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Overview

Epitaph Records had outgrown their previous system and were looking for a more modern system. The record company chose SAP Business One with Sapphire to improve their business processes and day-to-day efficiencies. Since adopting the platform, Epitaph Record have been impressed with Sapphire's support services and the benefits that they have noticed since implementation.

Intuitive system with transparency across business processes

Improve day-to-day employee efficiency

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Objective

To be able to generate insight from hundreds of thousands of lines of data from popular music streaming platforms, and calculate royalties. 

Solution

SAP Business One, version for SAP HANA

Organization

Based in Los Angeles and with offices in Europe and Canada, Epitaph Records is an independent music label founded in the 1980s by Bad Religion guitarist, Brett Gurewitz, inspired by the King Crimson lyric “Confusion will be my epitaph”. From its origins as a punk label, today Epitaph boasts a diverse roster of artists and 7 gold and platinum records.  

Why SAP Business One?

The challenge for the whole music industry over the last decade has been trying to find a workable revenue model. As Barry Reynolds, Epitaph’s Finance Director explains, “With the advent of streaming, revenues dropped industry-wide as CD sales declined. In the last three years since streaming has hit mass-market adoption, the industry has seen revenue growth for the first time since the early 2000s.”

“Our challenge in this new economy is that instead of physical sales of CDs and LPs driving performance, we now have micro-transactions of half a cent per stream. So whereas the monthly sales reports from a physical distributor would consist of 3,000 to 4,000 lines, a Spotify report typically has 800,000 lines. We needed a solution that could handle that kind of volume and turn the data into a usable reporting format.”
“We had an aging system that handled some of our information requirements, but not the streaming data, so that was all done manually,” recalls Barry. “Every three months, I would compile a spreadsheet which another member of the team would use to calculate royalties, but it was a tedious, manual process. We recognized the imperative to modernize our software. SAP Business One came highly recommended by a consultant that works with us, and looked like the perfect fit with our business needs at the right price point.”

The Benefits

“We receive monthly sales reports from various partners such as Spotify, Amazon, Apple and Google, which are all imported into the SAP HANA database for crunching – a process that used to take half a day and now takes half an hour, freeing up my time for more purposeful activities. I can then put that data to work for all different kinds of reporting scenarios, such as looking at P&L by artist, or determining the biggest artists on each streaming platform. What’s shocking is how super-fast it is – SAP HANA handles sales files containing 30 million lines of data with ease. I can grab all the information I need, quickly sort it by artist or project, and export to Excel or a PDF in a couple of clicks for use with our royalty accounting software,” enthuses Barry.

“We also make wider use of SAP Business One in our day-to-day activities, such as receivables, payables and inventory. Purchase orders are a breeze in SAP Business One, whereas with our antiquated legacy system, we had to do a lot of workarounds. Once a month, we update our forecast for the year based on the sales information pulled from HANA, which gives us greater accuracy,” he adds.

“We did have one custom requirement that SAP Business One couldn’t deliver out of the box, as our CD and vinyl LP manufacturing process introduces a degree of complexity. We needed to be able to monitor our inventory of components in the warehouse as well as stock of finished goods. It took a little programming to achieve, but Sapphire gave us the functionality to calculate accurate costs and put finished goods into scalable items with a Universal Product Code.”

Working with Sapphire

“We were the first record label to implement SAP Business One on HANA, and ours is such a unique business model,” Barry explains. “When we initially started working with Sapphire, we had lots of intensive meetings involving various people, so they could learn about our business and align SAP Business One to our specific requirements. We developed a wish-list which we refined into immediate priorities and ambitions for a later date.” 

“We embarked on a phase of data preparation and test dumps from our legacy system, to ensure a smooth migration when the time came. Ongoing, we have a check-in with Sapphire every three months, which allows them to deal with any issues or questions that arise, and create any reports we might need as our requirements evolve.”

“From our experience, the key to a successful SAP Business One project is to pick a good partner who will listen, understand what your company is all about and any specific considerations, and prepare you for implementation. With SAP Business One and Sapphire behind us, it’s all worked out really well,” concludes Barry. 
 

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