively affect business agility. E&D managers can quickly respond to changing business needs and workflow requirements. The SharePoint-based infrastructure also supports rapid process, partner, and application onboarding.
  • Better security and access management Support of emerging technologies, such as the "Geneva" Framework, enables E&D to extend its identity and access management infrastructure across organizational boundaries to support Windows Live ID and integrate trusted partner systems.
  • Lower support and maintenance overhead due to standardization of solution components Office SharePoint Server 2007 provides an extensible, scalable infrastructure built on information-sharing standards. Furthermore, by reusing pre-built, tried, and tested components in collaboration and management solutions, developers can achieve high code quality and help ensure a consistent end-user experience.
  • Better decision making with timely and accurate information The E&D reporting solutions facilitate monitoring of business-critical processes and management by exception. With a single location for data access, tracking, custom views, and analysis, E&D business decision makers have the most accurate, consistent, timely reports to empower business decisions.
  • Create knowledge centers to promote innovation, productivity, and reuse in the development culture Apart from solutions to streamline business processes and security management, E&D empowers employees and supply-chain partners through wikis to foster creative exchanges of opinions and ideas and online training courses.


Office SharePoint Server 2007 provides a comprehensive portfolio of enabling technologies and an open system architecture that organizations can use to achieve improvements in their supply-chain management environments. By using Office SharePoint Server 2007, the E&D Division broke through previous limitations caused by rapid growth, multiple-entity business workflow processes, and minimally integrated proprietary and custom applications. The previous infrastructure relied on many manual tasks. Office SharePoint Server 2007 eliminated these manual tasks by simplifying, standardizing, and componentizing the landscape of Microsoft server technologies, third-party products, and custom LOB applications. The new business solutions based on SharePoint technologies enable the E&D Division to meet business requirements with agility, save costs, improve customer satisfaction, and be ready for future supply-chain and workflow challenges.

For More Information

For more information about how E&D uses Office SharePoint Server 2007, refer to the IT Showcase technical case study "Streamlined, Customized Workflow Demonstrates Power and Flexibility of Development Platform" at http://technet.microsoft.com/en-us/library/bb981165.aspx.

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© 2009 Microsoft Corporation. All rights reserved.

This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, Active Directory, BizTalk, Excel, InfoPath, PerformancePoint, SharePoint, SQL Server, Windows, Windows Live, Xbox, Xbox 360, and Zune 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.

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