With its polished jet-black barrel of precious resin inlaid with the white Montblanc star and a gold-plated clip, the “Meisterstück 149” fountain pen has glided across the signature page of many an international treaty. Two of the three rings on the cap of this legendary piston fountain pen, which was first unveiled to the public in 1924, are made of silver. The handcrafted nib is fashioned in 14 or 18-carat gold. A great deal of work goes into making it, and particular attention is paid to cutting and polishing the gold nib. The figure “4810” – the height of Montblanc in meters – is engraved onto it as a quality seal. The highest point in the Alps is the trademark of the writing implement manufacturer Montblanc, and stands for quality, tradition and handcrafted perfection.
Montblanc sets equally high standards for its IT systems as it does for the elegance of its product range. In 1999, the company began implementing the SAP for Retail industry solution. Montblanc started life in a small workshop in Berlin in 1906. It is now based in Hamburg and has four European production sites and 16 sales companies. It boasts an international retail network comprising around 230 boutiques, all of them in prime city center locations.
Mastering US sales tax
Montblanc wanted to gradually bring these boutiques and stores into a single integrated system, replacing the numerous stand-alone solutions which were in use before. Montblanc put the finishing touches to its new IT system in October 2004 when it introduced SAP for Retail in the United States and at the same time integrated its 40 US boutiques into a new cash desk system. Prior to this, Montblanc had handled all its processes using a variety of stand-alone systems which were not compatible with the SAP solution. The cash desk system used at the company’s European head office did not meet the requirements of the American retail system with its complex sales tax arrangements.
Michael Harbs, Director Competence Centre Retail and Business Process at Montblanc, therefore decided to take a critical look at the cash desk systems available in the USA. He was only prepared to consider systems which could be integrated into SAP for Retail without any problems. The system also needed to be able to simplify the processing of US sales tax, support credit card payments and allow the integration of a client database. There were only two providers of cash desk software which met these criteria. “The most important factor for us was to ensure that the provider had a proper understanding and expertise in SAP and the control software. Most of the providers failed on this point in our market analysis,” explains Harbs. In the end, it was the cash desk specialist Torex Retail (formerly Logware) of Berlin which came out top. As Harbs explains, “The Lucas software from Torex Retail impressed us with the way it could handle US sales tax and work in tandem with SAP for Retail.”
The US project began in February 2004. Montblanc decided to manage the process integration using the SAP Exchange Infrastructure (now known as SAP NetWeaver XI). Data transfer is handled using the cash desk software, which conveys XML data to the platform. This performs the mapping work and translates the data into SAP format. The data can then be exchanged between SAP for Retail and the individual stores in a matter of seconds. Montblanc also uses the central integration architecture to link up its sales division’s UPS database, its SQL database with shipping data, and its warehouse in Dallas, Texas. Montblanc’s boutiques in the USA are also connected to the company’s central server in Switzerland via a virtual private network.
First stop: Madison Avenue, NY
For credit card payments, Montblanc chose the Paymetric solution. This is always online and connected to Lucas, allowing users to obtain direct authorization from the cash desk system. This then transmits the data to the relevant bank, thereby ensuring a speedy payment process.
Montblanc had always found the American tax system something of a minefield. The devil is in the detail here, since the amount of tax due is determined by the product group, the sales location and the address of the purchaser. To make matters worse, there are also special tax arrangements such as “max tax” and “tax holidays”, which only apply for limited periods. Montblanc needed to have a comprehensive and reliable solution, since it is required by law to demonstrate that taxes have been levied at the correct rate.
After some consideration, the company chose the product from Taxware. This runs via the Lucas cash desk system and is closely linked to SAP for Retail. Montblanc is now able to calculate the exact tax due on every purchase in its boutiques. Once a month, Taxware sends Montblanc an update showing the current rates of tax. This is distributed online to all stores and uploaded onto the cash desks.
All the functionalities had been integrated into Lucas by the summer of 2004 and, following a pilot installation, the roll-out began. The first store to be brought into the system was the New York boutique on Madison Avenue. Within the space of two months, all the stores and their cash desk systems had been linked to SAP for Retail. “Thanks to the smooth roll-out and the flawless interaction with Torex Retail, we were able to relax and look forward to the Christmas period,” says Harbs, who was very pleased with the way the project ran.
Montblanc in the land where everyone wears a smile
Achieving true customer loyalty is the key to success with luxury brand names. Montblanc therefore uses a customer management system which stores data about clients, their sales history and information about their favorite limited editions in a central client database in the USA. Address data is stored on all cash desks in the USA so that it can be called up quickly. If a Montblanc sales assistant wants to view a client’s sales history, he accesses the central server via the cash desk and receives the information he requires in a matter of seconds. Thanks to these real-time data the system ensures that a client who usually buys his piston fountain pens from the boutique on Beverly Boulevard in Los Angeles but occasionally likes to pop into the store on Grant Avenue in San Francisco is recognized and welcomed as one and the same customer. Personal service is therefore guaranteed at all times.
Overall, SAP XI integration is saving Montblanc time and money as well as allowing it to ensure process-based cooperation between its stores. Constant access to current data in SAP for Retail cuts response times and improves customer management. For repeat orders, SAP for Retail now provides the boutiques with touch-of-a-button information about which store a particular article can be ordered from. And that’s not all – thanks to its new IT system, Montblanc is winning a good position for itself when it comes to kitting out its boutiques on other markets around the world. Montblanc plans to expand over the next few years, particularly in China. Montblanc products bearing the white star are considered a status symbol in Asia, signifying success and an exclusive lifestyle. The company’s goal is to double the number of sales outlets which it has in the land where everyone wears a smile by 2007.