Mastering the Trade Game

In order to manage growing from a $60 million company to a $1.4 billion company in ten years, Activision needed to streamline its trade management and accounting processes. Activision is the third largest video game manufacturer in the United States, with titles like Doom and Call of Duty, and licensed games based on movies like Spiderman, Shrek and Star Wars. In the past ten years, Activision has moved from a manual paper trail to an all-electronic trade process, negotiating Sarbanes-Oxley and other challenges along the way.

Blazing New Uses

According to director of sales planning and analysis Jameson Wang, Activision implemented Gelco's Trade Management Solution (TMS) for demand/sales volume forecasting and trade funds management. Benefits include a standardized and centralized repository for information from remote locations, which is vital for an international company like Activision. The system is standardized, preventing reporting anomalies, and manpower and process efficiencies have increased accuracy, flow and ease.

"It's now faster, with less time needed for auditing, and minimized validation. Drop-down menus make the collection process easier," explains Wang. Gelco has been its vendor since 2000, providing the TMS Enterprise Solution with an Analysis & Reporting module. In January 2006, Activision is migrating to its latest toolset, which will change the interface from a spreadsheet-based format to a database-centered format. Promised gains include back-end database efficiencies like faster information access.

"The speed is faster, but it takes more clicks to get there," Wang says. "But the TMS benefits outweigh the costs. It's better for individual trade event planning, and we also use it for demand forecasting for revenue."

With five years of hindsight, Wang has learned a great deal about the implementation process. "We use nothing from Gelco straight out of the can. We're unique that way. But with these customizations and changes come a lot of growing pains. We're blazing new uses for new applications, like the demand forecasting component, and sales sometimes over commits what production can provide," he explains. "With our bells and whistles, etc., we were on the cutting edge, but they were committed to helping us achieve our goals: functional, but not ideal, with opportunities for improvement."

According to Wang, Activision chose Gelco's product because it included the demand/sales volume forecasting component with the TMS. "We could blend them and do the ROI much more efficiently," he says. "But there were too many technical issues, so we've consolidated sales forecasting from manual spreadsheets. It's now an Internet-based central repository for pulling reports, which has had a huge impact on our manpower efficiencies. On the trade side, Gelco cleared the manual paper trail -- a physical paper trail on someone's desk -- and made it all electronic, faster, cleaner."

Sarbanes-Oxley compliance comes with its SAS 70 (Statement of Auditing Standards) systems and compliance qualification rating, which Gelco audits every six months to aid its customers' with their Sarbanes-Oxley compliance efforts.

Nothing in Excess

For Wang, responsive customer service and a strong relationship are critical vendor selection criteria for all IT investments, in addition to Sarbanes-Oxley compliance.

"Gelco's customer support has been excellent in terms of our needs and validation, and in bringing our product needs to fruition. But the customers must do their homework to make sure the vendor has the right product for their needs," he explains.

In terms of return on investment for TMS, he says, "You can't manage and grow your business with a manual process in place today. The ROI could be substantial if you're still in a manual process, or if your customer doesn't have a systematized process in place."

According to Wang, Activision's top-level exec-utives are supportive of IT investing, but they require a clear understanding of t he prioritization of all proposed projects: "Global implementation of Oracle with our international subsidiaries and branches is taking priority right now in our IT investments. Nothing in excess: it recognizes necessities and addresses them as prioritized."

When asked what keeps him awake at night, Wang says "not a whole lot. We've ironed out most of the kinks. We've had a few exceptions, or something breaks for some odd reason. Their team works hard to rectify things, so there's not much downtime. Their customer service is very responsive."

In the future, Wang sees "absolutely more wireless access to information. Everything is already becoming much more mobile. I see an increased level of mobility, like being on an airplane and working at one's own convenience and pace with fewer and fewer restrictions," he says. "This has been one of our wish list items: working offline for data entry, and then being able to link up and upload. But that would compromise some security levels for SAS 70 accreditation now, according to Gelco."

TMS presently works with wireless laptops, but not with handheld devices. Developing an offline version of software designed as an online solution is outside the scope of Gelco's business model. As Internet access becomes more and more ubiquitous and connectivity costs continue to come down, those are not steps that it needs to take.