Sony Computer Entertainment Europe (SCEE) launched the "PlayStation" in 1995 across Europe, Scandinavia, Australasia and the Middle East. The console was a huge commercial success, contributing 53% of Sony's consolidated worldwide profit.
Prior to the "PlayStation", Sony had no experience of the interactive games market and therefore no infrastructure. So SCEE was effectively a well funded start-up that needed to build functions/activities from the 'ground up', which meant:-
- Determining brand strategy, market positioning and product pricing.
- Choosing between directly managed operations or distributive agreements for each country.
- Ensuring legal entities met local legislative requirements, particularly regarding ownership, profitability and liquidity.
- Operating at the lowest achievable cost base.
- Building scaleable processes, systems and controls to manage an aggressively expanding business.
|
These requirements resulted in a complex business model with the following features:-
- Financial transactions recorded in local currency, but consolidated financial and management reporting was in $US.
- Consoles/peripherals sourced from Japan and trans-shipped by air or sea.
- Software sourced from the Austrian subsidiary of Sony's music business.
- Centralised warehousing and logistics by the Dutch subsidiary of Sony's consumer electronics business.
- European product repair services provided by the Belgian subsidiary of Sony's consumer electronics business.
- Office space/other services to be provided by existing Sony companies in the smaller countries.
- Financing activities - in particular intercompany factoring - to become the responsibilty of Sony's corporate finance arm.
|
Each feature had to be described, confirmed and enacted so that the detail upon which the divisions information systems were to be based was both provable and accurate. As part of a small team of functional experts and external consultants, we provided the process and transactional designs for such events as:-
- Tracking consoles/peripherals stock movements, e.g. defining when SCEE actually owned stock, calculating and accruing freight, insurance and duty costs, stock transfers, physical stock count timetabling, etc.
- Tracking first and third party software stock movements, e.g volumes produced and shipped, intercompany invoicing at transfer price, third party invoicing as contract, print and packaging costs recharged, setting-up and tooling costs accrued, etc.
- Tracking customer "PlayStation" returns, e.g. level of graded stock held, number of consoles awaiting repair, level of un-economic repairs, service cost accruals, etc.
|
I was also required to undertake other business critical activities including:-
- Building a P&L, Balance Sheet and Cash Flow budgeting and forecasting suite that:-
- Dealt with 13 legal entities, six major distributors and 14 currencies.
- Could be completed by the local Financial Controller, ensuring country ownership and also providing a check on the legal entity's financial viability.
- Dynamically updated files with changes to software release plans and product pricing.
- Provided sales volume information upon which production planning and currency hedging activities were based.
- Eliminated profit-in-stock arising from the transfer pricing system.
- Transfer price modelling to maximise profits in those countries with the most beneficial tax regimes.
- Helping develop software price structures for first party software and 'proofing' third party software and distributor contracts.
|
Though fewer than 50 SCEE people were actively involved in the 'plan and act' activities of the "PlayStation", everything was in place on 'Day One'. Contracts were signed, systems and processes functioned, products were tracked, revenues and costs recorded and of course, the "PlayStation" sold by the bucketload!
Key Statistics:-
- Time frame: 9 months
- Staff involved: <50
|
