Microsoft Teams With Accenture to Think Out of the Box With the Launch of Its New Xbox Founded in 1975, Redmond, Wash.-based Microsoft Corp. (Nasdaq "MSFT") is the worldwide leader in software, services and Internet technologies for personal and business computing. One of its latest product innovations, the Microsoft® Xbox™ video game system marked a major milestone in the online gaming revolution. Business Challenge Putting the infrastructure in place to successfully launch the Xbox offering and keep store shelves stocked with the units and game accessories presented Microsoft with a colossal task on numerous technology and process fronts. With the Xbox, Microsoft was entering into the gaming console market, which was very different from the company’s traditional software business experience. For starters, the rollout of the Xbox posed altogether new and complex supply chain coordination challenges spanning more than 20 functional areas within Microsoft alone—everything from product design, tracking, information release, component sourcing, quality assurance, demand forecasting and planning, pricing, manufacturing, distribution, and credit and collections. Beyond the internal supply chain areas impacted, Microsoft had to address significant operational account management challenges in establishing relationships and communicating with an extensive network of game software development partners, suppliers and distributors as well as directly with select retailers. Further, Microsoft wanted not only a first-rate outbound customer experience but also an exceptional inbound experience. This entailed the need to develop a call-center solution, and new processes and systems for providing customer service and repair support for distributors, retailers and end-consumers receiving the product. Adding to the challenge, Microsoft was pushing the technology envelope with the Xbox, while trying to roll out the product in a dramatically compressed timeframe. How Accenture Helped Microsoft teamed with Accenture to develop the multi-faceted solution due to its long-standing relationship and extensive experience in implementing complex, global supply chain solutions for leading electronics and high-tech companies. Accenture supported Microsoft with the operational preparation and introduction of the Xbox across North America from the business case analysis and requirementsgathering to process design, functional specification development, system development and testing, production, and product roll-out. During regional Xbox product launches, Accenture continued to support Microsoft with systems development, testing and reverse logistics roll-out. Key areas addressed as part of the solution delivered, include: • Overall program management: Provided program management support for defining and building a unified, efficient supply chain to support the successful rollout of the Xbox across North America. Identified operational interdependencies and redundancies to efficiently integrate processes and systems between the various functional areas within Microsoft’s organization and externally with its network of hardware manufacturers, software developers, distributors, retailers, call center and customer repair facilities. Included supporting both electronic data interchange-based interactions and building new tools for supporting cost-effective interactions through the Web. • Third-party authorized replication and royalty tracking: Created a program for managing third-party relations with developers and suppliers, including tracking software development progress and production of units. Involved the creation of developer kits intended to help confirm the consistent application of design and quality standards as well as procedures for certification, collection of royalties and anti-piracy. • Reverse logistics: Developed repair and refurbishment processes, including a warranty system, to help customers avoid high replacement costs for the high-end console which features a hard drive and advanced graphics chip technology. This reverse logistics system tracks the Xbox supply chain, provides an interface between the Xbox service contract vendors and the Xbox consumer call center, and calculates warranties for Xbox consoles. Microsoft leveraged outsourcing relationships with reverse logistics vendors to cost-effectively address customer service needs. • End-to-end supply chain testing: Developed and applied a comprehensive methodology for process and system testing throughout the supply chain. Included executing testing on a quarterly basis as new process and system capabilities were put in place. Performing a complete, end-to-end test of the supply chain was crucial not only for ensuring a successful Xbox launch across North America but because it would also serve as the model for supporting the rollout on a worldwide basis. High Performance Delivered Leveraging the in-depth experience of Accenture’s Electronics and High-Tech Industry consultants, Microsoft was able to quickly ramp up its operations in supporting its aggressive goals for a smooth launch. The value of Accenture’s contribution virtually transcended key aspects of Microsoft’s operations, including: • Expanded market share and creation of a new revenue stream • Unified, efficient supply chain processes and systems • Enhanced supply chain visibility for cost control • Effective process and product tracking for preserving data integrity • Reusable, end-to-end supply chain testing methodology for successfully implementing future changes and launching new products • Responsive, quality-focused customer support services and processes Reflecting on the Xbox launch, Mark Roenigk, General Manager of North American Operations, Microsoft, "As with many of our other major program initiatives, Accenture provided us with the thought leadership and objectivity required to successfully pull off the Xbox launch." Concludes Roenigk, "Accenture has been a true partner in every sense of the word, integrating themselves into our business. They help us sift through the myriad of ideas that bubble up in any given day at Microsoft without hesitating to push back on us to make sure that we have really thought through all aspects of an opportunity." For more information, visit www.accenture.com and www.xbox.com. "Accenture has been a true partner in every sense of the word, integrating themselves into our business. They help us sift through the myriad of ideas that bubble up in any given day at Microsoft without hesitating to push back on us to make sure that we have really thought through all aspects of an opportunity." — Mark Roenigk, General Manager of North American Operations Copyright © 2004 Accenture All rights reserved. Accenture, its logo, and Accenture HIgh Performance Delivered are trademarks of Accenture. Microsoft and Xbox are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.