By: Linda Rosencrance
On the last day of June Microsoft Gold Partner AlfaPeople announced a $19 million deal to implement Microsoft Dynamics AX 2012 R3 to support the New Hampshire Liquor Commission’s (NHLC) retail and omni-channel business for the next 10 years.
AlfaPeople and Dynamics AX beat out a number of other large ERP providers, including SAP and Oracle, as well as smaller niche players to win the contract, which entails software, hardware and services for all the commission’s retail stores and main central office, says Erik Hoiden, managing partner of AlfaPeople.
Currently there are 17 alcoholic beverage control states in the U.S., including New Hampshire, that have state monopolies over the wholesaling or retailing of some or all categories of alcoholic beverages. AlfaPeople has created a specific solution for the liquor control states that is helping multiple states across the nation, Hoiden says.
About three and a half years ago, AlfaPeople was invited to join with some other partners to bid on a deal that involved an overhaul of the IT backbone for the Ohio’s Division of Liquor Control’s inventory management, including replacing the point-of-sale equipment at liquor store checkout counters.
“We were not the prime on that, we just took care of the retail,” Hoiden says. “AlfaPeople is very focused on retail in the US. After Ohio, we were lucky enough to get the state of Utah and then we bid on New Hampshire.”
Several years ago the NHLC, which operates 79 retail locations throughout the Granite State and serves more than 11 million liquor and wine outlet customers each year, realized it was time to replace its 30-year-old legacy system.
“That system consists of an accounting system and tons of homegrown systems,” says Hoiden. “And in the stores they have hardware and a POS system that is 18 years old that is basically falling apart.”
Despite the fact that its software and hardware are outdated, the NHLC has a modern approach to selling – it runs the business as if it were a commercial retailer, which accounts for its $650 in annual revenue, he says.
“So they have discounts, they have sales, they have buy one, get one free promotions,” Hoiden says. “But there are a lot of things that can’t do with the legacy system in terms of how to manage these discounts. One of the things they are getting is electronic price labels that will be integrating into [Dynamics] AX. So when the prices need to be changed, we will do it from AX. We will run that as a pilot program in five stores first.”
AX on Azure: A platform for growth
The new Azure-based Dynamics AX solution will provide New Hampshire with state-of-the-art technology that will support the B2B as well as B2C business needs of the NHLC today and into the future, he says.
Additionally, AlfaPeople will implement Power BI to give the state liquor commission accurate real-time information to enable better planning in terms of staffing its retail stores as well as to determine how products are selling.
AlfaPeople’s senior team has also been helping NHLC work through the business processes that it will need for the next decade.
“We challenge them a little bit,” Hoiden says. “Just because they have been doing something for 30 years in the old system, doesn’t mean they have to do it in Dynamics AX. They have to think about what Microsoft has put in and what AlfaPeople has put in as best practices and take that as the starting point and then see how we can solve their business processes.”
The bottom line for the NHLC is to have a solution that it can grow with and live with for a number of years and not be “stuck” with, according to Hoiden.
“The commission wants the omni-channel,” he says. “They want one version of the truth – to have the same information going to their customers in all their channels. They want to grow the online presence and they also want to get into more marketing – more CRM-focused activities. So they have an option to implement Microsoft Dynamics CRM as well.”
The NHLC also has ambitions to become a much more commercially-oriented retailer, Hoiden says, and Dynamics is positioned to play a key role in future plans.
“We’re planning on an implementation phase of a year and a half to go live with AX in headquarters in the back office and the pilot stores and then roll out the rest of the stores six months after that,” he says. “So full implementation two years, first live date eighteen months. We’re starting the project now and they will be on Azure as a hosted solution. But the commission also has an option to upgrade from AX 2012 R3 to the new Dynamics AX.”
Government a niche for this partner
Hoiden says this is a great opportunity for AlfaPeople to get commercial off the shelf software into government agencies.
“We have integrations into state financial systems but we’re trying to move these [states] that have very old systems into the direction where they can get upgrades of the software [regularly],” he says. “That is a big opportunity and a big challenge for us to get into a new area. It’s very interesting because of the size and the length of the contracts.”