Bojangles Saloon

www.boslivesaloon.com.au

Executive Summary

Bojangles was first established in 1935 as a guesthouse.   In 1998, new owners Avril and Chris Vaughan, fashioned the site into a hotel restaurant providing food, beverages and entertainment for tourists and locals.   Bojangles Saloon and Restaurant is located at Alice Springs, Northern Territory, and employs 42 full time employees.

Avril understood that by improving interactions with customers and suppliers, the business could vastly reduce operating expenses and lift its profile as a tourist attraction. She began the initiative in January 1999 with the intention to "give it a go and see what happens".

The aim of electronic supply chain management is to improve logistics between the business, the suppliers and the customers. An efficient supply chain that facilitates the smooth flow of information and goods became a significant competitive differentiator for Bojangles. Prompt information flow between the Saloon and suppliers assists in keeping inventory levels low and reduces the time and cost associated with paperwork transactions. Convenient communication with regional and overseas guests has improved the company's relationship with current and potential customers.  The online store provides a direct marketing channel allowing easy browsing, payment and delivery confirmation.

Most of the benefits derived from implementing e-commerce are in the form of cost savings, totalling $57,236 in 2001.  The major portion of cost savings were the results of improvements in staff productivity.  Bojangles invested $15,065 into the e-commerce venture in 2001.

In the future, the company plans to adopt a point of sale system that will enable the company to place orders with major liquor suppliers online.

The Business

Bojangles was first established in 1935 as a simple guesthouse. The site experienced a series of ownership changes over the years, the latest of which occurred in 1998. The new owners, Avril and Chris Vaughan, fashioned the site into a hotel restaurant providing food, beverages and entertainment for tourists and locals. The business is recognised as a tourist attraction with a customer base consisting of tourists (50%) and locals (50%).

Bojangles Saloon and Restaurant is located at Alice Springs, Northern Territory, employing 42 full time employees and 24 subcontractors.

Getting Started

Avril initiated the e-commerce strategy in January 1999 with the aim of improving business profitability.  She understood that Internet technology could provide a means for automating manual processes and reducing administration costs in banking, payroll and communications.  A website would also market the business to regional and overseas visitors as well as providing an additional sales channel through online purchases.  Due to her inexperience with e-commerce, Avril implemented e-commerce gradually with the intention to "give it a go and see what happens".

In the research and implementation phases, Avril relied on guidance from accounting packages and information from the bank with regards to online banking. Bojangles later commissioned a web developer to construct the company website and online shop.  This website is updated every six months by the web developer.

Several methods have been used to market the website including media advertisements, stationery and search engines.

Supply Chain Integration

Supply Chain Integration focuses on the strategic sharing of information in order to promote synchronised planning and workflow coordination amongst business partners.  Bojangles believed that the goals of cost reduction and improved customer satisfaction could be addressed through participation in an online supply chain.  Communication with suppliers through email eliminated large volumes of paperwork, effectively improving staff efficiency.  Instantaneous transmission of information reduced the incidences of errors in payments, orders and deliveries. 

Internet technology provides a means for streamlining the supply chain.  By providing greater visibility across the supply chain, suppliers and customers are better equipped to forecast the demand for beer or the availability of tables on a particular night.   From Bojangles perspective, greater visibility facilitates better control of inventory levels and stronger collaboration with supply chain partners.

For customers, the company website provides links to the online store, tours and accommodation.  A live web cam also allows tourists to video link themselves while in the Bojangles saloon and project the image to friends and family around the world.

Current e-commerce strategy

Communication with suppliers and customers are predominantly carried out via email.  Customers can send online enquiries, while stock orders can be transmitted by Bojangles to suppliers such as Carlton United Brewery (CUB).  The instantaneous transfer of information facilitates a smooth purchasing processs, particularly where there are changes in stock requirements.  Suppliers are mostly paid online.

The website is used as a marketing tool where tourists can access information such as the food and drinks menu and guide to which bands are performing on a particular night.  A web cam is set up in the restaurant which delivers live coverage of the restaurant via the website. It allows Internet browsers to experience the atmosphere of the restaurant online and tourists can visually speak to friends and family outside of Alice Springs. The website also provided an online shop selling the restaurant's merchandise. Customers can order directly online, authorise payment and be notified of delivery dates all in one transaction.

Bojangles has forged industry alliances with the general objective of promoting tourism in Central Australia.  Potential visitors can be linked to sites such as the Northern Territory Tourist Commission and the Central Australian Tourism Association for information about travelling to Alice Springs. Bojangles is also linked to the website of Sahara Outback Tours that provides information on tours and accommodation in the area. Weather reports in Alice Springs from the Bureau of Meteorology are also provided.

The Internet is widely utilised in other areas of administrative functions. These include online banking and electronic payroll (including superannuation). The business also submits tax return and BAS returns to the Australian Taxation Office (ATO) online. Research for new products such as wine for the wine list is mostly conducted via the Internet.

Security over the e-commerce establishment was developed by both the web developer and Bojangles. The web developer maintains the website which uses Secure Socket Layer (SSL) technology to encrypt all information on customer orders, such as credit card details, so that it cannot be accessed while it travels over the Internet. Bojangles complements e-security by backing up business data on a daily basis and storing it offsite. Antivirus software is installed on the company computer that is secured in a locked office. Staff have access to the computer but they cannot connect to the Internet and access emails.

Revenue and Costs

* Note: Capital Expenditure is amortised over a four-year period

Financial Analysis

During 2001, Bojangles has generated additional revenue of $1,200 from online sales via its website and bookings made by visitors.  This contributed $600 towards gross profit.

The business achieved significantly greater cost savings during the year as a result of e-commerce efficiencies. Total expense savings amounted to $57,236. Substantial savings were derived from improved staff productivity, resulting in less time required to address customer enquiries and perform manual duties such as banking and payments to suppliers ($52,000).  Other cost savings include the reduction in print media advertising ($2,500), bank charges ($1,800) and reduced postage/freight costs required to send correspondence to customers and suppliers ($936).

Bojangles invested a total of $15,065 into the e-commerce system. A major portion was allocated to the external web developer in building the business website and installing the Internet web cam ($14,000). The time undertaken by Avril in researching e-commerce strategies represented a cost of $750. The registration of the domain name for the website involved a cost of $180. The business spent $135 in acquiring antivirus software for its computer.

The total ongoing cost of the e-commerce operation was $7,379.  Expenses associated with supporting the website including Internet Service Provider (ISP) fees ($1,620) and website maintenance ($1,320).  General software and antivirus upgrades incurred $229 and $64 respectively.  A further $3,766 was allocated to the amortisation of capital expenditure over a four-year period.

Non-Financial Benefits

The automation of administrative tasks has effectively improved customer service as staff are more efficient at processing orders, bookings and accounts. The company is also able to provide customers with more information, including tour and accommodation details, and create a portal where customers can make online bookings and purchases.

The company website has also lifted the profile of Bojangles as a tourist attraction.  Potential visitors that otherwise would not have known about Bojangles can be directed to the website via an Internet search. 

Challenges

Bojangles had occasional difficulties logging into the Internet using their dialup connection, however these difficulties were quite rare and only resulted in a minor disruption to business.

Future

Bojangles plans to adopt a Business to Business (B2B) point of sale (POS) system and place online orders with two of its major liquor suppliers, CUB and The Australian Liquor Market.

The POS system is a computer that has a program allowing direct interaction with suppliers. When orders are taken from customers in the saloon, the POS system enters the order directly into the system, recording the decrease in inventory level.  This allows Bojangles staff to be able to monitor stock levels in real-time, and know exactly how much of each product is available at any time. This then simplifies the stocktake and reordering processes.  Furthermore, Bojangles will benefit from several value added services including specialised support, online account enquiries and order tracking functionalities.